What are the 3 best AI ETFs investors should look for? Let’s dive into a detailed analysis.
With a global market estimated at $241.8 billion in 2023 alone (Statista), AI is accelerating like never before, driven by an influx of funds that defies all predictions. Over the past two years, corporate investments in artificial intelligence has experienced a $5 billion increase, pushing AI to a new level of relevance.
Who’s behind all of this? Companies specializing in machine learning and chatbots, redefining human interaction with machines. In this article, we will analyze the AI landscape and its growth prospects, showing the data of the most important research companies, and then reveal the three best AI ETFs, focusing on the main characteristics and highlighting the details of each individual product.
Is AI a good investment in 2023?
According to Next Move Strategy Consulting, the value of the artificial intelligence market seems to be moving towards a monumental transformation, with forecasts indicating a possible 20-fold expansion by 2030, bringing it close to a staggering $2 trillion. However, this growth is not an isolated event but reflects a profound diffusion of artificial intelligence across a wide range of business sectors. From intricate supply chains to the careful world of marketing, from product conception to comprehensive data analysis, AI is permeating every aspect of business operations, becoming a crucial backbone for progress.
Among the trends fueling this technological revolution, the use of chatbots, advanced capabilities of image generation, and optimization of mobile applications emerge as the most important ones. However, one trend that deserves particular consideration is that of generative artificial intelligence, which saw a significant relaunch in 2022 with the launch of ChatGPT 3.0. This event triggered a notable increase in interest, highlighted by a careful analysis of search engine traces, which highlights considerable growth between 2022 and 2023. The enthusiasm around this area appears unabated, as both ChatGPT and other players, Microsoft and Google first and foremost, are designing increasingly advanced versions and generative artificial intelligence projects are developing incessantly, promising an exciting future full of potential.
But what are the 3 best AI ETFs to evaluate in the investment decision-making process? Let’s see them together.
1) Xtrackers Artificial Intelligence & Big Data UCITS ETF 1C
ISIN: IE00BGV5VN51
The Xtrackers Artificial Intelligence & Big Data UCITS ETF 1C is a product focused on replicating the Nasdaq Yewno Global Artificial Intelligence and Big Data index. This index in turn reflects the panorama of international companies active in the field of artificial intelligence, big data, and cybersecurity.
The selection process of companies to be included in the index is governed by ESG (environmental, social, and corporate governance) criteria, aiming to incorporate companies that respect sustainable parameters. This perspective is relevant in a context in which sustainability concerns are increasingly gaining ground.
The ETF’s total expense ratio (TER) is set at 0.35% on an annual basis. One aspect that distinguishes it is its status as the only ETF capable of directly replicating the Nasdaq Yewno Global Artificial Intelligence and Big Data Index. This replication is achieved via a total physical replication method, which involves the purchase of all components of the underlying index.
A detail to underline is the management of dividends, which are accumulated and reinvested in the ETF itself, potentially amplifying the capital invested over time. The Xtrackers Artificial Intelligence & Big Data UCITS 1C ETF manages assets of approximately $1,184 million.
In a complex financial landscape, this ETF offers investors an option for exposure to artificial intelligence and big data through an investment implementation that is structured and directly aligned with its benchmark.
2) WisdomTree Artificial Intelligence UCITS ETF USD Acc
ISIN: IE00BDVPNG13
The WisdomTree Artificial Intelligence UCITS ETF USD Acc is designed to track the Nasdaq CTA Artificial Intelligence Index. This index, in turn, tracks companies identified by the Consumer Technology Association (CTA) as playing a significant role in the field of Artificial Intelligence (AI). The index is based on AI CTA intensity metrics, which measure company involvement in the AI industry. Companies that score highest on these metrics are included in the index. Stock selection is based on ESG criteria, emphasizing attention to environmental, social and governance issues.
The ETF’s total expense ratio (TER) is set at 0.40% on an annual basis. It is important to note that the WisdomTree Artificial Intelligence UCITS ETF USD Acc is the only investment vehicle that tracks the Nasdaq CTA Artificial Intelligence Index. The total physical replication methodology is adopted to faithfully track the performance of the underlying index.
In terms of dividend distribution, these are accumulated and reinvested within the ETF, potentially contributing to capital growth. The WisdomTree Artificial Intelligence UCITS USD Acc ETF, with approximately $551.6 million assets under management, represents a sizable investment option. Launched on 30 November 2018 and domiciled in Ireland, it offers investors access to a specific investment area through a well-defined investment structure adapted to its benchmark index.
**3) L&G Artificial Intelligence UCITS ETF
ISIN: IE00BK5BCD43
The L&G Artificial Intelligence UCITS ETF was created with the aim of tracking the performance of the ROBO Global Artificial Intelligence index. This index has been specially designed to reflect the performance of companies that heavily depend on the Artificial Intelligence industry for a significant portion of their business and revenues. A careful selection of shares is carried out through filtering based on ESG criteria, which takes into consideration various environmental, social, and governance aspects.
The ETF has a total expense ratio (TER) of 0.49% yearly. It should be noted that the L&G Artificial Intelligence UCITS ETF is the only financial instrument available to investors that is able to emulate the performance of the ROBO Global Artificial Intelligence index. This emulation is achieved through a strategy of physical replication
total, which implies the purchase of all the components that make up the benchmark index.
One significant aspect for investors concerns the management of dividends, which are accumulated and reinvested directly in the ETF. With assets amounting to $353 million, the L&G Artificial Intelligence UCITS ETF represents a significant investment choice. Launched on 2 July 2019 and tax-domiciled in Ireland, it offers investors the opportunity to access the dynamics of Artificial Intelligence through a transparent and well-defined investment implementation.
In conclusion
All 3 ETFs trade liquidity, giving investors the ability to buy or sell shares with relative ease. This liquidity helps ensure greater flexibility in executing trades and reduces the risk of significant slippage impacts.
Each ETF has unique characteristics that can influence investor choice. The Xtrackers ETF is distinguished by a slightly lower TER and higher assets under management. The WisdomTree ETF offers the uniqueness of directly tracking the Nasdaq CTA AI index, while the L&G ETF focuses on companies with high exposure to AI. The final decision depends on the investor’s priorities in terms of cost, index followed asset size, and investment strategy.
|DISCLAIMER
The information and considerations contained in this article should not be relied upon as the sole or principal aid in making investment decisions. The reader maintains full freedom in his own investment choices and full responsibility in making them since he alone knows his propensity for risk and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation of public savings.|
Original article published on Money.it Italy 2023-08-30 07:47:00. Original title: I 3 migliori ETF per investire sull’intelligenza artificiale
