Are AI ETFs As Smart As They Sound? | ETF Trends

Across industries, including healthcare, manufacturing, and even fashion, artificial intelligence (AI) is automating tasks, providing new clinical insights, and in the case of the fashion, generating virtual models. But with seemingly endless potential, is the sky the limit for investing?

A look at industry trends suggests adoption and spending are forecast to rise, offering a chance to invest in AI ETFs focused on intelligent machines and automation. According to research cited by Forbes, “47% of organizations participating in a recent survey say they have either scaled up and industrialized machine learning or are moving projects into production.”

Spending is predicted to rise as organizations scale up. “IDC predicts spending on cognitive and AI systems will reach $77.6B in 2022, more than three times the $24.0B forecast for 2018,” according to Forbes.

As more organizations embrace the power of artificial intelligence, AI ETFs have the potential to benefit.

Here are five AI ETFs that are grabbing headlines this year.

1. Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 3X Shares (UBOT). UBOT tracks the Indxx Global Robotics and Artificial Intelligence Thematic Index and seeks daily investment results of 300% of the performance of the index. The index provides exposure to companies creating the systems, hardware, and software with the greatest potential of eliminating the need for humans, according to a recent Direxion note.

2. First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT). ROBT tracks the Nasdaq CTA Artificial Intelligence and Robotics Index. Securities included in the index must be considered AI enablers, engagers, or enhancers, meaning they develop, design or add value within the AI and robotics ecosystem.

3. Global X Robotics & Artificial Intelligence ETF (BOTZ). With its high growth potential, unconstrained approach, and ETF efficiency, BOTZ tracks the Indxx Global Robotics & Artificial Intelligence Thematic Index. Besides investing in robotics companies, it also invests in autonomous vehicles.

4. iShares Robotics and Artificial Intelligence ETF (IRBO). IRBO is new and seeks exposure to companies in developed and emerging markets that are at the forefront of AI innovation and that can shape the global economic future. The fund has seen some turbulence, however. “IRBO has beaten the SPDR S&P 500 ETF (SPY) since inception, but that outperformance is marginal,” according to Forbes.

5. ROBO Global Robotics and Automation Index ETF (ROBO). ROBO tracks the ROBO Global Robotics & Automation Index. The fund gives investors access to companies that “produce enabling technologies and applications that have the potential to be a driving force of change and propel global economic growth and productivity,” according to the fund’s fact sheet.

As more companies turn to AI for problem-solving, these ETFs provide a potential opportunity for investors to benefit as artificial intelligence drives innovation.

For more market trends, visit ETF Trends.