AI ETFs

[PlayinwithFIRE]

Before our new overlords takeover, I went looking for AI centric ETFs.

Most articles return 4 popular ones...but on looking at the holdings, I'm kind of confused. None of them seem to hold the well known (or atleast the newsy) AI companies like Google/Microsoft, etc...and some of the holdings seem so far off AI, I'm wondering if I just am unaware or not thinking about this correctly.

Sure, everything will have some level of AI added to it, but do i really need a secondary investment effect from automotive sensors? Seems like they value the downstream effects more than the invention itself ?

I don't know, these funds seem very untargeted to me.

As an example, here is Vanguards offering (BOTZ) top five holdings, which account for about 40% :

Keyence (KYCCF 0.81%): A Japanese company that makes factory automation products such as sensors and scanners.

Fanuc (FANUY 0.29%): Japanese manufacturer of factory automation products including lasers, robots, and electric injection molding machines.

Intuitive Surgical (ISRG -0.71%): Maker of the da Vinci robotic surgical system, which allows for minimally invasive surgeries with precise control.

ABB (ABB 0.46%): Swiss maker of industrial automation and robotics products for use in utilities and infrastructure.

NVIDIA (NVDA 2.58%): Semiconductor maker whose chips are used in a wide variety of applications -- including autonomous vehicles, virtual computing, and cryptocurrency mining -- and are central to many AI technologies.

 

[Sojourner]

IMHO, it's probably foolish to think that you—a retail investor who doesn't spend 10 hours/day keeping up with all the companies working on AI R&D—could know more about what to include in an AI-focused ETF than the ETF manager. While I agree at first blush that the list of companies in BOTZ looks questionable, what do I know? The ETF managers (at least, the good ones) are paid to be experts in this field. If you really want to overweight your exposure to AI-focused companies, then pick an ETF or MF that you're interested in, read the prospectus carefully, and take the leap of faith.

Personally, I'm happy with the S&P500 and total market funds, as they will include AI-focused companies naturally and won't rely on trying to pick winners and losers in advance. For example, MSFT (which owns a substantial chunk of OpenAI), NVDA, and GOOG make up about 11% of the S&P500 already, and this will only grow if/when any of these companies capitalize on advancements/breakthroughs in AI.

 

[NW-Bound]

I just remember about block chain technology which was hot a couple of years ago. There are probably several block chain ETFs, and I don't mean crypto currency which is just an application of block chain.

How are the above doing? I am just too lazy to look them up. Nobody seems to talk about block chain anymore.

 

[ERD50]

I just remember about block chain technology which was hot a couple of years ago. There are probably several block chain ETFs, and I don't mean crypto currency which is just an application of block chain.

How are the above doing? I am just too lazy to look them up. Nobody seems to talk about block chain anymore.

There was a thread on this a while back - investing in AI, or was it AI used for investments?

At any rate, yes, "block chain" was touted as all the rage back when we had the crypto fans posting here. But you are right, even if crypto faltered, the block chain technology should still be useful - why haven't we heard of it recently?

-ERD50

 

[target2019]

I'd skip the ETF's, and look at the individual companies each AI ETF holds.

There will be some smaller companies that do extremely well. In many cases they'll become targets for acquistion in a few years.

 

[Lsbcal]

You guys must have missed the CB radio craze of the 1970's.

link: https://www.nytimes.com/1978/04/17/archives/cb-radio-industry-is-more-in-tune-after-2-years-of-static-added.html

 

[aja8888]

You guys must have missed the CB radio craze of the 1970's.

link: https://www.nytimes.com/1978/04/17/archives/cb-radio-industry-is-more-in-tune-after-2-years-of-static-added.html

I didn't miss it. I had a CB radio in my 1973 Pontiac.

 

[marko]

I just remember about block chain technology which was hot a couple of years ago. There are probably several block chain ETFs, and I don't mean crypto currency which is just an application of block chain.

How are the above doing? I am just too lazy to look them up. Nobody seems to talk about block chain anymore.

I'll take JNJ, PG, XOM, MO and KO for $1000, Alex.

 

[Henry Lili]

I'll take JNJ, PG, XOM, MO and KO for $1000, Alex.

Own them all as well [emoji16]

 

[marko]

Own them all as well [emoji16]

I try to stay with well known, older companies that pay a dividend. If I can’t easily understand what they do, I tend to stay away.

"Get rich slowly."

 

[Aerides]

I just remember about block chain technology which was hot a couple of years ago. There are probably several block chain ETFs, and I don't mean crypto currency which is just an application of block chain.

How are the above doing? I am just too lazy to look them up. Nobody seems to talk about block chain anymore.

Because - for now - we have determined that it is not a viable topic for ER.org

https://www.early-retirement.org/forums/f44/cryptocurrency-discussions-on-er-forum-116586.html

So let's stick to AI and keep on topic.

 

[target2019]

Block chain is a ledger system. It's a good example of how an idea or tech gets implemented by large companies.

AI is similar. Initially there are innovators, small and large. Small tech matures and might blossom into a large cap. But many of those will be bought up by the big guys.

You might find a focused ETF for block chain or AI, but for the long run you'll do better with S&P 500.

But it's fund to experiment with an ETF. Since I'm consoildating all individual companies, I got bored. So I'm playing with a materials ETF. Play the game, have fun, don't bet the farm!

 

[NW-Bound]

Block chain is a ledger system. It's a good example of how an idea or tech gets implemented by large companies.

AI is similar. Initially there are innovators, small and large. Small tech matures and might blossom into a large cap. But many of those will be bought up by the big guys.

You might find a focused ETF for block chain or AI, but for the long run you'll do better with S&P 500.

But it's fund to experiment with an ETF. Since I'm consoildating all individual companies, I got bored. So I'm playing with a materials ETF. Play the game, have fun, don't bet the farm!

Yes, block chain is more than crypto currency. I was asking about the former, not the latter. Same as AI being more than just robot-taxis and chatbots.

And I agree that investing in general tech stocks is a better bet. When a technology is useful, it will find its way into many applications and industries.

Another example is the microprocessor technology being a whole lot more than desktop PCs, which was the 1st application people had 1st hand knowledge of.