The artificial intelligence (AI) boom is here as companies are rolling out new AI-powered products and services. Tech and other industries have stronger growth prospects due to AI and investing in an exchange-traded fund (ETF) is an excellent way for investors to gain exposure to these opportunities.
One ETF that has been doing well this year is the Robo Global Artificial Intelligence ETF (NYSE Arca: THNQ). THNQ is a tech-focused ETF but unlike many funds with exposure to AI, it isn’t overly exposed to one or two big stocks. Nvidia (NASDAQ:NVDA) is its largest holding but at just under 2.3%, the fund isn’t going to be heavily impacted with how Nvidia performs on any given day. Other top holdings include Palo Alto Networks (NASDAQ:PANW) and Microsoft (NASDAQ:MSFT) but they too account for a little more than 2% of the ETF’s total net assets.
With how quickly tech stocks have soared this year, having good diversification can be crucial right now to ensure that investors aren’t taking on too much risk. And with 66 holdings in the fund, the ETF isn’t overly broad in that investors are gaining exposure in little-known tech stocks; large-cap stocks account for 80% of the fund’s total holdings. U.S. stocks also take up more than three-quarters of the ETF.
This year, the ETF has risen by more than 40%, outperforming the S&P 500, which is up by 18% thus far. If you’re a long-term investor seeking exposure to AI without wanting too much risk and dependence on just a few stocks, this can be an excellent ETF to buy and hold for the long haul.