Future focus: How to diversify your portfolio with ASX AI ETFs

Looking for a simple and effective way to capitalise on the growth of AI technologies across global markets?

| More on:
a man in a business suit points his finger amid a digitised map of the globe suspended in the air in front of him, complete with graphs, digital code and glyphs to indicate digital assets.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

As the influence of artificial intelligence (AI) expands across industries here in Australia and globally, ASX investors are keen to harness its potential.

One effective way to capitalise on this tech revolution is to invest in AI-focused exchange-traded funds (ETFs). These funds offer a diversified entry point into a range of companies in the AI tech sector.

And by investing in ASX AI ETFs, you can participate in the growth of AI technologies while mitigating the risks associated with single-stock investments. Let's take a closer look.

What are ASX AI ETFs?

AI ETFs track the performance of ASX companies involved in AI research and development. There are a growing number listed on the ASX. Some of the most popular include:

  • BetaShares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ) invests in companies involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles.
  • Global X ETF Artificial Intelligence ETF (ASX: GXAI) tracks the performance of the Indxx Artificial Intelligence and Big Data Index, which includes stocks like NVIDIA Corp (NASDAQ: NVDA) and Amazon.com Inc (NASDAQ: AMZN).
  • The Global X Semiconductors ETF (ASX: SEMI) provides exposure to the semiconductor industry, which is crucial to developing AI technologies. 

These ETFs track a broad variety of AI companies, including large and small-cap stocks. They also offer global exposure to various countries, such as the United States, China, and Europe.

Factors to consider when investing in ASX AI ETFs

Before you invest in an AI ETF, there are a few things to think about:

  • Investment objectives: What are your investment objectives? Are you looking for long-term growth or short-term gains?
  • Risk tolerance: How much risk are you willing to take? AI ETFs can be volatile, so it's essential to be comfortable with the level of risk involved.
  • Fees: ETFs typically have lower fees than actively managed funds. However, it's important to compare the fees of different ETFs before you invest.
  • Liquidity: This measures how easily an ETF can be bought and sold. ETFs with high liquidity are easier to trade.

Investing in the future 

Investing in ASX AI ETFs offers a strategic gateway into the rapidly evolving realm of artificial intelligence.

As the technological landscape continues to shift, ASX AI ETFs provide broad exposure to a dynamic sector without the concentrated risk of individual stock investments. 

Before committing capital, you should carefully evaluate your financial goals and risk tolerance, consider associated fees, and assess the liquidity of your chosen ETFs to ensure alignment with your investment strategy.

By doing so, you can position yourself to benefit from the technological advancements that AI promises, while navigating the inherent volatility of this transformative industry.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Katherine O'Brien has positions in Amazon. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon and Nvidia. The Motley Fool Australia has recommended Amazon and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Investing Strategies

Woman calculating dividends on calculator and working on a laptop.
Dividend Investing

What's the dividend yield of NAB shares right now?

What’s the size of NAB’s payout?

Read more »

Older couple enjoying the backyard
Dividend Investing

3 ASX 200 dividend stocks for investors to buy

Analysts are expecting these stocks to provide great yields. But how great?

Read more »

a man looks down at his phone with a look of happy surprise on his face as though he is thrilled with good news.
Growth Shares

2 highly rated ASX growth shares to buy before it's too late

Analysts don't want you to miss out on these growing companies.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Dividend Investing

2 cheap ASX dividend shares I'd buy for income

I think these two stocks can provide excellent dividends.

Read more »

Dividend Investing

Forget term deposits and buy these ASX dividend shares

These dividend shares have been tipped by analysts to provide investors with yields that are superior to term deposits.

Read more »

A woman in hammock with headphones on enjoying life which symbolises passive income.
Dividend Investing

Buy 300 shares in this glorious ASX 200 dividend stock and create almost $2,000 in passive income

Atop the juicy passive income, I like this ASX dividend beauty for its potential share price gains.

Read more »

A pilot stands in an empty passenger cabin smiling with his arms crossed looking excited
Dividend Investing

Here's the Qantas dividend forecast through to 2026

Will the Flying Kangaroo bring back its dividend soon?

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Growth Shares

5 stellar ASX growth shares to buy for strong returns

Analysts think growth investors should be snapping up these stocks when the market reopens.

Read more »