The ASX-listed exchange-traded fund (ETF) Global X Fang+ ETF (ASX: FANG) could be one of the most effective ways for Aussies to get exposure to the artificial intelligence (AI) investment theme.
Australia's stock market is known for industries like ASX bank shares and ASX mining shares. For Aussies wanting to get exposure to AI, ASX ETFs can enable us to indirectly invest in global businesses that are listed in other countries.
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Which global shares are involved in AI?
There are a growing number of businesses that are developing and offering AI services, while many more are talking about utilising AI in their operations.
For example, Nvidia offers graphic processing units (GPUs) that are key to the current boom of AI infrastructure. Nvidia's products are important in places like data centres, while Nvidia's software is being used by developers to program GPU chips.
Microsoft has introduced a number of AI features across its various products, including Copilot. It has a significant stake in OpenAI, the business behind ChatGPT and its various versions. Azure, Microsoft's cloud computing platform, is being used by clients to create AI applications.
Alphabet has its own AI offering called Gemini after changing its name from Bard earlier this year. The self-driving robotaxi service Waymo, owned by Alphabet, was recently expanded to everyone in San Francisco and Phoenix.
Apple recently announced its devices would include AI.
Broadcom has a number of hardware items needed for AI, including networking chips, GPUs and processors.
Why the FANG ETF can provide strong exposure to AI
The FANG ETF only invests in ten different US stocks, which are some of America's strongest and technologically-focused companies. It owns a stake in some of the companies I just mentioned.
Each of the positions has a weighting of around 10% within the ASX ETF:
- Alphabet (10.7% of the portfolio)
- Meta Platforms (10.4%)
- Amazon (10.3%)
- Tesla (10.3%)
- Microsoft (10.25%)
- Netflix (10%)
- Snowflake (9.9%)
- Apple (9.9%)
- Nvidia (9.4%)
- Broadcom (8.9%)
While AI shares aren't the only stocks worth investigating, this is certainly an area that is generating significant revenue growth and attracting investor attention.
The ASX ETF has a reasonable management fee of 0.35%, which isn't bad considering the high level of exposure to these tech stocks we can get.
Past performance is not a reliable indicator of future performance and certainly not a guarantee. The FANG ETF has delivered an average annual return of 21% over the past three years. If AI keeps generating revenue growth for these companies, it's possible they could keep performing as long as their valuations don't become overstretched.
