These are the best ETFs to ride the A.I. trend

Published Thu, May 25 20231:17 PM EDTUpdated Thu, May 25 20232:13 PM EDT

Jesse Pound @/in/jesse-pound @jesserpound

A surge in artificial intelligence is powering a rally in the stock market, and several ETFs on the market can give investors exposure to this boom. The current beneficiaries of AI are concentrated in a handful of major tech stocks, such as chipmaker Nvidia , which surged Thursday after a big earnings beat , as well as Microsoft and Alphabet with their chatbot products. As a result, there is no major ETF that would be considered a pure play on this particular business, but there are several funds that will give investors exposure to AI chat and search in addition to related growth areas, such as robotics. The six funds listed below all have more than $100 million in assets and are outperforming the S & P 500 year to date. There is no widely accepted index for AI stocks, so investors should take the time to dig into a fund's holdings to see how it differs from competitors. For example, Nvidia was the second-biggest holding in the Global X Robotics & Artificial Intelligence ETF (BOTZ) entering Wednesday, and the fund has returned more than 27% year to date. The ARK Autonomous Technology & Robotics ETF (ARKQ) , on the other hand, had Nvidia as its ninth-largest position, with its stake in Tesla four-times larger as of Wednesday's close. The fund is up about 17% year to date. There will likely be more AI ETFs hitting the market in coming months to meet the trend. Some small new funds include the Roundhill Generative AI & Technology ETF (CHAT) , which launched last week, and the VanEck Robotics ETF (IBOT) , which launched in April. Other places to look Another tactic for investors could be to look for actively managed growth funds, which will be looking for ways to play the AI boom. For example, the Nuveen Growth Opportunities ETF (NUGO) is up more than 17% this year and has Microsoft and Nvidia among its top-three holdings. The fund has an expense ratio of 0.55%. One consideration for investors to make when looking at adding AI exposure is their portfolio may already include a lot of the biggest names through core index funds. To bet on AI without doubling down on megacap tech, investors could look for other thematic plays that could benefit from the new technology. Jay Jacobs, U.S. head of thematics and active equity ETFs at Blackrock, told CNBC earlier this year genomics and cybersecurity were two areas that could see a boost from AI.