With the rapid development of artificial intelligence (AI) technology, more and more investors are looking to allocate capital into AI focused mutual funds. By investing in mutual funds that target AI companies and innovations, investors can gain exposure to this high-growth sector. However, not all AI mutual funds are created equal in terms of performance and investment strategy. This article will explore the landscape of top performing mutual funds investing in artificial intelligence, and provide insights into their investment philosophies and portfolio compositions.
ARK Autonomous Technology and Robotics ETF for concentrated AI exposure
The ARK Autonomous Technology and Robotics ETF (ARKQ) offers concentrated exposure to companies expected to benefit from the development of new products or services related to energy, automation, manufacturing, materials and transportation. The mutual fund has Tesla, Nvidia, and Trimble as its top 3 holdings, with over 50% of assets invested in AI, big data and cloud technologies. ARKQ aims for long-term growth of capital by investing under a thematic approach. Despite having high fees, the fund delivered stellar returns of over 40% in 2020 owing to its high-conviction AI bets.
Invesco Global Thematic Innovation ETF adopts multi-thematic strategy
The Invesco Global Thematic Innovation ETF (GTIP) provides exposure to companies involved in innovative and disruptive themes, including robotics, digital security, cleaner energy, healthcare innovation, and next gen transportation. The fund allocates around 20% of its portfolio into AI, big data and cloud stocks like Microsoft, Amazon and Alphabet. With a multi-thematic approach, GTIP aims to identify transformative long-term trends and the companies benefiting from technology fueled disruption. The fund has delivered strong returns while carrying relatively lower risk than other thematic investments.
iShares Robotics and Artificial Intelligence ETF for diversified exposure
The iShares Robotics and Artificial Intelligence ETF (IRBO) offers diversified exposure to global stocks involved in robotics and AI developments. The fund tracks an index comprised of robotics, automation and AI themes, with major holdings across industrials, information technology, healthcare and consumer discretionary sectors. With its balanced approach and global scope, IRBO provides investors broad access to the growing robotics and AI ecosystem. The fund has demonstrated resilient performance despite challenging market conditions.
BMO MSCI AI Global Equity Index ETF focuses on AI innovators
The BMO MSCI AI Global Equity Index ETF (AIAI) tracks an index of companies identified as AI innovators, adopters and enablers based on MSCI’s research framework. AIAI provides exposure to larger well-established AI stocks like Google, Microsoft and IBM as well as emerging AI players across various sectors and geographies. With its niche focus on AI technology leaders, this fund offers targeted exposure for investors bullish on AI’s long-term impact. However, the concentrated portfolio is likely to experience higher volatility compared to broader mutual funds.
In summary, mutual funds focused on investing in artificial intelligence can offer investors targeted exposure to the high-growth AI sector. Leading AI funds like ARK Autonomous Technology and Robotics ETF, Invesco Global Thematic Innovation ETF, iShares Robotics and Artificial Intelligence ETF and BMO MSCI AI Global Equity Index ETF adopt different strategies and philosophies for their AI investments, providing investors a range of options. When selecting an AI mutual fund, investors should evaluate its portfolio composition, performance history, fees and overall investment mandate.