Page 26 - Investment Advisor July/August 2023

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He cited, for example, Coveo, a publicly
traded Toronto company with market cap “How does this impact Pearson Publishing?
under $700 million that’s building AI for How does this impact Barnes & Noble? How
shopping carts and searches. “But they’re a
tiny little company that isn’t in any ETFs does this impact Disney? That’s where this
because it’s still too small,” Nadig said. “That’s starts to get really interesting to me because
what’s fun and exciting about a space like this,
there is this opportunity to find these hidden I suspect we’re going to discover fairly
gems, to find these smaller companies and
potentially to get there a little early.” quickly that folks who are in some form of
“The challenge I think is trying to find knowledge business, this is going to be a
out as an investor whether you want to be
investing in the picks and the shovels or put non-insignificant productivity increase.”
money behind the prospectors who will use
the picks and shovels or the companies doing —Dave Nadig
the research to find the gold, Nadig said. (Two
AI ETFs — ROBO and THNQ — are built on VettaFi indexes.) year, doing it. That doesn’t come along very often in busi-
The real AI beneficiaries may be the companies that best ness where you get these instantaneous productivity boosts
use the technology to boost productivity, Nadig and Armour simply for paying attention.”
suggested in separate interviews. “How does this impact Morningstar’s Armour similarly suggested that compa-
Pearson Publishing? How does this impact Barnes & Noble? nies that can incorporate AI to give a better service or prod-
How does this impact Disney? That’s where this starts to uct to other companies should benefit. One publicly traded
get really interesting to me because I suspect we’re going company that has a place in four Morningstar-defined AI
to discover fairly quickly that folks who are in some form of ETFs is Twilio, which offers customer service chatbots that
knowledge business, this is going to be a non-insignificant integrate with other companies’ AI solutions to provide
productivity increase,” Nadig said. service to clients, Armour noted. “Just being able to get AI
“So there’s a bit of an arms race. If you are in the textbook in someone else’s system is worthy of being included in AI
publishing business, if you get there before your competi- ETFs,” he said.
tors, it’s not unreasonable for me to think you’re going to
get a 5% to 10% increase in productivity immediately, this Staff Reporter Dinah Wisenberg Brin can be reached at [email protected].

8 Top AI ETFs in 2023 BOTZ offers global exposure to multiple
like other thematic funds, artificial intelligence ETFs differ in focus and holdings, sectors and industries that may benefit
although there is often overlap among portfolios. Analysts use various criteria in from robotics and AI, the firm says.
identifying and categorizing AI ETFs, including these eight popular funds.
year-to-date performance and assets under management data through the June 13 ArK Autonomous Technology &
market close comes from Morningstar Direct. All expense ratio and top holdings data robotics eTF (ArKQ)
is from Morningstar.com. • AUM: $1.07 billion
• Expense ratio: 0.75%
Global x robotics & Artificial BOTZ aims to provide investment returns • Inception date: 9/30/2014
Intelligence eTF (BoTZ) that generally correspond to performance • Performance (YTD): 35.7%
• AUM: $2.42 billion of the Indxx global Robotics & Artificial • Top 10 holdings: Tesla, uipath, Kratos
• Expense ratio: 0.690% Intelligence Thematic Index (before fees Defense & security, Trimble, Iridium
• Inception date: 9/12/2016 and expenses), global X says. Communications, Teradyne, Komatsu,
• Performance (YTD): 41.15% The firm, citing research from BCC Aerovironment, Deere, NvIDIA
• Top 10 holdings: NvIDIA, Intuitive publishing, notes the global robotics
surgical, Keyence, ABB, Fanuc, market was valued at more than $55 ARKQ is an active equity ETF seek-
Dynatrace, OMRON, yAsKAWA, billion in 2021 and that forecasts sug- ing “thematic multi-cap exposure to
sMC, Cognex gest it could reach $91 billion by 2026. innovation elements including robotics,

24 InvesTmenT ADvIsor July/August 2023 | thinkAdvisor.com