7 Best Robotics and AI ETFs

The best robotics and AI ETFs

There is a lot of overlap between the artificial intelligence and robotics worlds. But the best robotics and AI ETFs differ in how much they focus on one, the other or both.

Each ETF offers its own take on these explosive industries – so take note of their differences when determining which might be the best ETFs to buy for you and personal goals.

We'll begin with AI-focused funds, transition to mixed robotics and AI ETFs and finish with robotics-specific ETFs.

Global X Artificial Intelligence & Technology ETF

• Assets under management: $3.0 billion
• Expenses: 0.68%, or $68 annually for every $10,000 invested

Our first AI-specific ETF is the Global X Artificial Intelligence & Technology ETF (AIQ, $43.49).

Launched in May 2018, AIQ invests in companies that are developing AI products and services as well as companies responsible for hardware that helps facilitate artificial intelligence for big data uses.

The result is an 85-stock portfolio made up of three types of companies:

Consumer-focused AI, such as Magnificent 7 stocks Meta Platforms (META) and Netflix (NFLX);

Backend services AI, such as Dow stock Salesforce (CRM) and Oracle (ORCL); and

Hardware manufacturers, such as semiconductor stock Cisco Systems (CSCO).

As you can see, there's a heavy tilt toward mega-cap, beginner-friendly stocks, which will certainly ease investors' concerns about investing in less stable niche plays.

But AIQ's makeup also provides us with another reason why plain-vanilla tech ETFs aren't the right way to capture AI and robotics themes.

In addition to the fact that even a tech-sector fund will contain many companies that don't deal in artificial intelligence, that kind of fund also won't capture the other sectors involved in AI.

To wit, while AIQ has 69% of its assets in tech stocks, it also has 15% in communication services stocks, 9% in consumer discretionary and 5% in industrials as well as light exposure to financials and healthcare.

One more thing worth noting is that AIQ offers some geographical diversification.

More than 67% of the fund is U.S.-based, but it also holds stocks from 10 other countries, including China (9%), South Korea (5%), Ireland (4%) and Taiwan (4%).

Learn more about AIQ at the Global X provider site.

ROBO Global Artificial Intelligence ETF

• Assets under management: $195.5 million
• Expenses: 0.68%

Another pure play worth noting is the relatively young ROBO Global Artificial Intelligence ETF (THNQ, $54.61), which launched in May 2020.

Like AIQ, THNQ focuses on companies that bring artificial intelligence to the masses as well as companies whose products make AI possible.

Indeed, THNQ sorts its portfolio of artificial intelligence stocks into two main buckets:

Infrastructure (65%), which includes businesses ranging from big data and cloud providers to semiconductor manufacturers; and

Applications & Services (35%), which includes e-commerce, consulting services, factory automation and more.

Each of these companies must meet several criteria to be considered genuinely tethered to AI, including high levels of AI investment and high AI-revenue purity.

Cybersecurity stock Cloudflare (NET), one of THNQ's 53 holdings, uses AI to help companies by protecting against bot attacks and spotting phishing attempts.

Alphabet (GOOGL) uses artificial intelligence across its business and said in its fourth-quarter earnings announcement that it will increase capital expenditures, which includes AI spending, by more than 40% this year.

THNQ's portfolio is concentrated in the U.S. (76% of assets), but it includes exposure to Taiwan (9%) as well as the Netherlands (4%) and China (4%).

Learn more about THNQ at the ROBO Global provider site.

ROBO Global Robotics & Automation Index ETF

• Assets under management: $1.0 billion
• Expenses: 0.95%

We'll start our look at "mixed" robotics and AI ETFs with the granddaddy of them all, the ROBO Global Robotics & Automation Index ETF (ROBO, $60.29), which launched in October 2013.

As the name suggests, ROBO is not a pure-play artificial intelligence fund (nor are most AI ETFs). Instead, the fund targets "global companies that are driving transformative innovations in robotics, automation, and artificial intelligence (RAAI)."

So, while AI is part of ROBO's game, it's just that: part. It's not a large part, either.

Like THNQ, ROBO divides its portfolio into two main buckets – Application (59%) and Technologies (41%), each of which comprises several subgroups.

The Computing & AI subgroup makes up just 12% of the portfolio. That's behind Manufacturing & Industrial Automation at 20% as well as Logistics Automation at 15% and Actuation at 13%. Healthcare is at 10%.

You can see how industrial in nature ROBO is through the above and other groupings, such as Business Process Automation, Sensing, Integration and even 3D Printing.

ROBO holds 75 stocks, including Intuitive Surgical (ISRG), which uses artificial intelligence to analyze real-time data during procedures using its da Vinci robotic surgical system.

Japan's Harmonic Drive Systems (HSYDF) is the top holding and uses AI to optimize the performance of its robotic applications.

In fact, you see plenty of international stocks in ROBO – a truly "global" fund with just 44% of assets dedicated to U.S. firms.

Japan (21%) looms largest after that, followed by Taiwan (9%) and Germany (8%), among roughly 50 total countries.

Just note that this heavier international exposure comes at a cost – ROBO is the most expensive AI ETF on this list, at 0.95% in annual fees.

Learn more about ROBO at the ROBO Global provider site.

First Trust Nasdaq Artificial Intelligence and Robotics ETF

• Assets under management: $496.6 million
• Expenses: 0.65%

The First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT, $48.47) gives itself away in its name.

As for its makeup, 51% of assets are invested in the technology sector, alongside another 21% in industrials and healthcare (9%).

Still, a good chunk of assets are dedicated toward consumer discretionary stocks (7%) and communication services (5%), with exposure to consumer staples stocks (2%), energy (2%) and financials (2%).

ROBT seeks to invest in three types of companies involved in AI, robotics or automation.

This includes Enablers (develop the building blocks); Engagers (design, create, integrate or deliver via products, software or systems); and Enhancers (provide services within the ecosystem, but not core to their offerings).

The fund scores companies based on its involvement within one of those categories. It then builds the portfolio with 60% of assets in Engagers, 25% for Enablers and 15% for Enhancers. Stocks are equally weighted within each category, so single-stock risk is minimized.

The greatest weighting right now, for instance, is AI lending platform Upstart Holdings (UPST) at 2.3%. Other holdings include defense contractor AeroVironment (AVAV) and blue chip tech stock International Business Machines (IBM).

This is a larger portfolio than most AI ETFs, with more than 100 holdings.

And it too is global in nature, with 35% of assets invested in foreign stocks from Japan (9%), Israel (3%), the U.K. (3%) and a few other countries.

Learn more about ROBT at the First Trust provider site.

iShares Future AI & Tech ETF

• Assets under management: $1.1 billion
• Expenses: 0.47%

The iShares Future AI & Tech ETF (ARTY, $40.70) is not a pure-play AI ETF, but it does provide more exposure to the theme than some other products we highlighted.

ARTY is an index fund that "combines a rules-based methodology with fundamental research to adapt to the evolving AI landscape."

The ETF invests in four key areas of the AI value chain: Generative AI; AI Data & Infrastructure; AI Software; and AI Services.

Nvidia, the fund literature notes, is synonymous with AI data and infrastructure and has become the biggest company in the world supplying AI chips for training large language models including ChatGPT.

Ansys (ANSS) develops and markets multiphysics engineering simulation software for product design, testing and operation.

The technology sector shines in ARTY at 84% of the portfolio. Communications commands another 6% of assets, while industrials and utility stocks take up another 5% and 3% of the portfolio, respectively.

This AI ETF is geographically concentrated too, with the U.S. at 85% of holdings. Japan accounts for another 5% and France 4%. Companies from Canada, China and Taiwan are also represented.

Perhaps most notable about ARTY is its 0.47% expense ratio – tied with our final fund for lowest fees among these robotics and AI funds.

Learn more about ARTY at the iShares provider site.

Global X Robotics & Artificial Intelligence Thematic ETF

• Assets under management: $2.7 billion
• Expenses: 0.68%

The Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ, $32.49) launched a few years after ROBO, in 2016, and is very much a veteran name in the space. Despite what that name might imply, BOTZ leans more heavily on robotics and industrial automation.

Global X doesn't explicitly break out AI as an industry, though there are clear artificial intelligence connections, including Nvidia.

However, this tight portfolio of 50 holdings is much thicker in robotics names, including the likes of Swiss industrial technology firm ABB (ABB) and Japanese sensor maker Keyence (KYCCF).

Again, there's overlap – both of those industrial-facing firms involve elements of artificial intelligence, but they're less "true" AI plays and more in the robotics camp.

BOTZ is a geographically diversified AI ETF, with 49% of its holdings in the U.S., 30% in Japan and another 9% in Switzerland. The rest of the portfolio is scattered across seven other countries.

Also worth noting is BOTZ's high single-stock concentrations at the top of the portfolio. Nvidia accounts for 11%, and ABB (8%), Intuitive Surgical (8%) and Keyence (7%) account significant allocations too.

Still, Global X's Robotics & Artificial Intelligence is a strong offering from a leader in thematic ETFs.

Learn more about BOTZ at the Global X provider site.

VanEck Robotics ETF

• Assets under management: $17.1 million
• Expenses: 0.47%

Our final ETF is a robotics-specific fund, and a young 'un at that.

The VanEck Robotics ETF (IBOT, $46.20), launched on April 5, 2023, seeks to replicate the performance of the BlueStar Robotics Index, which tracks companies involved in robotics.

"Advances in technology and efficiency continue to drive down cost as well as make robots much more capable. More companies are finding it advantageous to implement robots because of the reduced cost and improved capabilities," VanEck says in its IBOT fund profile.

To capture this industrial automation, IBOT holds companies that generate at least 50% of their revenue from one or more of seven subthemes deemed part of the investible universe.

These include: Robots and manufacturing/industrial automation systems; Robotic surgical systems; 3D printing; Robotics or manufacturing computer aided design or other software; Semiconductor manufacturing systems; Machine vision; and Embedded machine learning chips.

Technology is the largest sector at 60%, followed by industrials at 34% and a smattering of consumer discretionary, healthcare and energy stocks.

The 64-holding portfolio includes many of the same names that appear in other AI ETFs on this list: Nvidia, Keyence and ABB are among IBOT's top holdings.

And, again, you're getting plenty of international exposure by dipping into the robotics and AI space.

The U.S. makes up 42% assets, followed by a large holding in Japanese stocks (21%) as well as shares in companies from Germany (8%) and Switzerland (7%), among other countries.

Learn more about IBOT at the VanEck provider site.

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