The Algorithm & The Abyss: AI ETFs

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They say by 2033, the artificial intelligence market will swell to nearly five trillion dollars. A figure so vast it mocks earthly concerns, doesn’t it? As if a sum that could resolve famines and build utopias will merely line the pockets of those already…comfortable. UN Trade & Development, those diligent accountants of the inevitable, have predicted it. But predictions, like prophecies, are often self-fulfilling, or spectacularly, hilariously wrong. Billions are being poured into this digital alchemy, and one can’t help but wonder if we’re building a new god, or merely a more efficient means of distraction. Regardless, the market, like a restless spirit, demands to be fed. And so, we turn to the exchange-traded funds, these convenient vessels for our hopes and anxieties.

The year 2025, now receding into the mists of memory, saw a feverish bloom in AI stocks. A bubble, some whispered. A revolution, others proclaimed. The froth has settled somewhat, leaving behind a residue of…opportunity, perhaps? The point is not whether these companies will deliver on their promises, but that the underlying trend—the relentless march of the algorithm—is undeniable. And where there is a trend, there are funds eager to capitalize on it. Let us, then, examine a few of these offerings, and attempt to discern, amidst the hype and the hyperbole, a glimmer of…something.

Global X Robotics & Artificial Intelligence ETF

The Global X Robotics & Artificial Intelligence ETF (BOTZ 2.29%) possesses a distinctly industrial bent. It’s less concerned with the ethereal realms of software and more with the cold, hard reality of gears and circuits. A pragmatic approach, one might say. Launched a decade ago, it was among the first to venture into this digital wilderness. While others have since emerged, focusing on the more glamorous aspects of the industry, this fund remains stubbornly grounded in the tangible. A bit like a bureaucrat refusing to embrace the cloud. It’s diversified, certainly, but one suspects it’s also slightly…bored. It lacks the manic energy of its competitors, preferring a steady, if unspectacular, course.

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First Trust Nasdaq Artificial Intelligence & Robotics ETF

The First Trust Nasdaq Artificial Intelligence & Robotics ETF (ROBT 2.95%) categorizes its holdings into “enablers,” “engagers,” and “enhancers.” A charmingly bureaucratic taxonomy. The enablers provide the building blocks – the silicon and steel. The engagers design the contraptions. And the enhancers…well, they add a bit of polish, perhaps. Sixty percent of the portfolio is dedicated to the engagers, giving it a robotics tilt, though not as pronounced as the Global X offering. One imagines a committee meeting, debating the proper categorization of each company. A perfectly reasonable way to spend an afternoon, if you have eternity at your disposal.

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Roundhill Generative AI & Technology ETF

The Roundhill Generative AI & Technology ETF (CHAT 1.82%) is a gambler’s play, betting heavily on the potential of generative AI to unlock unprecedented levels of productivity. A bold claim, considering the current state of…everything. Actively managed, it boasts a nimble portfolio of only fifty companies. This allows it to react quickly to changing market conditions, which, in the world of AI, means approximately every five minutes. Its top holdings—Alphabet, Nvidia, Microsoft, Amazon, and Meta—are hardly a surprise. It’s essentially a diversified tech ETF with a slightly higher expense ratio. The devil, one suspects, is in the 0.75%.

WisdomTree Artificial Intelligence & Innovation ETF

The WisdomTree Artificial Intelligence & Innovation ETF (WTAI 1.86%) casts a wider net, targeting companies involved in all aspects of AI development. A laudable goal, but one that inevitably leads to a concentration of assets in U.S. mega-cap tech. Seventy-five percent of the portfolio is dedicated to American companies, and five of the Magnificent Seven dominate the top ten holdings. It’s a bit like searching for exotic birds in a chicken coop. One can find them, eventually, but the experience is hardly…rewarding.

iShares AI Innovation & Tech Active ETF

The iShares AI Innovation & Tech Active ETF (BAI 0.55%) is a latecomer to the party, launched in late 2024. But the iShares brand, like a well-worn passport, opens doors. It’s already one of the largest funds in the space, with approximately $8.6 billion in assets. Also actively managed, it maintains a concentrated portfolio of around forty stocks. It, too, is heavily weighted towards U.S. mega-cap tech—Nvidia, Broadcom, and Alphabet. The active management is a plus, but one can’t help but wonder if it’s merely rearranging the deck chairs on the Titanic. Perhaps a bit more exposure to the global AI ecosystem is in order. Or perhaps not. The abyss, after all, cares little for diversification.

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2026-02-06 12:54