Unraveling the Mystique: A Value Investor’s Guide to Top AI ETFs

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Dear Diary,

If I’ve found my way to this pixelated confessional, it’s likely because I’ve entertained the notion that AI isn’t merely the latest financial buzzword, but rather the phoenix-like force that propelled giants like Nvidia (NVDA) to dizzying heights-over a 13-fold increase over five years, mind you! Cue the inspirational music.

Now, I can hear the chorus of my inner investors lamenting: “Oh, the tragedy! I missed the Nvidia bonanza! What should I do now? Will my financial resurrection ever come?” Sigh. Yet, a bit of history lesson might illuminate the present path. Nvidia didn’t leap onto the AI bandwagon just for kicks; no, their fame first burgeoned from their prowess in creating fabulous chips tailored for mining-or as I like to think of it, for beverages in breathtakingly ridiculous video game graphics.

True, finding the “next Nvidia” bears the same challenge as finding a single diamond in a vast, crushing pile of club sandwiches. Risky endeavor, folks. Gird your loins!

But fear not, my fellow seekers of fortune! One remedy for this conundrum is as simple as diversifying your investments. Rather than pinning your hopes on a solitary stock to replace your long-lost dream boat, why not take a chance on an exchange-traded fund (ETF) that rocks a solid portfolio across various AI stalwarts? And who knows? One of those might just turn out to be the next shining star of the AI universe, and you’ll have a little piece of the pie.

In theory, this is supposed to reduce your risk while increasing your chances of success. What could possibly go wrong?

Three Distinct AI ETFs to Mull Over

But alas, a word of caution, dear investor! Not all AI-themed ETFs are born equal. Some are more questionable than a three-day-old takeout box. How do I know? My trusty companion, Morningstar Research, guided me through the treacherous waters of AI ETFs until I identified three contenders: Sofi Agentic AI ETF (AGIQ), Tortoise AI Infrastructure ETF (TCAI), and Draco Evolution AI ETF (NYSEMKT: DRAI).

Looking closely, the returns of these funds occupied a broad expanse-less than 8% for Sofi Agentic, a snail-paced 12% for Tortoise AI, and a zippy 24% for Draco Evolution. How can this be? The same sector yet such wide-ranging fortunes?

The answer, dear reader, lies in their starkly different investment choices. Isn’t it delightful how variety keeps life (and finances) alluring?

Sofi Agentic AI ETF

Allow me to introduce my first contestant: Sofi Agentic. With the “usual suspects” nestled in its holdings, this ETF boasts an ensemble cast featuring heavyweight champions like Nvidia, Tesla, and Palantir Technologies. A high-flying list, to be sure, making up about 26% of its portfolio. And yet, the outcome for the investors? A lamentable less-than-8% return-about as exciting as watching paint dry when you could have just invested in the Vanguard S&P 500 ETF, which soared to 18% like a kite on a blustery day.

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Tortoise AI Infrastructure ETF

Next comes Tortoise AI, a fund with an entirely different approach. Rather than chasing after the flamboyant AI personalities, Tortoise seeks out the quiet builders of infrastructure: think electrical wizardry with Vertiv Holdings, the memory keepers of Seagate Technology, and the stalwarts of Dell Technologies. This strategy proves fruitful, with its returns comfortably outpacing Sofi Agentic despite holding a less-concentrated 15% in those names. Who says you can’t play it smart while looking toward the future?

Draco Evolution AI ETF

Perhaps the most eyebrow-raising revelation came when digging into the Draco Evolution AI fund. Surprise, surprise! Instead of investing directly in the dazzling realm of AI, this ETF seems to favor sharing its love with other ETFs. Yes, you heard it right-top holdings include a hefty slice of the ProShares UltraPro QQQ and the audaciously bullish Direxion Daily S&P 500 Bull 3X ETF.

In fact, these combined holdings eat up nearly 60% of the portfolio- a true experiment in diversification! And guess what? It’s paying off remarkably, outperforming its less adventurous counterparts.

Lessons from a Curious Investor

So, what pearls of wisdom can we extract from my humble exploration? First and foremost, be a diligent scholar of your investments-don’t take the label at face value! Just because an ETF carries the coveted “AI” moniker doesn’t guarantee its authentic love for all things artificial intelligence. Moreover, just knowing it invests in AI doesn’t ensure it aligns with your anticipated winners either.

And there you have it-sometimes, the smartest play is to embrace a wide net of diversification and remember that fortune favors the well-prepared, not just the audacious. Off to find my next winning strategy. What could possibly go wrong? 🧐

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2025-09-25 11:18