Last Updated on: 20th June 2024, 11:21 pm
Investing with AI: Top AI-Powered ETFs in June 2024
2024 has seen significant advancements in artificial intelligence, with major players like OpenAI and Anthropic being joined by tech giants such as Microsoft (MSFT), Snowflake (SNOW), and Meta (META) in launching new AI products. This surge in AI innovation offers investors two primary avenues to capitalize on: investing in AI through stocks and ETFs, investing with AI by leveraging AI tools for stock research or opting for AI-powered ETFs.
Applications of AI for Investors
Investment research can be an exhaustive process, requiring extensive reading and analysis. AI assistants like OpenAI’s ChatGPT and Anthropic’s Claude can significantly streamline this by summarizing lengthy documents. For instance, if you’re evaluating an actively managed mutual fund, the fund’s prospectus contains crucial details on holdings, fees, and performance. These documents can exceed 100 pages, but an AI assistant can distill the key points, saving you valuable time.
Additionally, AI can aid in brainstorming investment ideas. If traditional stock screeners seem cumbersome, you can ask AI tools to suggest ETFs that match specific criteria, such as clean energy ETFs that pay dividends. However, it’s important to remember that AI tools are not financial advisors and may not always identify the best investments for your unique financial situation.
For some, “investing with AI” means using AI for research and idea generation. For others, it involves entrusting an AI-powered ETF to manage their investments. These ETFs utilize AI algorithms to select and trade stocks, typically with some human oversight.
What is an AI-powered ETF?
An AI-powered ETF is an exchange-traded fund managed by AI algorithms that select and trade stocks. Human managers often monitor the AI’s decisions to ensure optimal performance. Some AI-powered ETFs, like the Amplify AI-Powered Equity ETF (AIEQ), can choose a diverse range of stocks. Others, such as the WisdomTree U.S. AI Enhanced Value Fund (AIVL), focus on specific types of stocks, such as undervalued ones.
Top 8 AI-Powered ETFs as of June 2024
Here are the eight best-performing AI-powered ETFs listed on U.S. exchanges, ranked by their year-to-date performance according to VettaFi:
| Ticker | Fund Name | Performance (YTD) |
| AMOM | QRAFT AI Enhanced U.S. Large Cap Momentum ETF | 22.03% |
| BUZZ | VanEck Social Sentiment ETF | 14.50% |
| NEWZ | StockSnips AI-Powered Sentiment US All Cap ETF | 5.95% |
| AIVL | WisdomTree U.S. AI Enhanced Value Fund | 4.80% |
| AIVI | WisdomTree International AI Enhanced Value Fund | 2.00% |
| AIEQ | Amplify AI-Powered Equity ETF | 1.02% |
| OAIA | Teucrium AiLA Long-Short Agriculture Strategy ETF | -2.17% |
| OAIB | Teucrium AiLA Long/Short Base Metals Strategy ETF | -9.29% |
Challenges of Investing in AI
While AI chatbots like ChatGPT and Claude excel at text interpretation and generation, they struggle with mathematical tasks. For example, generating an exact number of items in an image can be challenging for these AIs. This limitation is crucial for investors to consider, as it underscores the importance of double-checking any numerical information provided by AI tools. Investors should avoid relying on AI for precise calculations or market predictions.
Despite the rapid advancements in AI technology, the performance of AI-powered ETFs is mixed, with fewer than half outperforming the S&P 500 index this year. However, as AI continues to evolve, its effectiveness in managing ETFs may improve. Whether AI-powered ETFs will consistently outperform traditional index funds remains to be seen.
