Artificial Intelligence ETF Holders Are 37% Richer: But Regulators See 'Emerging Threat' To Stability
U.S. Secretary of the Treasury Janet Yellen, who is also the Financial Stability Oversight Council (FSOC) Chair, called AI an "emerging threat" to financial stability. Yellen sees a need to curb the technology's potential market risks.
The increasing reliance on this emerging technology is considered a “vulnerability” and Yellen believes existing regulations should be used to curb the potential market risks that financial markets might become exposed to eventually.
Related: Artificial Intelligence Pegged As Financial Risk By US Regulators
AI Driving Stocks Higher
Meanwhile, artificial intelligence (AI) became a household name. It has been driving many technology stocks this year to new highs: NVIDIA Corp (NASDAQ:NVDA), Advanced Micro Devices Inc. (NASDAQ:AMD), Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL), Microsoft Corp (NASDAQ:MSFT) and Broadcom Inc (NASDAQ:AVGO), to name a few.
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- AMD Is Set To Challenge Nvidia’s Dominance And Amazon Is Going After Microsoft’s Early-Start AI Advantage
- Analyst Confidence Skyrockets in Broadcom: A Glimpse into Its Lucrative AI Future?
Artificial Intelligence ETF Holders Are Richer By 37%
ETFs specifically investing in artificial intelligence have also had a good run this year. Investors in the earliest and largest artificial intelligence ETF, the Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) are richer by 37% this year. This surge was driven by performances of Nvidia and Intuitive Surgical Inc (NASDAQ:ISRG); which together account for about 25% of the ETF’s portfolio. The ETF was launched in September 2016 and has accumulated about $2.4 billion assets under management.
3 other AI ETFs have returned more than 37% YTD to investors:
Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares ETF (NYSE:UBOT) is a leveraged AI ETF, launched in April 2018. The ETF has $30 million in AUM and was up over 68% YTD.
Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ) was launched in May 2018. The fund has $842 million in AUM and is up about 53% YTD.
WisdomTree Trust WisdomTree Artificial Intelligence and Innovation Fund (BATS:WTAI) was launched in December 2021 and has about $190 million in AUM. The ETF is up over 45% YTD.
There are 3 other AI ETFs that are worth a mention:
Exchange Traded Concepts Trust ROBO Global Robotics and Automation Index ETF (NYSE:ROBO) has $1.32 billion in AUM. The fund was up over 20% YTD. The fund launched in October 2013.
iShares Robotics and Artificial Intelligence Multisector ETF (NYSE:IRBO), a June 2018 launch has accumulated $569 million in assets already. The ETF was up 33% YTD.
First Trust Nasdaq Artificial Intelligence and Robotics ETF (NASDAQ:ROBT) with $472 million in AUM, was up over 25% YTD. The fund was launched in February 2018.
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