EXCLUSIVE: Investing In AI? Diversify 'Beyond The Likes Of NVIDIA' Says WisdomTree's CIO
In an exclusive interview with Benzinga, Jeremy Schwartz, Global Chief Investment Officer at WisdomTree, shared his insights on sectors and themes that are currently capturing the firm's attention.
As we navigate through the first half of 2024, he pointed to one area that stands out prominently: artificial intelligence (AI) and its transformative potential across various industries.
AI: The Game Changer For 2024
Schwartz highlighted that global corporations are investing heavily in computing infrastructure, with over $100 billion being allocated annually.
“We are also observing the emergence of superior chatbots and "CoPilots" that optimize existing software as well as conversations about how AI has the potential to increase productivity across nearly every industry,” said Schwartz.
These advancements underscore AI’s potential to boost productivity across nearly every sector, a trend that investors cannot afford to overlook.
Thematic ETFs: Diversified Exposure To AI
To capture alpha from AI’s potential, Schwartz advocates that “investors can get diverse exposure to AI, beyond the likes of Nvidia Corp (NASDAQ:NVDA) that so many others are focusing on.”
In this regard, WisdomTree's approach to capitalizing on the AI revolution is through thematic ETFs, particularly the WisdomTree Artificial Intelligence and Innovation Fund (BATS:WTAI). WTAI provides investors with diverse exposure to the broader AI landscape. The fund’s strategy seeks to ensure that investors are well-positioned to benefit from various facets of AI innovation.
The WTAI ETF is currently invested in 80 stocks, more diversified than the FactSet Segment average of 63. Also, it has its top 10 stocks commanding 22.18% of its portfolio vs. a segment average of 40.30%.
These include: ARM Holdings PLC (NASDAQ:ARM) – 2.79%, Meta Platforms Inc (NASDAQ:META) -2.50%, Nvidia – 2.43%, Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) – 2.29%, Qualcomm Inc (NASDAQ:QCOM) – 2.27%, Micron Technology, Inc. (NASDAQ:MU) – 2.10%, ASML Holding NV (NASDAQ:ASML) – 1.99%, Taiwan Semiconductor Manufacturing Co., Ltd (NASDAQ:TSM) – 1.97%, CrowdStrike Holdings (NASDAQ:CRWD) – 1.96%, Inc. and Teradyne, Inc. (NASDAQ:TER) – 1.87%.
We looked at some other funds offering similar exposure and their performances over the past year:
| Fund | Ticker | AUM | Expense Ratio | 1YR Perf. | YTD Perf. |
| WisdomTree Artificial Intelligence and Innovation Fund ETF | WTAI | $234.37M | 0.45% | 20.22% | -1.74% |
| Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares ETF | UBOT | $40.47M | 1.38% | 31.91% | 17.24% |
| Global X Robotics & Artificial Intelligence ETF | BOTZ | $2.77B | 0.68% | 22.01% | 10.88% |
| Robo Global® Artificial Intelligence ETF | THNQ | $183.60M | 0.68% | 38.86% | 7.27% |
| TrueShares Technology, AI and Deep Learning ETF | LRNZ | $40.98M | 0.69% | 37.65% | 0.18% |
| ProShares MSCI Transformational Changes ETF | ANEW | $8.42M | 0.45% | 21.51% | 10.07% |
The Next Big Thing In AI
Schwartz emphasized that the most significant development in 2024 could be the integration of AI into everyday devices such as smartphones and laptops. This integration is expected to become more prevalent in the latter half of the year, marking a pivotal shift in how AI is utilized in daily life.
According to Schwartz, “AI as a theme has already been top of mind for decades”, making it “difficult to predict exactly where the ‘AI hype’ might go next.”
Given this uncertainty, Schwartz advocates for a holistic approach to AI investment. By investing in a broad-based fund like WTAI, investors increase their chances of capturing the next significant AI development, whatever it may be.
For investors looking to ride the AI wave, WisdomTree's thematic ETFs provide a compelling option. Per Schwartz, WisdomTree advocates for a “holistic, broad approach to AI.” They believe that staying adaptable and open to the myriad possibilities is key to success in the rapidly evolving field of AI.
When looking for ways to getting exposure to investing in AI – a broad-based fund invested in AI stocks, could offer strategic advantage, ensuring that investors are not only part of today's AI revolution but are also poised to benefit from tomorrow's breakthroughs.
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Image generated using artificial intelligence via Midjourney.