Though it's far from a new approach, many exchange-traded funds (ETFs) aiming to provide exposure to the much-hyped artificial intelligence (AI) space tend to lean fairly heavily on a small number of big names. NVIDIA Corp. (NASDAQ: NVDA), for example, is the single largest holding of the popular Global X Robotics & Artificial Intelligence ETF (NASDAQ: BOTZ) fund, representing nearly 12% of the entire portfolio. Even among broad-based tech ETFs like the iShares U.S. Technology ETF (NYSEARCA: IYW), a company like NVIDIA represents about 17% of the fund's invested assets.
Some investors may seek out ETFs like these because they are weighted toward a handful of extremely popular names in the AI space. However, in a fast-growing and ever-shifting industry like AI, a wide net may better help investors to capture gains from lesser-known or up-and-coming companies. Fortunately, there are a number of AI-centered ETFs that focus on a broader set of names covering different aspects of the AI space.
