AI and Robotics ETFs: The Future of Investing in 2023

Investors are always looking for new opportunities to invest in emerging technologies, and 2023 seems to be the year for AI and robotics. A recent survey conducted by Brown Brothers Harriman reveals that 56% of professional investors plan to add AI- and robotics-focused ETF strategies to their portfolios this year. This figure has increased from 46% in 2022, indicating a growing interest in the field.

The popularity of artificial intelligence-powered chatbots like ChatGPT has caught the attention of exchange-traded fund investors looking to invest in the space. AI- and robotics-focused ETFs have beaten all other thematic strategies, except for internet and technology, in terms of popularity. This is a significant shift from 2022 when AI and Robotics were behind ESG and digital asset-themed ETFs.

Rally in AI Stocks

The recent rally in AI stocks has super-charged investor interest in the industry. ETFs tracking robotics and AI have pulled in roughly $105 million in March, while other thematic strategies like clean energy, electric cars, and cloud computing saw outflows, according to data compiled by Bloomberg Intelligence.

Global X Robotics & Artificial Intelligence ETF

The $1.7 billion Global X Robotics & Artificial Intelligence ETF (ticker: BOTZ) has led the inflows with about $121 million so far this year. The fund is up 24% year to date, making it a popular choice for investors seeking exposure to AI and robotics.

Investors’ Interest in Speculative Assets

The survey reveals that despite uncertainty over the Federal Reserve’s next monetary policy move and its impact on risk assets, investors are still keen to load up on certain kinds of speculative assets. This is evident from the fact that 48% of investors plan to add cryptocurrency and digital asset-themed ETFs in 2023, despite the crypto winter.

Bitcoin’s Rally

Bitcoin, the world’s largest cryptocurrency based on market value, has rallied 70% in 2023 as investors brush off a regulatory crackdown and bet on the digital asset’s independence from the traditional financial system. However, AI- and robotics-focused ETFs seem to be outpacing cryptocurrencies as the investment of choice for many professional investors.

Long-term Potential of AI

Some investors believe that AI can be a deflationary force in the long-term because it will drive down costs and improve efficiencies. Ankur Crawford, a portfolio manager at Fred Alger Management, is one of these investors. According to Crawford, “initially it might actually be inflationary… there’s a cost associated with it to get it up and running. But later, I do think that’s a deflationary force.”

Conclusion

AI and robotics are the future of investing, and professional investors are taking note. With a growing interest in the field and a recent rally in AI stocks, AI- and robotics-focused ETFs are becoming increasingly popular. The Global X Robotics & Artificial Intelligence ETF is leading the inflows, and investors are still keen to invest in speculative assets like cryptocurrencies. The potential for AI to drive down costs and improve efficiencies makes it a compelling long-term investment opportunity.