Artificial Intelligence (AI) ETFs to watch in 2025

Artificial Intelligence (AI) is changing the world as we know it. From voice assistants like Siri to smart appliances, AI is increasingly becoming a part of our daily lives. The tech behind AI is evolving fast, and it's also making huge impacts in areas like healthcare, finance, entertainment, and transportation.

For example, in finance, AI is helping detect fraud by analysing transaction patterns in real-time. In entertainment, streaming services like Spotify use AI to create playlists that match your mood and preferences. And, of course, in transportation, self-driving cars are becoming more common.

Some of the biggest companies in the world, including Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla - known as the "Magnificent 7" - are investing billions into AI research and development. 

AI stocks, including those that make up the Magnificent 7, haven't been immune to market volatility, particularly with recent fluctuations in tech stock prices and macroeconomic factors such as interest rates. However, despite this volatility, the growth potential of AI remains strong. The global AI market, estimated to be worth $279 billion in 2024, is projected to reach $1.8 trillion by 2030, according to Grand View Research.

So, how can investors get a slice of the AI action? One option is to invest in AI exchange-traded funds (ETFs). Let's take a look at what you need to know before investing.

How you can invest in AI with ETFs

If you want to invest in AI without picking individual stocks, ETFs can be a great way to go. There are several ways you can use ETFs to get exposure to AI. For example, you could choose an AI-specific ETF that focuses on companies directly involved in AI. If you're more interested in the industries powering AI, such as semiconductors or robotics, there are ETFs that target those areas. You could also go for an ETF that tracks big names such as Amazon and Meta, who are investing heavily in AI. And if you want something broader, an ETF with a technology focus can give you a slice of both AI companies and other tech firms that could benefit from AI in the future.

The advantages of using ETFs to invest in AI

Investing in AI through ETFs has several benefits, including:

• Diversification: AI ETFs give you exposure to a wide range of companies across various industries, which can help spread your risk.
   
• Growth potential: AI is a rapidly growing field, and investing in an AI ETF gives you access to this booming market.
   
• Lower costs: ETFs generally have lower management fees than actively managed funds, making them a more affordable way to gain exposure to AI.
   
• Convenience: ETFs are as easy to buy and sell as stocks, offering a simple way to invest in AI without having to pick individual companies.

The risks of investing in AI ETFs

Like any investment, AI ETFs come with risks. Here are some key ones to consider:

• Volatility: AI stocks can be volatile, especially since they're affected by things like tech changes, regulations, and market trends. We've seen this with President Trump's trade tariffs, which caused some uncertainty and fluctuations in stock prices.
   
• Concentration risk: Many AI ETFs have significant exposure to a few big tech companies, such as Amazon, Nvidia, or Alphabet, so there's a chance you're too exposed to a small group of companies. If these companies face a downturn, your investment could take a hit.
   
• Risk of failure: Not all AI companies will succeed or become profitable. Since AI is changing so fast, there's always a chance that new technologies or competitors could shake things up, making today's big players less relevant or even outdated.

What to consider before investing in AI ETFs

AI ETFs aren't for everyone. While they have the potential to deliver strong returns, they also come with more risk compared to broad-based ETFs. That's why diversification is key. If you're thinking about adding AI ETFs for some targeted exposure, just make sure they don't take up too much of your portfolio.

It's important to think about your risk tolerance, investment timeline, and how AI ETFs fit into your overall investment strategy. 

5 AI ETFs to watch

Right now, there are only a handful of ETFs on the ASX that let you tap into AI - there are a lot more options in the US.

Let's check out five of the main ones you can buy on the ASX. You'll notice four of the five are from the one provider - Global X - while the fifth is from Betashares.  Keep in mind these aren't recommendations. It's also worth noting that even though these five ETFs are listed on the ASX, most invest in international companies.

Global X Artificial Intelligence ETF (ASX: GXAI)

Management fee: 0.57%p.a.
1-year return: Nav
Top 5 holdings: Tencent, Samsung, Alibaba, Netflix, Cisco Systems

The Global X Artificial Intelligence ETF (ASX: GXAI) is the newest AI ETF on the block, having launched on 8 April 2024. With roughly $65 million in funds under management it's the smallest of the ETFs featured here - no real surprise, given it's the freshest out of the gate. 

GXAI invests in companies that could benefit from the ongoing development and use of AI technology in their products and services,  as well as in those that make the hardware powering AI and big data analysis.

The ETF currently has 85 holdings in the portfolio, with a strong tilt towards the US (66%). The next biggest country allocation is China at 10.1%.

There's also a heavy emphasis on the information technology sector, which makes up 65.7% of the portfolio.

Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

Management fee: 0.57%p.a.
1-year return: -7.19%
5-year return: 9.14%p.a.
Top 5 holdings: Keyence, ABB Group, NVIDIA, Intuitive Surgical, Fanuc

The Betashares Global Robotics And Artificial Intelligence ETF (ASX: RBTZ) has been around since September 2018 and currently has about $258 million in funds under management

RBTZ invests in companies involved in industrial robotics and automation, non-industrial robots, artificial intelligence and unmanned vehicles and drones.

The ETF holds 49 stocks from around the globe, with its top five holdings accounting for around 42% of the total portfolio. Geographically, the fund is heavily weighted towards the United States (42.2%) and Japan (32.1%), reflecting the strong presence of robotics and AI leaders in these regions.

Global X ROBO Global Robotics & Automation ETF (ASX: ROBO) 

Management fee: 0.69%p.a.
1-year return: -9.09%
5-year return: 8.64%p.a.
Top 5 holdings: Intuitive Surgical, Yokogawa Electric, Samsara Inc., Rockwell Automation, Daifuku Co

Launched in September 2017, the Global X ROBO Global Robotics & Automation ETF (ASX: ROBO) is the "oldest" ETF on this list and currently manages about $208 million in assets.

ROBO invests in companies that could benefit from the growing adoption and use of robotics and AI - including those working on industrial robotics and automation, non-industrial robots, and autonomous vehicles. 

The ETF holds 74 companies, and interestingly, its top holding, Intuitive Surgical, makes up just 2.07% of the portfolio. Most holdings sit between 1% and 2%.

Industrials (49.9%) and Information Technology (39.8%) are the biggest sector weightings, while the US (42%) and Japan (21.7%) are the most heavily represented countries.

Global X Semiconductor ETF (ASX: SEMI)

Management fee: 0.45%p.a.
1-year return: -8.85%
3-year return: 16.10%p.a. 
Top 5 holdings: ASML Holding, TSMC, NVIDIA, Broadcom Inc., Qualcomm

The Global X Semiconductor ETF (ASX: SEMI) is just shy of four years old, having launched in August 2021, and currently manages around $278 million in funds.

As the name suggests, SEMI focuses on companies set to benefit from the growing use of tech-enabled devices that rely on semiconductors. This includes the development and manufacturing of semiconductors.

The ETF holds 30 companies, with the top five making up about 45% of the portfolio. Most of the investment is in the information technology sector (98.7%), with a small portion held in cash (1.3%).

Like many of the ETFs covered here, there's a strong US weighting (62.1%). The US is followed by the Netherlands (13%) and Taiwan (12.6%) are the next closest.

Global X FANG ETF (ASX: FANG)

Management fee: 0.35%p.a.
1-year return: 17.22%
5-year return: 29.85%p.a.
Top 5 holdings: Microsoft, Netflix, Alphabet, Meta, Amazon

With $939 million in funds under management, the Global X FANG ETF (ASX: FANG) is by far the biggest ETF on the list. 

Launched in February 2020, FANG is a tech-focused ETF that gives investors exposure to six of the "Magnificent 7" stocks: Apple, Microsoft, Alphabet (Google's parent), Amazon, Nvidia, and Meta Platforms. The only one missing is Tesla.

The ETF only invests in 10 US-listed companies, so there isn't a lot of diversification. The investments fall into three main sectors: information technology (58.8%), communication services (31%) and consumer discretionary (10.1%).

Note: Returns and funds under management are for the period ending 31 March 2025 and were sourced from the ASX. Fees and top holdings were sourced from the website of each individual ETF provider on 9 April 2025. Keep in mind that past performance is not an indicator of future returns.