9 Best-Performing AI ETFs for November 2023

Artificial intelligence (AI) is one of the biggest trends of the 2020s — accounting and consulting firm PwC wrote that it could contribute $15.7 trillion to the global economy by the end of this decade, in a report first published in 2017 and last modified in 2023.

AI stocks provide one way for investors to try to profit from the growth of AI technology, but funds are also an option. Below, we’re unpacking AI exchange-traded funds (ETFs), and looking at the top nine AI ETFs by year-to-date performance.

AI ETFs are publicly-traded baskets of AI stocks — which, in turn, are shares of publicly-traded companies that are involved with AI development in some way.

Some AI companies, like Microsoft (MSFT), are involved in the development of AI software — for example, large language models such as ChatGPT. Others, like NVIDIA (NVDA), produce hardware that is important to industrial AI, such as graphics processing units.

Below are the nine top-performing ETFs in the VettaFi ETF database that have substantial exposure to AI stocks, as ranked by year-to-date performance.

Source: VettaFi. Data is current as of Nov. 2, 2023 and intended for informational purposes only, not for trading purposes.

If you take a closer look at the AI ETFs in the table above, you’ll notice that they fall into one of several categories:

• Technology ETFs: Some of the funds above, such as the iShares U.S. Technology ETF, are really just baskets of tech stocks. We’ve included them here because some of the largest companies in the technology sector —such as NVIDIA and Microsoft — are also key players in the AI industry.

• Thematic ETFs: Others, such as the Global X Artificial Intelligence & Technology ETF, are specifically focused on the theme of AI — although in practice, their holdings tend to look quite similar to those of general tech ETFs at the moment.

• “AI-enhanced” or “AI-powered” ETFs: There’s a third type of AI ETF which is not represented in the table above, but bears mentioning here: Funds, such as the QRAFT AI-Enhanced US Large Cap ETF (QRFT), that are not focused on AI stocks or even technology stocks, but simply use AI technology to inform their trading decisions.

Once you’ve opened such an account — and verified that your AI ETF of choice is available in it — then you’ll need to figure out what goals you’re looking to accomplish by investing in AI ETFs, and how they fit into your overall strategy.

AI technology has real economic potential, but if you’re investing the whole balance of your IRA into AI ETFs, then you’re literally betting your retirement on that technology’s success. Investment diversification can protect you from the risks of putting all of your eggs in one basket, while still allowing you to allocate small portions of your portfolio toward up-and-coming trends like AI.

If you’re looking to make a long-term bet on the potential of AI technology, then you may be content to just buy an AI ETF with a market order and hold it long-term.

If you’re looking to day trade AI ETFs, on the other hand — say, to take advantage of short-term market fluctuations related to the trendiness of AI stocks — then you may want to consider using limit orders to get in and out of the trade at a favorable price.