Top AI Funds and ETFs to Watch in 2025
As artificial intelligence continues to reshape industries, many investors are looking for efficient ways to gain exposure to the AI sector. One of the most effective approaches is through AI-focused funds and exchange-traded funds (ETFs). These instruments offer diversification, lower risk, and access to high-growth AI companies. Here are the top AI funds and ETFs to consider in 2025.
1. AI-Focused ETFs – Broad Exposure to the Sector
AI ETFs bundle multiple companies driving innovation in artificial intelligence, from semiconductors to software. Notable examples include the Global X Robotics & Artificial Intelligence ETF (BOTZ) and the iShares Robotics and AI ETF (IRBO). These funds give retail and institutional investors an accessible way to invest in AI trends.
2. Actively Managed AI Funds – Expert-Led Strategies
Actively managed funds rely on portfolio managers to pick stocks with strong AI potential. Funds such as the T. Rowe Price Global Technology Fund focus on long-term tech growth with an emphasis on AI innovation. These options may come with higher fees but often offer better adaptability to market changes.
3. Thematic Tech Funds – Broader Innovation Exposure
Thematic funds invest in a range of transformative technologies, including AI, cloud computing, and big data. Funds like the ARK Innovation ETF (ARKK) offer exposure to AI within a broader disruptive tech portfolio. According to Morningstar, these funds remain popular among long-term growth investors despite market volatility.
4. Geographic Focus – Global Opportunities in AI
Investors can also explore AI growth beyond the U.S. Markets in Asia and Europe are producing AI leaders in hardware and algorithm development. International AI funds provide exposure to these opportunities and help diversify geographically.
5. Risk and Return Considerations
AI-related ETFs and funds can be volatile, especially those heavily weighted toward emerging technologies. It's important to review historical performance, underlying holdings, and management strategy before investing. Diversification across sectors and geographies can mitigate some risks.
Investment Tips for AI Funds and ETFs in 2025
- Compare Expense Ratios: Lower-cost ETFs may outperform over time due to compounding savings.
- Review Fund Holdings: Check if the fund includes leaders in AI innovation like NVIDIA, Microsoft, or Alphabet.
- Track Fund Performance: Use historical data and analyst ratings to evaluate risk-adjusted returns.
- Stay Updated: Follow financial news for insights on AI developments that affect fund performance.
Conclusion
Whether you're a retail investor or an institutional player, AI-focused funds and ETFs offer a smart way to tap into the future of technology. By investing in diversified, professionally managed portfolios, you can gain exposure to AI growth without taking on the risk of picking individual stocks. With careful research and a strategic approach, AI investing in 2025 holds significant potential.