AI-Themed ETFs: A Mixed Bag
As of April 15, 2026, there are 47 exchange-traded funds (ETFs) that either include “AI” or “artificial intelligence” in their titles or have been tagged by Morningstar under the theme of artificial intelligence.
These ETFs take different approaches—some focus directly on large-scale language models, while others invest in the infrastructure, hardware, and data that enable chatbots and agents. There are even some that use AI to select securities. Here’s a rundown of those 47 AI-related ETFs.
Interestingly, the average AI-themed ETF is about three years old, with the oldest being the Global AI ETF. A good number of these funds have emerged since 2022.
Despite their relative newness, these ETFs have gained traction among investors. There’s strong demand, with total net assets reaching around $25 billion. In the last year alone, they’ve collectively seen over $10 billion in net inflows, with $7.7 billion just in the second half of last year. Since their inception in 2016, these funds have attracted nearly $19 billion in net inflows.
Performance: It’s Complicated
So, how have these ETFs done? Well, it’s a bit of a mixed picture. On one hand, the average AI thematic ETF has outperformed the S&P 500 since 2016. However, it hasn’t quite managed to surpass the Nasdaq 100 index during that same timeframe.
This average return tends to hide significant fluctuations within the performance of the underlying AI-themed ETFs. The difference in rolling one-year returns can be quite stark across these funds.
On average, there’s a 17 percentage point gap between the top performers and the underachievers—a gap substantial enough to raise eyebrows. This difference is roughly three times larger than what you’d see among large blend funds and even greater than the disparity observed in Morningstar’s Technology fund peer group.
Understanding the “AI Theme”
So, what’s driving this significant performance variability? While they all fall under the AI umbrella and invest in tech-centric resources, these ETFs are hardly identical.
Consider Global X Artificial Intelligence & Technology (AIQ), the largest AI-themed ETF in terms of assets. It has investments in over 80 different stocks, meaning it’s not overly reliant on a handful of top performers. In contrast, the TrueShares Tech, AI, and Deep Learning ETF is more concentrated, with around 20 stocks, which means it relies heavily on the top names dominating its portfolio.
These differences likely explain the contrasting returns of these two ETFs since August 2022. The key takeaway here isn’t just about whether one ETF performs better than another with similar names, but instead, it’s crucial to recognize that such differences significantly impact their outcomes.
Lessons Learned
Reconsider Thematic Investing
I guess I should mention this upfront: I struggle to find a compelling reason for investing in AI-themed ETFs. If you have a diversified portfolio like an index fund, you’re most likely already tapping into this theme along with many others, which makes additional investments somewhat redundant and risky.
Beware the Hype
When people express desires to dive deeper into specific themes, I often wonder why they believe those themes haven’t already been accounted for in the market. I tend to think that if something catches my attention, it might already be mainstream, possibly too late for investment entry. There’s a quote from Groucho Marx that always comes to mind: “I don’t join any club that would have me as a member.”
I’ve written before about the disparity between how much average investors gain and the overall returns of thematic ETFs. A significant factor contributing to this issue seems to be investors buying high and selling low, which is something too many people do.
The Story Isn’t Over
These thematic stories are still being written. With AI, we’re witnessing mass consumer adoption, and the technology is set to drive innovation at an unprecedented level. It’s fascinating, but it leads to a bigger question: when does this story reach its conclusion? Even experts, like the head of the Frontier AI Institute, can’t predict the end.
Know What You’re Investing In
This is key. Remember, you’re not just buying a catchy theme—you’re purchasing shares in businesses expected to generate cash flow. How that cash flow looks in terms of timing and scale is uncertain. Additionally, the stocks held within these thematic strategies may evolve over time based on market dynamics.
Dig Deeper into Your Strategy
Even if you believe you’ve done your homework, it’s still essential to really understand what makes your investment approach unique. Key details, like how “AI” is defined, how diversified your ETF is, and when to buy or sell stocks, can heavily influence performance outcomes. Given the variety of ways these funds operate, you might need some sophisticated tools—or maybe just a good bit of common sense—to get it right.
What Else Is Going On?
Here’s a bit of what’s on my radar lately:
- Honoring Mark Moebius
- Morningstar’s annual paper “Prospects for Diversity” has been released
- “The Accidental Star Manager” is worth a read
- I’ve been listening to music on Spotify—check out a self-proclaimed gem.
- There’s an interesting piece about an artist named Ella that caught my eye.
Keep In Touch
Your thoughts are always appreciated. Got any feedback or topics you think I should cover? Feel free to reach out! You can also find me on Twitter if you’re interested in more of my musings.
