The Roundhill Generative AI & Technology ETF (NYSE Arca: CHAT) claims to be the first exchange-traded fund (ETF) that focuses on generative artificial intelligence (AI). The fund is actively managed so investors can expect to see many changes to the ETF over the years as AI development evolves and new companies become bigger players within the industry.
The fund has an expense ratio of 0.75% which is a bit high given that there are only 36 holdings in the ETF. But for investors who want an easy way to invest in AI, this could be the ETF to for you. The top three stocks in the fund should be familiar to AI investors as they include Nvidia (NASDAQ:NVDA), which makes chips that are involved in AI development; Microsoft (NASDAQ:MSFT) which has invested billions into ChatGPT; and Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), which has a chatbot of its own in Bard. Combined, those three stocks account for more than 22% of the fund's total weight. Other notable holdings include Chinese tech company Baidu (NASDAQ:BIDU) and Adobe (NASDAQ:ADBE).
This is a fairly new ETF as it only launched on May 18 of this year. Large cap stocks make up 85% of its total holdings so investors aren't going to get a whole lot of exposure to up-and-coming stocks with this ETF, at least, not for the time being. Over 70% of the stocks it holds are based in the U.S. with 23% being China, followed by 4% in Japan and just over 1% in Israel.
If you're bullish on AI, this is an ETF you may want to keep a close eye on and potentially add to your portfolio.
