Investors in exchange-traded funds are taking notice of the popularity of chatbots driven by artificial intelligence, like ChatGPT, who are seeking exposure to the market.
According to a survey by Brown Brothers Harriman issued on Monday, the majority of professional investors, 56%, intend to add AI- and robotics-focused ETF strategies to their portfolios this year. This number increased from 46% in 2022. Except for internet and technology, the category outperformed all other theme approaches. That represents a sharp contrast to 2022, when AI and robotics lagged behind ESG and ETFs with a digital asset theme.
With around $121 million in inflows so far this year, the $1.7 billion Global X Robotics & Artificial Intelligence ETF (ticker: BOTZ) has taken the lead. To date, the fund has increased by 24%.
“Whether it’s AI, SPACs, or EVs, there is always a crowd that wants exposure to the “next thing,” “According to Todd Sohn, a Strategas ETF strategist. “With recency bias, they don’t want to miss the FOMO run.”
The study suggests investors are still eager to stock up on specific categories of speculative assets despite uncertainty over the Federal Reserve’s future monetary policy move and its impact on risk assets.
According to a study of 325 institutional investors, financial advisors, and fund managers focused on ETFs, the crypto winter did not deter investors from investing in cryptocurrency and digital asset-themed ETFs. Investors who still intend to add that approach in 2023 make up 48% of the total. Only 6 percentage points had been lost from the previous year.
As investors shrug off a governmental crackdown and wager that the digital asset’s independence from the established financial system may make it immune to the instability in the banking industry, Bitcoin, the largest cryptocurrency in the world by market value, has risen 70%.
Because AI will reduce costs and increase efficiencies, some investors, including Ankur Crawford, a portfolio manager at Fred Alger Management, are wagering that it can be a deflationary driver in the long run.
“At first, it may really cause inflation, “Crawford remarked. “There are expenses involved in getting it up and running. Later on though, I do believe that to be a deflationary influence.”