The Tech and AI Play: Still a Good Bet?
Let’s cut to the chase. Investors, you might want to keep your chips on the tech and AI table. Todd Sohn of Strategas and Dave Nadig from VettaFi seem to think so. They’re betting on a second winning half for technology and artificial intelligence.
The ETFs to Watch
Sohn has his eye on the Roundhill Generative AI and Technology ETF (CHAT). It’s actively managed and, according to Sohn, it’s the way to go if you’re looking to gauge the real demand for AI. CHAT’s performance isn’t too shabby either, with a 10% increase this year.
But what if you’re already knee-deep in tech and want to diversify? Sohn suggests the Global X Robotics & Artificial Intelligence ETF (BOTZ). It’s a good way to introduce more industrials into your portfolio, and it’s up by a whopping 37% this year.
The Long-Term Impact of AI
Nadig, the financial futurist at VettaFi, agrees that AI exposure has its perks. But he warns that the upside has its limits. Sure, AI will have a long-term positive effect on GDP, but picking the public companies that will reap the most benefits? That’s a tough call.
He sees the biggest gains in industrials, robotics, and automation. But he also warns against getting too caught up in the tech hype.
Broadening the Market
Both Nadig and Sohn also have some ETF recommendations for those who believe the market is going to broaden out to include sectors beyond technology.
Sohn suggests the Invesco S&P 500 Equal Weight ETF (RSP) and the Vanguard Extended Market Index Fund (VXF). Nadig, on the other hand, recommends the JPMorgan Equity Premium Income ETF (JEPI). All three are generating positive returns this year.
Nadig advises playing a bit defensive for the rest of the year instead of trying to chase tech. He believes that JEPI, extended market, or equal weight exposure is a great way to get back in if you’ve missed the tech rally so far this year.
