AI, playing technology for the second half of 2023

Second half scenario: ETF to choose your own adventure

Investors may want to stick with what’s working in the market.

ETF experts Todd Sohn and Dave Nadig of VettaFi believe that the second half is poised for the tech and artificial intelligence games.

Sohn, Strategas ETF and technical strategist, especially likes Roundhill Innovative AI and Technology ETF (CHAT).

“What I like about [CHAT] is it’s actively managed,” Sohn told to ETF” this week. “This would be my preferred route if you want to get exposure to that AI and see what the demand really is.”

CHAT has grown by more than 10% this year.

Sohn also recommends Global X Robotics & Artificial Intelligence ETF (BOTZ) for those interested in introducing more industries into their portfolio. BOTZ is up more than 37% year-to-date.

“I love [BOTZ] if you want to get away from technology because you already have exposure to technology in your portfolio. Industries also benefit,” he said.

Nadig, VettaFi’s financial futurist, also sees benefits from exposure to AI. However, he thinks the uptrend has a limit.

“AI will have a positive and lasting impact on GDP… [But] it’s very difficult to pick out the public companies that will be the big beneficiaries of that,” said Nadig. “We always run into this problem when we have great new technology… Google And Microsoft And Apple And Nvidiawhich we all probably have too much of.”

He predicts industries, robotics and automation are positioned to gain the greatest benefits.

Both Nadig and Sohn also highlight ETFs for those who believe the market will expand to include sectors beyond technology.

Sohn recommends Invesco S&P 500 Equal Weight ETF (RSP) and Vanguard Extended Market Index Fund (VXF)while Nadig suggested JPMorgan Equity Premium Income ETF (JEPI). All three are generating positive returns this year.

“Playing a little defensively for the rest of this year instead of trying to follow technology is probably the way to go,” Nadig said. “[JEPI] already a huge flow collector; it’s distributed to investors… Something like open market or equivalent weighting is a great way to try to roll back if you’ve missed that [tech] protests so far this year.”


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