Artificial intelligence represents one of the biggest technological advances ever, with a wide array of applications — from drawing pictures to driving cars. And asset managers have been quick to develop exchange traded funds that can capitalise on this potential.
But investors considering an allocation to these funds face a bewildering range of choices, including active and passive ETFs, concentrated and diversified portfolios, and strategies that give very different exposures to US tech giants versus their newer rivals.
Richard Dell, head of equity manager research at investment consultancy Mercer, says that, even though there is a strong consensus that AI will bring significant productivity improvements across multiple sectors, identifying the winning companies requires a long-term investment horizon.