5 Best AI ETFs in Canada

Artificial Intelligence, or AI for short, is a major part of technology worth hundreds of billions of dollars. With the recent release of platforms like ChatGPT, AI is exploding in the world of tech. So, it’s no surprise that many people are investing in AI ETFs in Canada. If you are interested in investing in AI, but aren’t sure where to start, going with an ETF is a good starting point. They allow you to invest in numerous companies and securities within one investment vehicle. In this article, you will find out some of the top artificial intelligence ETFs in Canada. Keep reading to learn more!

ai etf canada

What is an AI ETF in Canada?

An AI ETF in Canada is a good way for investors to trade AI based investments and avoid the problems involved with trading individual stocks. AI ETFs are a compilation of exchange-listed AI stocks and securities, which become shares that can be bought or sold on a stock exchange market. These can include AI-focused companies, robotic companies, and semiconductor makers. For example, companies like Microsoft are involved in the development of AI software, such as ChatGPT. As an investor, AI ETFs give you great exposure to several companies involved in AI development, usability and expansion.

Related Reading: Best Gold ETFs in Canada for 2023

CIBC Investor’s Line Offer

Up to $6.95 per online stock or ETF trade. Plus, there’s no minimum account balance.

How should I invest in AI?

Investing in AI has become very popular in recent years. The technology continues to evolve in the finance, healthcare, and transportation sectors, among others. Further, many companies are incorporating AI into their internal processes and external platforms. But, how can you get involved in the industry as an investor?

When choosing any investment, it’s important to consider your investment goals, the particular sector’s performance, and your risk tolerance level. Many investors can choose any of the following ways to invest in AI:

  • Exchange Traded Funds: An ETF is a collection of various stocks and other securities that individuals can buy and sell in a stock exchange market. There are several AI ETFs in Canada to choose from and some of the options will be discussed below. 
  • Venture Capital Funds: Several venture capital companies invest in small-sized enterprises interested in developing AI technology. These funds are usually characterized as high risk but high-return opportunities.
  • Leading Companies in AI Technology: Various companies like Google, Microsoft, and Amazon invest a lot of their resources into AI. These companies are some of the influential parts of AI technology and have the financial backup to continually develop each sector.
  • Crowdfunding Platforms with Inventive AI Solutions: Many small companies in Canada are highly invested in advanced AI technology. Apart from having the potential to excel, they may also carry higher growth risk. It is therefore important to properly research the company’s potential before making any investment decisions. 

CIBC Investor’s Line Offer

Up to $6.95 per online stock or ETF trade. Plus, there’s no minimum account balance.

Is there any ETF for AI?

Yes, there are various ETFs for AI in Canada. They include:

  • Horizons Big Data & Hardware Index ETF
  • Horizons Robotics and Automation Index ETF (RBOT)
  • Emerge ARK AI & Big Data ETF
  • iShares Exponential Technologies ETF (XT)
  • Global X Robotics and Artificial Intelligence ETF(BOTZ)
  • First Trust NASDAQ Artificial Intelligence ETF (ROBT)

We’ll explore these ETFs in depth in the next section. Keep reading to learn more!

Related Reading: 5 Best Tech ETFs in Canada

Which is the Best ETF for AI?

Investors who want to benefit from the AI development and expansion without the risk of choosing any individual stock option can go for any of the ETFs below.

Ticker SymbolInception DateYieldMERRisk
HBGDJune 20, 20180.71% 0.59%High
RBOTNovember 28, 20170.42%0.64%High
EAAIJuly 29, 20190%2.15%High
XTMarch 19, 20150.6%0.46%Medium
BOTZSeptember 12, 20160.21%0.69%Medium
Note: All information correct as of November 2023.

1. Horizons Big Data and Hardware Index ETF (HBGD)

The Horizons Big Data and Hardware Index ETF offers you exposure to AI using large data. This ETF has ten holdings with Galaxy Digital Holdings Ltd having the highest percentage. These holdings are divided into three different categories that include hosting/storage/data centers, semiconductors, and blockchain technologies.

While this ETF may not be original in Canada, it has done exceptionally well over the years. Investors who invested in this ETF at the time of inception will most likely have increased gains in 2023. Even though blockchain-related investments are a weak point for this ETF, they can also give it a boost in timely situations.

The Horizons Big Data and Hardware Index ETF tracks the performance of the Solactive Big Data and Hardware Index. It also has geographic exposure in various countries. The US represents the largest geographic segment compared to others like South Africa, France, and Canada.

2. Horizons Robotics and Automation Index ETF (RBOT)

Horizon is a very popular name for Canadian ETFs. It is known as the first AI ETF in Canada. The Horizons Robotics and Automation Index ETF tracks the performance of the Index Global Robotics and Artificial Intelligence Thematic Index, net expenses.

The top ten holdings of this ETF include several tech companies offering kinds of AI exposure, with NVIDIA as the highest holding. This ETF holds 44 stocks from various countries, including China, Japan, Norway, and Switzerland. With this ETF, the exposure level between AI and automation is quite balanced, ensuring that each technology complements the success of the other.

Related Reading: 5 Best Money Market ETFs in Canada

3. Emerge ARK AI and Big Data ETF (EAAI)

Emerge ARK AI and Big Data ETF has both AI and Big Data companies in their portfolio. It aims at ensuring long-term growth of capital in global equity securities of companies that focus on artificial intelligence and big data.

This ETF is small as it has just about $5.5 million under Assets Under Management (AUM). It has only one Canadian company amongst the top ten companies in the fund. However, the holdings for this fund are different, with options ranging from car firms like Tesla to gaming companies like Unity Software and Roblox Corporation. 

The performance of the ETF hasn’t been the best over the years, but 2023 was the most profitable. This makes the ETF a better option as it also includes a wide range of AI stocks. However, because it is very small and with a high MER, it is managed under a relatively unknown firm. Under such an operation, there may be an increase in the risk factor of the investment. 

4. iShares Exponential Technologies ETF (XT)

This iShares Exponential Technologies ETF is not only designed for the AI industry but for any technology that may interrupt existing industries. Some of these industries include cryptocurrencies, SaaS, Fintech, and Social Media. 

XT has about 197 stocks from various other countries, including Germany, China, and Japan. It tracks the investment results of an index made of emerging market companies that use rampant growing technologies. Some of the major holdings in this ETF include NVIDIA, MongoDB, Palantir, Coinbase Global, and Meta Platforms.

CIBC Investor’s Line Offer

Up to $6.95 per online stock or ETF trade. Plus, there’s no minimum account balance.

5. Global X Robotics and Artificial Intelligence ETF (BOTZ)

The Global X Robotics and Artificial Intelligence ETF is one of the major AI ETFs, recording up to $2 billion in assets under management. This ETF is best for investors looking to target companies outside of the technology sector that position and pioneer AI and automation solutions. 

BOTZ trades on the NASDAQ exchange in the US but Canadians can purchase the ETF using US dollars (USD). It has a very detailed portfolio with just about 43 AI stocks from various countries. The top holdings for this AI ETF include NVIDIA, Kenyencs Corp, ABB LTD-REG, and Intuitive Surgical. 

Related Reading: Norbert’s Gambit: How It Works

What is the largest ETF for AI?

The largest ETF for AI that provides the greatest exposure to AI stocks in terms of assets under management is the Global X Robotics and Artificial Intelligence ETF (BOTZ). 

What is the best AI stock to buy right now?

The best-performing AI stock to buy today is Advanced Micro Devices, especially because of its continuous AI expansion in 2023. AMD will develop the technology required to challenge NVIDIA’s ascendency in 2024. Well-known graphics chip maker, NVIDIA Corp, is known for analyzing various major computing opportunities. These chips are used to request workloads that applications such as large language models may need. AMD has high potential in AI in the future, and its stock is a great option for NVIDIA’s AI chip launch.

Is AI a good investment in 2023?

With the rapid growth of the AI market, a lot of investors can profit from investing in an AI ETF in Canada. Artificial intelligence may still be developing, but it is most likely going to be ubiquitous around the world. It has great potential to drive faster productivity growth and gains for investors in 2023.

Investing in artificial intelligence can be quite confusing for startups or retail investors as you may face rapid fluctuations. It may require a lot of time and effort to research these companies. If you want to take a further step to investing in AI ETFs in Canada, ensure you understand the risks involved. Investing in AI is very rewarding for someone knowledgeable taking calculated risks.

Read More: Tax Efficient ETFs in Canada

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