Artificial intelligence-related ETFs rebounded on Monday (29 June) after a sharp sell-off at the end of last week, highlighting both the continued strength of investor interest in the theme and the volatility that can come with more concentrated exposures.
According to MarketWatch, the iShares A.I. Innovation and Tech Active ETF rose 2.9%, recovering part of its 4.5% fall on Friday. The Roundhill Generative AI & Technology ETF also gained 1.6%, after dropping 4.3% in the previous session.
The recovery came during a strong quarter for semiconductor-related ETFs, which have benefited from the continued momentum behind AI infrastructure spending. The iShares Semiconductor ETF was up 86.8% quarter to date, while the VanEck Semiconductor ETF had risen 64.8%, with both on course for record quarters.
Our view
David Batchelor, senior analyst at QuotedData, said: “The rebound in AI ETFs is a useful reminder that thematic investing can work both ways. Funds targeting artificial intelligence, semiconductors and related technologies can provide investors with simple access to a powerful long-term trend, but many of these products are far more concentrated than broad market ETFs. That means investors may be taking a sizeable bet on a relatively narrow group of companies, even where the fund name suggests a broad theme. For retail investors, the key question is not just whether they believe in AI, but how much exposure they already have to the same stocks through global equity funds, technology funds or US market trackers”.
