The S&P 500 (^GSPC) has surged 28% this year, outpacing its average annual return since 1957. The index’s strong performance is largely due to the success of trillion-dollar companies like Nvidia (NVDA), Meta Platforms, and Amazon. Investing in AI-focused ETFs can provide exposure to these leaders without requiring individual stock ownership.
The Roundhill Generative AI and Technology ETF (CHAT) holds top-performing AI stocks like Nvidia, Microsoft, Alphabet, and Meta. With a 57% return since its establishment in May 2023, the ETF is beating the S&P 500’s 47% total return over the same period. However, investors should note that the fund has high expense ratios, averaging 0.75%.
AI’s growth prospects are promising, with Goldman Sachs estimating it will contribute $7 trillion to the global economy by 2032. Morgan Stanley predicts four companies will spend a combined $300 billion on AI infrastructure in 2025, creating a significant tailwind for suppliers like Nvidia and AMD.
To maximize returns from AI-focused ETFs, investors should consider adding them to a balanced portfolio with other funds and individual stocks that don’t heavily rely on the technology. With its high concentration of top-performing stocks, the Roundhill ETF is poised for continued success as AI continues to drive growth in the tech sector.
Source: https://www.fool.com/investing/2024/12/04/1-no-brainer-ai-etf-to-buy-40-sp-500-bull-market