Investing in AI (Artificial Intelligence) for Canadians

Here are three ways you can invest in AI as a Canadian via ETFs.

Tony Dong, MSc, CETF®

Tony turned a series of 2017 marijuana stock losses into a freelance career advocating for ETF investing. He currently holds a Master’s in Risk Management from Columbia University and is a Certified ETF Advisor (CETF®). Tony is the founder of ETF Portfolio Blueprint (etfportfolioblueprint.com) and the Lead ETF Analyst for ETF Central, a partnership between Trackinsight and the NYSE. His analysis has also been featured in publications like Kiplinger, 24/7 Wall St., U.S. News & World Report, TheStreet, and Benzinga. Tony also provides independent content and marketing consulting services to various Canadian and U.S. ETF issuers. His editorial opinions for The Motley Fool remain independent and objective.

Published August 29, 2024 8:00 pm EDT

If you’re a Canadian looking to invest in artificial intelligence (AI), I highly recommend considering a thematic exchange-traded fund (ETF). Why?

The answer is straightforward: simplicity and diversification. You get a bigger basket of AI-themed companies, and you can do so via just one ticker.

There are quite a few AI-focused ETFs available to Canadian investors, each offering a unique approach to capturing the potential of this dynamic sector. Here are my top three picks and what makes each one stand out.

Passive indexing

If you prefer a hands-off approach where your AI stocks are selected according to a clear, rules-based methodology, consider an index ETF.

One standout option is the Global X Artificial Intelligence & Technology Index ETF (TSX:AIGO).

This ETF passively tracks the Indxx Artificial Intelligence & Big Data Index for a 0.49% management fee. The top holdings of the ETF, reflecting a diverse array of AI innovators, are detailed below:

Active management

If you prefer to have a team of experts vetting and selecting your AI stocks, a passive index ETF won’t suffice. For this level of oversight, an actively managed ETF is the way to go.

A prime choice in this category is the CI Global Artificial Intelligence ETF (TSX:CIAI).

Contrary to what you might expect, active management doesn’t always have to come with a high price tag. CIAI is surprisingly affordable with a management fee of just 0.2%, which is even lower than that of some passive ETFs like AIGO. Here’s a look at its top holdings:

AI picking stocks

A truly unique Canadian AI ETF that stands out to me is the Evolve Artificial Intelligence Fund (TSX:ARTI).

What sets it apart? It utilizes a large language model known as Boosted.ai to assist in its portfolio selection. This approach is both innovative and quite meta, considering it’s AI helping to pick AI-focused investments.

However, this cutting-edge technology does come at a cost. ARTI charges a management fee of 0.60%, which is a bit steeper compared to other options. Here’s a look at its current holdings: