Investors may want to stick with what works in the market.
ETF experts Todd Sohn and Dave Nadig of VettaFi believe a second winning half is ahead for technology and artificial intelligence.
Sohn, Strategas’ ETF and technical strategist, particularly likes Roundhill Generative AI and Technology ETF (CHAT).
“What I like about (CHAT) is that it’s actively managed,” Sohn told CNBC’s “ETF Edge” this week. “This would be my preferred route if you want to get that AI exposure and see how real the demand is.”
CHAT is up more than 10% so far this year.
Sohn also recommends Global X Robotics & Artificial Intelligence ETF (BOTZ) for those interested in introducing more industrial products to their portfolio. BOTZ is up more than 37% year to date.
“I like (BOTZ) if you want to get away from technology because you already have technology exposure in your portfolio. The industry benefits too,” he said.
Nadig, VettaFi’s financial futurist, also sees benefits in exposure to AI. But he suggested that the benefit has limits.
“AI will have a significant positive impact on GDP in the long run… (But) it is very difficult to choose public companies that will be the biggest beneficiaries of that,” said Nadig. “We come across this all the time when we have cool new technology… and we end up buying Google And Microsoft And Apple And Nvidiawhich we probably all already own too much of.”
He predicted that industry, robotics and automation will yield the biggest gains.
Both Nadig and Sohn also highlighted ETFs for those who believe the market will expand into sectors beyond technology.
Sohn recommended the Invesco S&P 500 Equal Weight ETF (RSP) and the Vanguard Extended Market Index Fund (VXF)while Nadig the JPMorgan Equity Premium Income ETF (JEPI). All three are generating positive returns this year.
“Playing a little defensively for the rest of this year rather than chasing technology is probably the way to go,” said Nadig. “(JEPI) has been a huge power collector; it’s delivered for investors… Something like an expanded market or equal weight exposure is a great way to try and get a leg back if you’ve missed that (technical) rally so far this year.”
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