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Could This Be the Safest Way to Invest in AI?
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Published in Stocks and Investing on Thursday, December 4th 2025 at 4:16 GMT by The Motley Fool- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Could this Be the Safest Way to Invest in AI?
An In‑Depth Summary of The Motley Fool’s 12‑April‑2025 Analysis
The AI boom has become one of the defining narratives of the 2020s. From language models that can write essays to autonomous vehicles that are already on the road, artificial intelligence promises to reshape nearly every industry. For the average investor, however, the question remains: how can you tap into this growth while still protecting your portfolio from the volatility that often accompanies hype‑driven sectors? The Motley Fool’s recent article, “Could this be the safest way to invest in AI?” tackles that exact dilemma by exploring a specific investment vehicle that seeks to blend exposure to high‑growth AI companies with the diversification and risk management typical of a well‑constructed portfolio.
1. The “Safe” Investment: A Broad‑Based AI ETF
The centerpiece of the article is an exchange‑traded fund (ETF) that focuses on AI and related technologies while maintaining a diversified, global footprint. Although the piece does not give the ETF a name in the main text, it references a link to the fund’s official prospectus and to its holdings list, which we’ll call the Global AI & Robotics ETF (GARE for short).
The ETF pulls its assets from a mix of large‑cap leaders—such as NVIDIA, Alphabet, and Microsoft—and mid‑cap innovators like UiPath and Palantir. It also includes international exposure, with holdings in companies from China (by way of indirect exposure through ETFs tracking Chinese tech indices), Europe, and emerging markets. The result is a portfolio that covers the entire spectrum of AI development, from hardware (semiconductors) and software (cloud AI services) to applications in robotics and automation.
2. Diversification and Risk Management
One of the article’s key arguments is that the ETF’s broad asset allocation reduces the idiosyncratic risk inherent in any single company. By holding roughly 200 different securities, the ETF spreads its capital across multiple sub‑segments of the AI ecosystem. The article cites a link to the fund’s sector‑by‑sector weightings, which show that while the majority of the portfolio is still concentrated in technology and semiconductors, there are significant positions in healthcare, automotive, and industrial automation.
The fund’s 12‑month beta is shown as approximately 1.05, indicating that it tracks the overall tech market’s volatility but is slightly more exposed to swings in the broader market. The article highlights that the ETF’s expense ratio—about 0.60%—is competitive relative to actively managed AI funds, yet still higher than the ultra‑low‑cost passive index funds that many investors typically favor. However, the article argues that the premium is justified by the specialized knowledge and rigorous selection process behind the holdings.
3. Performance History
The article digs into the ETF’s historical returns, noting a 24‑month compounded annual growth rate (CAGR) of roughly 32%. In a single year, the fund outperformed the S&P 500 by more than 10 percentage points, largely thanks to the surge in semiconductor prices and the rapid adoption of cloud‑based AI services. A chart linked in the article visually compares the ETF’s performance to major benchmarks like the NASDAQ‑100 and the MSCI World AI Index.
While the article presents an optimistic outlook, it also cautions that past performance does not guarantee future results. A link to a risk‑analysis page on the ETF’s website is provided, which lists the top three risks: regulatory changes in China, potential supply‑chain disruptions for semiconductors, and the possibility of a market correction in the tech sector.
4. Management Team and Investment Thesis
Another segment of the article explores the ETF’s sponsor—Global X Investments—and its flagship team’s track record. A link directs readers to a brief bio of the fund’s chief portfolio manager, who has over two decades of experience in AI and machine‑learning analytics. The article quotes a statement from the manager that the fund’s mandate is “to invest in companies that are leaders in the creation, application, or adoption of artificial intelligence and machine learning across all industries.”
The investment thesis, as articulated in the article, rests on three pillars:
- Technological Momentum – AI and machine‑learning technologies are expected to permeate every major industry by 2030.
- Ecosystem Development – The infrastructure that supports AI—cloud services, GPUs, data centers—is itself a growth engine.
- Regulatory Support – Governments worldwide are investing heavily in AI research and standardization, creating a favorable environment for these companies.
5. Suitability for Different Investor Profiles
The article provides a practical section that outlines how the ETF might fit into various investment strategies. For conservative investors, the ETF offers exposure to high‑growth opportunities without the concentration risk of a single AI start‑up. The article recommends a balanced allocation—perhaps 10–15% of a diversified portfolio—paired with a mix of large‑cap defensive stocks and fixed‑income instruments.
Aggressive investors, on the other hand, might consider increasing their exposure to the ETF, especially if they believe AI’s “tipping point” will accelerate. The article warns, however, that the tech sector is cyclical and that a sudden shift in supply‑chain constraints or a geopolitical incident could create short‑term volatility.
6. Bottom Line: A “Safe” Bet, With Caveats
The conclusion of the Motley Fool article frames the ETF as a “safe way” to invest in AI in the sense that it balances growth potential with diversification and professional management. It urges readers to read the prospectus carefully, understand the expense ratio, and consider how the ETF’s risk profile meshes with their overall investment horizon and risk tolerance.
The article’s accompanying FAQ section—linked at the end—addresses common concerns such as tax implications of holding the ETF in a taxable account, the impact of dividend reinvestment, and how the fund’s holdings change over time. The FAQ also links to a “watchlist” page where readers can see upcoming earnings reports for key holdings, offering a deeper dive into the companies driving the fund’s performance.
Final Thoughts
For investors who are excited by AI but wary of picking individual winners, the ETF discussed in this article offers a compelling compromise. It delivers broad exposure to a sector poised for exponential growth, while the diversification across global markets and sub‑segments mitigates some of the sector’s inherent volatility. The article’s thorough examination—complete with performance data, risk analysis, and managerial credentials—provides a clear roadmap for anyone looking to decide whether this “safe” way to invest in AI aligns with their personal financial goals.
Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/12/04/could-this-be-the-safest-way-to-invest-in-ai/ ]
