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The Best Artificial Intelligence ET Fto Invest 100 In Right Now The Motley Fool

The Best Artificial Intelligence ETF to Invest $100 in for 2025

In the rapidly evolving landscape of artificial intelligence (AI), investors are increasingly seeking accessible ways to capitalize on this transformative technology without the risks associated with picking individual stocks. The article from Motley Fool delves into why exchange-traded funds (ETFs) represent an ideal vehicle for such investments, particularly for those with modest sums like $100. It argues that AI is not just a buzzword but a foundational shift akin to the internet revolution, powering advancements in everything from autonomous vehicles to personalized medicine. With projections estimating the AI market to reach trillions in value by the end of the decade, the piece emphasizes the urgency of getting involved early, even with small investments, through diversified ETFs that mitigate volatility.

The core recommendation of the article is the Global X Robotics & Artificial Intelligence ETF (BOTZ). This fund is highlighted as the premier choice for AI exposure due to its focused yet diversified portfolio, which targets companies at the forefront of robotics and AI technologies. Unlike broader tech ETFs, BOTZ zeroes in on pure-play AI innovators, making it a more targeted bet on the sector's growth. The article explains that BOTZ tracks the Indxx Global Robotics & Artificial Intelligence Thematic Index, which includes firms involved in AI software, hardware, and applications across industries like manufacturing, healthcare, and consumer services. Key holdings include names like NVIDIA, which dominates AI chip production; Intuitive Surgical, a leader in robotic-assisted surgery; and UiPath, specializing in robotic process automation. These companies are selected based on criteria such as revenue derived from AI-related activities, ensuring the ETF captures the essence of the AI boom.

One of the primary reasons BOTZ is deemed the best is its impressive historical performance. The article notes that since its inception in 2016, BOTZ has delivered annualized returns exceeding 15%, outpacing many general market indices during periods of AI hype. For instance, amid the ChatGPT-fueled surge in 2023, BOTZ saw gains of over 40% in a single year, demonstrating its sensitivity to AI catalysts. This performance is attributed to the ETF's concentration on high-growth stocks, with a significant portion allocated to U.S.-based firms (around 40%) and international players from Japan and Europe, providing global diversification. The piece contrasts BOTZ with alternatives like the Invesco QQQ Trust, which offers broad tech exposure but dilutes AI focus with non-AI giants like Apple and Amazon, or the ARK Innovation ETF, which is more speculative and has underperformed in recent market corrections due to its heavy bets on unproven disruptors.

Accessibility is another key selling point emphasized in the article. With a low expense ratio of just 0.68%, BOTZ keeps costs minimal, which is crucial for small investors starting with $100. This fee is competitive within the thematic ETF space and ensures that more of the investment goes toward growth rather than administrative overhead. Moreover, the ETF's liquidity—trading millions of shares daily—allows for easy entry and exit, even for fractional shares on platforms like Robinhood or Vanguard. The article advises that $100 can buy a meaningful stake, especially since many brokers now support fractional investing, enabling participation without needing to purchase full shares priced in the $50-$60 range.

Beyond performance and cost, the article explores the broader AI investment thesis supporting BOTZ. It discusses how AI is driving productivity gains across economies, with McKinsey estimates suggesting up to $13 trillion in added global GDP by 2030. BOTZ positions investors to benefit from this through holdings in automation leaders like ABB and Fanuc, which are pivotal in industrial AI applications. The piece also addresses emerging trends, such as AI in edge computing and machine learning algorithms, where BOTZ's portfolio is well-represented. For example, it includes companies like C3.ai and Upstart, which leverage AI for enterprise solutions and lending, respectively, showcasing the ETF's forward-looking composition.

However, the article doesn't shy away from risks, providing a balanced view. AI stocks can be volatile, as evidenced by BOTZ's 30% drawdown during the 2022 market downturn. Regulatory hurdles, such as potential antitrust actions against Big Tech or ethical concerns around AI deployment, could impact holdings. Geopolitical tensions, particularly in semiconductor supply chains, pose additional threats given BOTZ's exposure to Asian markets. The recommendation is framed as a long-term hold, advising investors to dollar-cost average into the ETF to smooth out fluctuations. For those with $100, the strategy is to start small, reinvest dividends (BOTZ yields about 0.2%), and monitor AI developments like advancements in generative AI or quantum computing that could propel the fund higher.

In comparison to other AI ETFs, such as the WisdomTree Artificial Intelligence and Innovation Fund (WTAI) or the iShares Robotics and Artificial Intelligence Multisector ETF (IRBO), BOTZ stands out for its longer track record and higher assets under management (over $2 billion), which lend stability and lower tracking error. WTAI, while innovative, has a higher expense ratio and less liquidity, making it less ideal for beginners. IRBO offers broader diversification but includes more non-AI robotics, diluting pure AI plays. The article argues that BOTZ strikes the optimal balance of focus, performance, and accessibility.

Ultimately, the piece encourages readers to view AI investing through BOTZ as a way to participate in the "fourth industrial revolution" without overcommitting. It stresses that even a $100 investment, compounded over time at BOTZ's historical rates, could grow substantially—potentially to over $400 in a decade assuming 15% annual returns. This compounding effect is illustrated with simple calculations, underscoring the power of starting early. The article concludes by reminding investors that while no investment is guaranteed, BOTZ represents a smart, diversified entry point into AI's promising future, backed by robust fundamentals and a proven index methodology. For those bullish on AI's trajectory, it's positioned as the go-to ETF to allocate that initial $100 effectively. (Word count: 912)

Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/06/23/the-best-artificial-intelligence-etf-to-invest-100/ ]