AI and robotics ETFs are more popular for traders than crypto in 2023

A majority of professional investors, 56%, plan to add AI and robotics-focused ETF strategies to their portfolios this year, according to a Brown Brothers Harriman survey released Monday. This figure is up from 46% in 2022. The category beat all other thematic strategies, except Internet and Technology. This is a stark contrast to 2022, when AI and robotics followed ESG and digital asset-themed ETFs.

A recent rally in AI stocks has boosted investor interest in the industry. Tracking robotics and AI ETFs brought in around $105 million in March, while other thematic strategies like clean energy, electric cars and cloud computing all saw outflows, according to analysts. data compiled by Bloomberg Intelligence.

The $1.7 billion Global X Robotics & Artificial Intelligence ETF (ticker: BOTZ) led inflows with around $121 million so far this year. The fund is up 24% since the start of the year.

“There’s always a crowd out there that wants exposure to the ‘next thing’ – whether it’s AI, SPAC or EV,” said Todd Sohn, ETF strategist at Strategas. “They don’t want to miss the FOMO race, especially given the recency bias.”

Despite the uncertainty surrounding the Federal Reserve’s next monetary policy decision and its impact on risky assets, the survey finds that investors are still keen to stock up on certain types of speculative assets.

Even crypto winter hasn’t scared off cryptocurrency and digital asset-themed ETF investors, according to the survey of 325 institutional ETF investors, financial advisors and fund managers from around the world. Forty-eight percent of investors say they still plan to add this strategy in 2023. That’s down just 6 percentage points from last year.

Bitcoin, the world’s largest crypto based on market value, has risen 70% as investors fend off a regulatory crackdown and bet the digital asset’s independence from the traditional financial system could put it on the hook. sheltered from turbulence in the banking sector.

In the case of AI, some investors like Ankur Crawford, portfolio manager at Fred Alger Management, are betting that AI can be a long-term deflationary force because it will reduce costs and improve efficiency.

“Initially, it could actually be inflationary,” Crawford said. “There’s a cost associated with putting it into operation. But later I think it’s a deflationary force.”