Investment Strategy

Here are ETF themes and categories investors may want to consider in the second half of 2023

Hello! This is markets reporter Isabel Wang bringing you this week’s ETF Wrap. In this week’s edition, I spoke with CFRA’s Aniket Ullal, head of ETF data and analytics, about thematic ETF ideas and investment categories for the second half of 2023.

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U.S. stocks just closed out a historically robust first half of the year with flows into U.S. equity-related exchange-traded funds picking up steam in the second quarter. The rally has been primarily driven by the solid returns of tech sector highfliers, despite being clouded by numerous downside risks such as inflation, geopolitical tensions and recession concerns.

Investors in exchange-traded funds rapidly took note of the growth potential for artificial intelligence (AI) and robotic-related ETFs that specifically target companies like Nvidia Corp. NVDA which help build or benefit from AI applications.

The Global X Robotics & Artificial Intelligence ETF BOTZ has attracted inflows of over $662 million and jumped 36% so far in 2023, while Global X Artificial Intelligence & Technology ETF AIQ recorded a total inflows of $221 million and advanced 37.1% year to date. Nvidia, which has gained over 187% in 2023, is their top holding, according to FactSet data.

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