Investors may want to stick with what’s working in the market.
VettaFi ETF experts Todd Sohn and Dave Nadig believe companies in the technology and artificial intelligence space are in for a successful second half.
Sohn, Strategas’ ETF and technical strategist, is particularly fond of the Roundhill Generative AI and Technology ETF (CHAT).
“What I like about it [CHAT] is that it’s actively managed,” Sohn told CNBC’s ETF Edge this week. “That would be my preferred route if you want to get the AI presence and see how real the demand is.”
CHAT is up more than 10% so far this year.
son also recommends Global X Robotics & Artificial Intelligence ETF (BOTZ) for those interested in adding more industrials to their portfolio. BOTZ is up more than 37% year-to-date.
“I like [BOTZ] if you want to exit technology because your portfolio already has technology exposures. Industry also benefits from this,” he said.
Nadig, VettaFi’s financial futurist, also sees advantages in using AI. However, he pointed out that the uptrend has limits.
“AI will have a long-term and significant positive impact on GDP… [But] “It is very difficult to select listed companies that will benefit particularly strongly from this,” said Nadig. “We keep bumping into it when we have cool new technology… and we end up buying it.” Google And Microsoft And Apple And Nvidiathat we all probably already have too much of.
He predicted that the industrial, robotics, and automation sectors would see the biggest gains.
Both Nadig and Sohn also highlighted ETFs for those who think the market will expand into sectors outside of technology.
Son recommended Invesco S&P 500 Equal Weight ETF (RSP) and the Vanguard Extended Market Index Fund (VXF)while Nadig suggested that JPMorgan Equity Premium Income ETF (JEPI). All three are generating positive returns this year.
“Playing a little defensively for the rest of the year instead of trying to chase technology is probably the way to go,” Nadig said. “[JEPI] was a large flow collector; It is provided for investors… Something like an expanded market or an equal weight exposure is a great way to get back on your feet if you’ve missed that [tech] previous rally this year.”