iShares Future Exponential Technologies ETF

XT

Market cap $3.73B

OpenAI's partnership spree with AMD, Oracle & NVIDIA fuels AI boom -- ETFs like IYW, FTEC, FDN, AIQ & XT stand to gain.

With U.S. markets enjoying renewed bullish momentum, investors seeking an easy way to participate in the rally can look to exchange-traded funds (ETFs).

I recommend a 60/40 split: 60% in IXN for large-cap US tech exposure 40% in XT for diversification and emerging growth. IXN captures current tech momentum with US giants like Nvidia, Microsoft, and Apple, but carries concentration and valuation risks. XT offers global, diversified exposure to mid- and small-cap innovators, healthcare, and industrials, hedging against large-cap overvaluation.

The S&P 500 tops 6,400 for the first time as large-cap tech and AI-fueled gains propel the index. Tap AI-based ETFs like AIQ and ARKQ.

Whether you're a dividend investor or a growth investor, there can be an exchange-traded fund (ETF) out there to meet your specific investment goals. There are many ETFs to choose from these days, which can allow you to focus on a certain strategy.

iShares Exponential Technologies ETF focuses on companies driving technological innovation across various sectors, offering diversified exposure to high-growth potential industries. The ETF's investment thesis is centered on capturing the growth of exponential technologies, including AI, robotics, and biotechnology, which are expected to transform industries. The fund looks appealing due to its diversified portfolio, evidential capacity to out-perform (albeit not since January 2021), and alignment with long-term technological trends.

For all its anticipated potential, the AI space is still nascent, and investors looking to capitalize on the hype may need to get creative. Some of the leading AI firms, like OpenAI, are not yet publicly traded, while the industry overall is shifting at such a rapid pace that bets on many individual companies may carry higher risk levels than some investors are comfortable with.

The iShares Exponential Technologies ETF is a great way for conservative investors to add higher-octane equity exposure to their portfolios. XT has exhibited relatively low downside risk compared to other risk-seeking investments and offers diversification with over 200 holdings. The ETF focuses on technology stocks, which have shown significant growth potential over the past five years.

iShares Exponential Technologies ETF is a hold due to multiple risk factors outweighing its returns along with a relatively high expense ratio. XT lacks holdings with strong fundamentals and diversified revenue streams compared to peer tech funds, particularly Vanguard's VGT. XT also includes foreign tech holdings in emerging markets, representing geopolitical risks.

iShares Exponential Technologies ETF is a go-to holding due to market volatility and potential for high returns. I prefer XT to the ARK Innovation ETF, given its smoother path due to a more diversified and passive/indexed approach. XT's lower volatility and diversified portfolio make it a buy, with potential for a price increase to its 2022 high and beyond.