Investors may want to stick with what works in the market.
ETF experts Todd Sohn and Dave Nadig of VettaFi believe a winning second half is in store for technology and artificial intelligence.
Sohn, ETF and technical strategist at Strategas, particularly likes Roundhill Generative AI and Technology ETF (CHAT).
“What I love about (CHAT) is that it’s actively managed,” Sohn told CNBC.ETF Edgethis week. “That would be my go-to route if you want to get that exposure to AI and see how real the demand is.”
CHAT has grown over 10% so far this year.
Sohn also recommends ETF Global X Robotics and Artificial Intelligence (BOTZ) for those who wish to introduce more industrials into their portfolio. BOTZ is up more than 37% since the start of the year.
“I like (BOTZ) if you want to get away from tech because you already have tech exposure in your portfolio. Industrials benefit from that as well,” he said.
Nadig, VettaFi’s financial futurist, also sees the benefits of exposure to AI. But, he suggested that the rise has limits.
“AI is going to have a long-term and significant positive effect on GDP… (But) it’s very difficult to pick public companies that will be the outsized beneficiaries,” Nadig said. “We run into this all the time when we have cool new technology…and we end up buying Google And Microsoft And Apple And Nvidiaof which we probably all already have too much.”
He predicted that industrials, robotics and automation are positioned for the biggest gains.
Nadig and Sohn also highlighted ETFs for those who believe the market will expand to include sectors beyond technology.
Sohn recommended Invesco S&P 500 Equal Weight ETF (RSP) and the Vanguard Extended Market Index Fund (VXF)while Nadig suggested the JPMorgan Equity Premium Income ETF (JEPI). All three are generating positive returns this year.
“Playing a little defensive the rest of this year instead of trying to chase tech is probably the way to go,” Nadig said. “(JEPI) has been a huge flow gatherer; it’s aimed at investors…Something like extended market or equal weight exposure is a great way to try and catch a leg up if you missed that rally ( technology) so far this year.”