According to a report by MarketsandMarkets conducted in 2018, the artificial intelligence market is projected to be worth $190.6 billion by 2025. This represents a compound annual growth rate (CAGR) of 36.6% over the period covering 2018-2025. Investors should be eager to have AI exposure in their portfolios.
The iShares Expanded Tech Sector ETF (NYSE:IGM) offers just that. The ETF has climbed 15.8% in 2019 as of close on February 27. This is after a 2.5% increase in 2018. The U.S. technology sector suffered sharp losses in the final months of 2018, but this ETF still managed to finish the year in the black.
The top constituents in the ETF include Microsoft Corp. (NASDAQ:MSFT), which is weight at approximately 8.08% going by its most recent holdings. As of the summer of 2018 Microsoft had over 8,000 people working in its AI research division.
The company announced a restructuring in 2018 that would allow it to apply an even greater focus on AI research.
Apple Inc. (NASDAQ:AAPL) is the second-largest constituent boasting a 7.9% weighting. The company has long worked on machine learning software and has dipped its toes into the automated vehicle sector. According to recent reports self-driving software is currently being tested.
Investors looking for broad exposure to this potentially explosive sector should consider adding this ETF in early March. The tech sector is pricey right now after U.S. stocks have enjoyed an early rally in 2019, so value investors may want to await a pullback before stacking too much in the late winter.
