Best AI ETFs for 2026: Top AI ETFs Compared by Cost, Holdings and Risk
2026-10-16
The VanEck Semiconductor ETF (SMH) was up about 69% in 2026 as of September 30, while the Global X Robotics & Artificial Intelligence ETF (BOTZ) gained just 0.06% over the year to that date. Both are called "AI ETFs."
This guide compares six AI ETFs (AIQ, SMH, BOTZ, CHAT, IGV and SKYY) by cost, holdings and risk so you can see what each one actually owns. It is educational and not a recommendation.
Key Takeaways
"AI ETF" covers very different funds. SMH holds chipmakers (0.35% expense ratio), AIQ spreads across AI software and hardware (0.68%), BOTZ focuses on robotics (0.68%), IGV holds software (0.38%), SKYY holds cloud (0.60%) and CHAT is actively managed (0.75%).
Performance has diverged sharply. SMH rose about 69% year to date on September 30, AIQ returned 32.28% over one year, and BOTZ returned 0.06%, so the label says little about the results.
Concentration and volatility matter as much as cost. SMH caps Nvidia at 20% of the fund, IGV had about 35% in four names, and CHAT showed a beta of 2.43 against the S&P 500 with a 28% drawdown in 2026, per PortfoliosLab.
What Is an AI ETF?
An AI ETF is an exchange-traded fund that holds stocks tied to artificial intelligence. There is no single definition, so funds differ in what they count as "AI": chip designers, cloud providers, software firms, robotics makers or a mix.
The funds below are traditional equity ETFs traded on stock exchanges. They are not crypto assets, and the figures come from fund issuers and data sites on the dates noted.
Best AI ETFs for 2026: Side-by-Side Comparison
Data for SMH, IGV and SKYY is from Motley Fool's October 15, 2026 close. AIQ and BOTZ come from Global X (October 14–15, 2026), and CHAT from PortfoliosLab (October 16, 2026).
AIQ vs SMH: What Is the Difference?
AIQ gives broad exposure to the AI ecosystem, while SMH is a concentrated bet on chips.
ETF Savant, in a January 2026 comparison, says the two move together most of the time, but SMH tends to swing harder. In that data, SMH had higher volatility than AIQ, and both had maximum drawdowns of about 45% since 2018. Those figures predate October 2026, so verify them live.
What Is the Cheapest AI ETF?
Among the funds covered here, SMH has the lowest expense ratio at 0.35%, followed by IGV at 0.38%. Each 0.01 percentage point is $1 a year on $10,000, so the cost gaps are:
A lower fee does not mean a better fund. SMH's low cost comes with high concentration, and the cheapest option may not match the exposure you want.
What Does the Global X AI ETF (AIQ) Hold?
As of October 15, 2026, AIQ held 88 stocks and $10.23B in net assets. Its top holdings included Palantir (4.46%) and Microsoft (3.88%). The index selects up to 60 companies that apply AI in products and services and up to 25 AI hardware and quantum computing companies, and reconstitutes annually.
Global X reports these results as of September 30, 2026:
Past performance does not guarantee future results.
Roundhill Generative AI & Technology ETF (CHAT) Review
CHAT is actively managed, so its manager chooses holdings instead of tracking an index. PortfoliosLab describes it as a global fund covering AI infrastructure, semiconductors, software and cloud platforms.
CHAT's best month in 2026 was April (+26.1%), and its worst was July (−16.9%). A beta of 2.43 means it has moved far more than the S&P 500, in both directions. Active funds also depend on the manager's choices, so review the latest holdings and the fund's annual report.
Why Did BOTZ Lag Other AI ETFs?
BOTZ tracks robotics and AI companies, and its mix looks very different from chip-heavy funds. Industrials made up 47.38% of the fund, Japan was 31.94% of assets and Intuitive Surgical (9.08%) and Fanuc (8.77%) led the holdings.
Global X reports a one-year NAV return of +0.06%, a three-year annualized +12.93% and a five-year annualized −0.47% as of September 30, 2026. The contrast with AIQ and SMH shows that "AI" in a fund name does not guarantee the same drivers.
What About Software, Cloud, Cybersecurity and Power ETFs?
A Motley Fool column from October 6, 2026 grouped ETFs by stage of the AI trade, noting that leadership has shifted from hyperscalers to chips, memory and, more recently, cybersecurity:
IGV (software): about 100 names, with 35% in four stocks.
SKYY (cloud): 65 companies.
CIBR (cybersecurity): CrowdStrike, Fortinet, Palo Alto, Cisco and Broadcom are the top five.
GRID (smart grid): electrical equipment and infrastructure makers rather than data center REITs.
The columnist said he usually suggests a broader fund such as AIQ and would not make these sub-theme ETFs a big part of a portfolio, since broad stock funds already hold much of this theme. That is one writer's view, not a rule.
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How Do You Choose an AI ETF?
Decide what "AI" means to you. Chips, software, cloud, robotics and power are different bets.
Check concentration. SMH caps any stock at 20%, but one name still drives much of it. Look at the top 10 holdings.
Check overlap. ETF Savant puts the sector overlap between AIQ and SMH at 97%, so owning both may duplicate exposure.
Compare costs, then compare structure. A 0.35% fund and a 0.75% fund can differ by about $40 a year on $10,000, but exposure and volatility matter more.
Look at drawdowns. CHAT's 28% decline in 2026 is a reminder that thematic funds can fall sharply.
Size your position so a large drop would not change your plans.
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What Are the Risks of AI ETFs?
Concentration risk: a few stocks can drive results. Motley Fool notes that Micron, AMD and Intel together accounted for about 32 percentage points of SMH's 69% gain by its estimate.
Cyclicality: memory and chip prices can fall as quickly as they rose.
Valuation and sentiment risk: thematic funds can fall sharply when enthusiasm fades.
Data differences: trackers report different periods, so compare like with like.
FAQ
What is the best AI ETF?
There is no single best AI ETF, because funds track different parts of the AI trade. SMH offers chip exposure at 0.35%, AIQ offers broader exposure at 0.68%, and each carries different risks.
What is the cheapest AI ETF?
Of the funds compared here, SMH is cheapest at 0.35%, followed by IGV at 0.38%. Check the issuer's website for current fees.
What is the difference between AIQ and SMH?
AIQ holds 88 AI-related stocks across software, hardware and services, while SMH holds about 25 semiconductor companies with Nvidia capped at 20%. SMH has a lower fee and typically higher volatility.
What does the Global X AI ETF (AIQ) hold?
AIQ held 88 stocks on October 15, 2026, led by Palantir (4.46%) and Microsoft (3.88%). About 73% is in information technology and about 69% is in US companies.
Is CHAT a good AI ETF?
CHAT is an actively managed generative AI fund with a 0.75% expense ratio and a 2026 maximum drawdown of 28.34%. It has returned 35.24% over one year, but with higher volatility than the S&P 500.
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Disclaimer: The content of this article does not constitute financial or investment advice.
