World's biggest AI fund outperforms Nasdaq with 23% surge

Investor interest in the artificial intelligence (AI) sector has surged, with more than half of professional investors planning to add AI-themed exposure to their portfolios this year, according to a new survey by Brown Brothers Harriman. The world's largest AI fund, the Global X Robotics & Artificial Intelligence ETF (BOTZ), has seen a stronger start to the year than even the red-hot Nasdaq 100, with gains of 23%. The $1.7 billion ETF's top holding is Nvidia, which has climbed 88% in 2023 and makes up roughly 9% of the fund's net assets. Lesser-weighted members, such as C3.ai and Rainbow Robotics, have seen their stocks soar more than 200% this year. BOTZ has also seen $135 million of inflows so far in 2023, including $80 million in March. Jan Szilagyi, CEO of AI-powered market analytics platform Toggle AI, stated that he is more bullish on the sector now than even before the banking turmoil rattled financial markets in March. He is encouraged by the rapid progress seen across large language models and believes that this technology will see dramatic improvement in the coming years. Despite the positive outlook for AI, most of the technology's promise is still in the future, and investors should be cautious about overinvesting in the sector.