What you want to achieve
Investing in AI and technology without getting carried away
Artificial intelligence may be the defining investment theme of this decade. That is exactly why it needs a disciplined approach.
The challenges
- Excitement driving prices ahead of profits.
- AI funds holding the same few companies you already own.
- Sharp falls when sentiment changes.
- Telling genuine AI beneficiaries from marketing.
How a disciplined process helps
Cap the theme
Decide the maximum share of your portfolio you will commit to AI and technology, including what you already hold through global funds.
Our article on AI ETFs sets out two checks to make before buying.
Look inside the fund
Many AI and technology funds overlap heavily with broad indices. Check the top holdings and how much you are really adding.
Concentration can be higher than it looks.
Have exit rules
Write down what would make you reduce exposure: valuations beyond a set level, a change in the investment case, or a fall beyond your limit.
Our article on funds rotating out of AI looks at how sentiment shifts.
Where to start
- How to invest in AI with ETFsThe two checks to make first.
- Big funds rotating out of AIWhat it means for you.
- S&P 500 concentrationShould the Magnificent Seven worry you?
- How to use ChatGPT for investingPrompts that actually help.
Questions people ask
Is it too late to invest in AI?
Nobody knows. A process that limits position size and sets exit rules helps whatever happens next.
Are AI ETFs a good way to invest?
They can offer diversification within the theme, but check holdings, costs and overlap with what you already own.
Can I use AI tools to research investments?
Yes, carefully. Our ChatGPT article shows prompts that help and the checks to make.
Important: this page is education and information only. It is not financial advice or a personal recommendation, and it does not take your circumstances into account. The value of investments and pensions can fall as well as rise, and you may get back less than you put in. Past performance is not a reliable indicator of future results. If you are unsure what is right for you, speak to a regulated financial adviser.