AI stocks, those equities either from AI pioneers or firms poised to benefit from that innovation, have driven stock market and portfolio performance for months and months and months. Investors have largely benefitted, but as AI stocks enter a new phase, it could be time to refresh portfolios. The active, research-based ETF TTEQ has an innovation-centric investment strategy that has helped it deliver strong returns YTD.
Key Takeaways:
- AI stocks are a big factor for investors right now, both as a boost and as a source of bubble-shaped risk.
- The right investing approach can harness that and potentially outperform other tech strategies.
- The active ETF TTEQ presents a strong candidate therein.
Why look to an ETF like the T. Rowe Price Technology ETF (TTEQ) for AI stocks exposure? The strategy has a few important advantages. Its focus on fundamental research and innovation across sectors helps it find companies that leverage AI, not only those developing artificial intelligence models. Its active ETF flexibility means it will look for the strongest performers therein, rather than simply hold the megacap AI names most investors already have.
What’s more, rather than just hold AI stocks directly, holding an ETF like TTEQ can make for a strong medium- to long-term hold. With T. Rowe Price’s fundamental research capabilities, its management can find opportunities that simply following the headlines wouldn’t.
See more: How Active ETFs Can Outperform for Tech, AI IPOs
That has helped the active ETF outperform certain tech ETFs with which investors are already familiar. For example, TTEQ has outperformed the Vanguard Information Technology Index Fund ETF (VGT) on a YTD and one-year basis, per YCharts data. TTEQ has returned 29.66% YTD, according to YCharts, compared to 24.6% for VGT in that time.
TTEQ can also claim an advantage that neither stock pickers or passive ETFs can. The strategy was able to invest in OpenAI last year, before its potential IPO. Leaning on research, the fund has freedom to invest in ways that others cannot. Together, its performance YTD and its agility in uncertain times could make it an interesting AI stocks solution to add to portfolios.
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