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ETFs Explained | How Exchange-Traded Funds Work

Exchange-Traded Funds (ETFs) are investment funds that trade on stock exchanges just like individual stocks. An ETF holds a collection of assets—such as stocks or bonds—so when you buy one ETF, you’re investing in many assets at once. This helps investors diversify their portfolios with a single purchase.

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ETFs can be bought and sold throughout the trading day, and their prices usually stay close to the value of the assets they hold. Because they are typically low-cost and easy to trade, ETFs are a popular option for beginners looking for a simple way to invest in the market.

Exchange-Traded Funds (ETFs) to Watch 

Top AI ETFs

AI & Robotics ETFs​

  • Global X Robotics & Artificial Intelligence ETF (BOTZ)

  • iShares Robotics and Artificial Intelligence ETF (IRBO)

Semiconductor ETFs (AI Infrastructure)​

  • VanEck Semiconductor ETF (SMH)​

  • iShares Semiconductor ETF (SOXX)

Innovation & Disruptive Technology ETFs

  • ARK Innovation ETF (ARKK)​

Best for AI platforms and services

WisdomTree Cloud Computing Fund (WCLD)

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Top Technology ETFs

  • Technology Select Sector SPDR Fund (XLK)

  • Vanguard Information Technology ETF (VGT)

  • Invesco QQQ Trust (QQQ)

  • VanEck Semiconductor ETF (SMH)

  • iShares Semiconductor ETF (SOXX)

  • ARK Innovation ETF (ARKK)

  • ​Global X Robotics & Artificial Intelligence ETF (BOTZ)

Top Energy ETFs

  • Energy Select Sector SPDR Fund (XLE)

  • Vanguard Energy ETF (VDE)

  • iShares Global Energy ETF (IXC)

  • SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

  • iShares Global Clean Energy ETF (ICLN)

  • Invesco Solar ETF (TAN)

Top Defense ETFs

  • iShares U.S. Aerospace & Defense ETF (ITA)

  • SPDR S&P Aerospace & Defense ETF (XAR)

  • SPDR S&P International Aerospace & Defense ETF (SPAD)

  • Industrial Select Sector SPDR Fund (XLI)

Top Cybersecurity ETFs

  • First Trust Nasdaq Cybersecurity ETF (CIBR)

  • ETFMG Prime Cyber Security ETF (HACK)

  • Global X Cybersecurity ETF (BUG)

  • Invesco QQQ Trust (QQQ)​

Top Crypto ETFs

  • iShares Bitcoin Trust (IBIT) – BlackRock

  • Fidelity Wise Origin Bitcoin Fund (FBTC)

  • Grayscale Bitcoin Trust ETF (GBTC)

  • ARK 21Shares Bitcoin ETF (ARKB)

  • Bitwise Bitcoin ETF (BITB)

Top Healthcare ETFs

  • Health Care Select Sector SPDR Fund (XLV)

  • Vanguard Health Care ETF (VHT)

  • iShares Global Healthcare ETF (IXJ)

  • iShares Biotechnology ETF (IBB)

  • SPDR S&P Biotech ETF (XBI)

  • iShares U.S. Medical Devices ETF (IHI)

Top Pharmaceutical ETFs

  • iShares U.S. Pharmaceuticals ETF (IHE)

  • SPDR S&P Pharmaceuticals ETF (XPH)

  • iShares Global Healthcare ETF (IXJ)

  • Vanguard Health Care ETF (VHT)

  • Invesco Dynamic Pharmaceuticals ETF (PJP)

  • SPDR S&P Pharmaceuticals ETF (XPH)

The Price Bandit - Top Cannabis ETFs

Top Cannabis ETFs

  • AdvisorShares Pure US Cannabis ETF (MSOS)

  • Amplify Alternative Harvest ETF (MJ)

  • AdvisorShares Pure Cannabis ETF (YOLO)

  • Global X Cannabis ETF (POTX)

  • Amplify Seymour Cannabis ETF (CNBS)

Top Real Estate ETFs

  • Vanguard Real Estate ETF (VNQ)

  • Schwab U.S. REIT ETF (SCHH)

  • Vanguard Global ex-U.S. Real Estate ETF (VNQI)

  • iShares Residential and Multisector Real Estate ETF (REZ)

  • Global X Data Center REITs & Digital Infrastructure ETF (VPN)

  • iShares Mortgage Real Estate ETF (REM)

SMH (Semiconductors)

QQQ (Nasdaq-100)

VOO (S&P 500)

During the AI revolution, SMH, QQQ, and VOO offer exceptional opportunities for investors seeking strong, long-term growth. VOO, QQQ, and SMH are exchange-traded funds (ETFs)—professionally managed baskets of stocks that give investors easy, diversified exposure to major market indexes and high-growth sectors.

SMH positions investors at the heart of the AI boom by focusing on the semiconductor companies powering every breakthrough in AI computing—these firms stand to capture extraordinary demand as AI models, data centers, and cloud platforms expand at record speed. (NVIDIA, Taiwan Semiconductor Manufacturing Company, Broadcom...)​

QQQ provides access to the world’s most innovative technology leaders—companies building AI systems, deploying advanced algorithms, and monetizing AI across cloud, software, and digital services—making it a powerful engine for future returns. (NVIDIA, Apple, Microsoft, Broadcom, Amazon, Alphabet, Tesla, Meta, Netflix...)

VOO delivers broad exposure to America’s strongest companies, including all major AI pioneers, allowing investors to benefit from rising productivity, expanding earnings, and the transformational impact AI is having across every sector of the economy. (NVIDIA, Microsoft, Apple, Amazon, Meta...)

Three Levels of an Aggressive AI-Tilted Portfolio

There are three levels of an aggressive AI-tilted portfolio. A super-aggressive approach puts 60% in SMH, 30% in QQQ, and 10% in VOO, maximizing exposure to semiconductors and tech but with the highest volatility.

A balanced-aggressive approach spreads risk more evenly with 40% QQQ, 30% SMH, and 30% VOO, still heavily tilted toward AI while maintaining a stronger diversified base.

A moderate-aggressive approach keeps stability at the core by placing 50% in VOO, 40% in QQQ, and 10% in SMH, giving meaningful AI exposure but with more protection against market swings.

Together, these ETFs form a compelling, forward-looking strategy designed to help investors maximize gains during the most significant technological shift of our lifetime.

The Utilities Select Sector SPDR Fund (XLU)

XLU is a solid investment because it gives you simple, low-risk exposure to the utilities sector—companies that provide essential services like electricity and water. These businesses tend to be stable, less volatile than the broader market, and offer reliable dividends. Even better, the rise of AI is creating massive new demand for power: data centers that run AI models consume enormous amounts of electricity, strengthening the long-term growth outlook for utility companies.As the AI revolution accelerates, utilities are becoming a critical backbone of the digital economy, making XLU a steady, income-producing investment that also benefits from one of the biggest technological shifts of our time.

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