Investment funds focusing on AI and blockchain technology are gaining popularity; financial institutions' intent to incorporate blockchain is fast picking up steam, and AI-driven investment funds have gained an edge over traditional funds by way of lower fees and minimum requirements.

The latest approvals of Bitcoin and Ether ETFs to start trading on the bourse have already generated massive capital inflows, in only what is a sign of things to come.

Come walk with us through the most popular AI and blockchain funds that have gotten investment enthusiasts' attention.

Key Factors Investors Look at When Investing in AI and Blockchain

When diving into AI and blockchain investments, due diligence is paramount. Here are some key factors to consider:

Top AI and Blockchain Funds to Watch

1. BlackRock BGF Next Generation Technology Fund

Leading global asset manager BlackRock offers a promising venture with its BGF Next Generation Technology Fund. This fund seeks to capitalise on emerging technologies, including AI and blockchain.

Fund Size: Approximately $2.7 billion.

• Fundraising Goal: Variable, based on market opportunities
• Focus: Companies pioneering in AI and blockchain technology
• Technological Edge: Backed by sophisticated data analysis and blockchain innovations
• Investment Opportunities: Focused on scalable solutions and disruptive tech advancements
• Leadership: Expert team with a track record in technology investments
• Objective: Driving growth and returns through technological leadership

2. Allianz Global Artificial Intelligence Fund

This actively managed fund targets worldwide companies at the forefront of AI development and application. It holds a broad range of them across various AI sectors, such as autonomous vehicles, healthcare technology, and data analytics. Notable names in the top 10 holdings list include NVIDIA Corp, Tesla Inc, and Meta Platforms Inc.

Fund Size: $7.91 Billion

• Investment Strategy: Targets companies actively utilising AI technologies
• Geographical Reach: Globally diversified, with a keen focus on leading AI players worldwide
• Expense Ratio: 1.70%
• Annualised Returns Since Inception: -6.58%
• Technological Expertise: Invests in sectors like robotics, machine learning, and big data
• Objective: Capture the growth potential of AI by focusing on innovative and scalable AI applications

3. ARK Autonomous Technology & Robotics ETF

ARK Autonomous Technology & Robotics ETF (ARKQ) is a thematic exchange-traded fund that focuses on companies involved in disruptive innovation, including AI and robotics. Beyond that, it also has a vested interest in 3D printing, energy storage, and space exploration.

Launched by ARK Invest, ARKQ aims to capture the growth potential of companies leading the way in these innovative fields. The ETF is actively managed, meaning its portfolio is regularly adjusted to reflect the evolving landscape of autonomous technology and robotics. ARKQ offers investors a diversified way to invest in a range of companies that are at the forefront of technological advancements, potentially reshaping various industries and driving future economic growth.

Fund Size: Approximately $2.1 billion

• Focus: Autonomous technologies, robotics, and artificial intelligence
• Expense Ratio: 0.75%
• Top Holdings: Tesla, Kratos Defense and Security, Teradyne Inc
• 5-Year Performance: 10.66% annualised return
• Objective: To deliver long-term capital growth by investing primarily in disruptive innovation in the fields of AI and blockchain.

4. Global X Robotics & Artificial Intelligence ETF

Global X Robotics & Artificial Intelligence ETF (BOTZ) offers exposure to companies directly involved in the development and production of robots and artificial intelligence systems. This is a passive fund that tracks a market-cap-weighted index.

Fund Size: Approximately $2.31 Billion

• Diversification: BOTZ includes holdings in multiple sectors such as industrial automation, healthcare robotics, and computer vision technologies.
• Top Holdings: NVIDIA, Intuitive Surgical, ABB Ltd, Keyence Corp., FANUC Corp.
• Expense Ratio: BOTZ offers a competitive expense ratio at 0.68%
• 5-Year Performance: 17.95% annualised return
• Objective: Seeks to provide investment results that correspond to the price and yield performance of the Indxx Global Robotics & Artificial Intelligence Thematic Index.

5. Grayscale Bitcoin Trust (GBTC)

Grayscale Bitcoin Trust (GBTC) is one of the most notable funds for those looking to invest in blockchain technology through Bitcoin. Launched by Grayscale Investments, the world's largest crypto asset manager, this fund gives investors exposure to Bitcoin without the need to directly buy, store, or safeguard the cryptocurrency themselves.

It operates as a closed-end fund, meaning shares are not created or redeemed in response to investor demand. Trading occurs on the open market, sometimes resulting in shares trading at a premium or discount relative to the underlying Bitcoin value.

Assets Under Management (AUM): Approximately $18 Billion

• Focus: GBTC is a single-asset trust focused solely on Bitcoin.
• Expense Ratio: 2.00%
• 5-Year Performance: 40.59% annualised return
• Objective: The trust aims to track the price of Bitcoin, less the trust's fees and expenses.
• No Redemption Program: Unlike some ETFs, GBTC does not have a redemption program that allows investors to exchange their shares for Bitcoin directly.
• Eligibility: GBTC is available to accredited investors, certain qualified institutional buyers, and retail investors to buy and sell in the same way as virtually any ETF, such as through brokerage firms.

6. Fidelity Wise Origin Bitcoin Fund (FBTC)

Fidelity Wise Origin Bitcoin Fund is a significant entrant in the Bitcoin investment landscape, offering investors a regulated and accessible way to gain exposure to the leading cryptocurrency. Launched by Fidelity Investments, a globally recognised financial services provider, this fund provides an avenue for investors to tap into the potential of Bitcoin without the complexities of direct ownership.

As an ETF, FBTC is regulated by the Securities and Exchange Commission (SEC), providing investors with a level of regulatory oversight and transparency. Investors can trade it on stock exchanges just like traditional stocks. The fund's price closely tracks the spot price of Bitcoin, making it a convenient way to mirror Bitcoin's performance within a familiar investment structure.

Assets Under Management (AUM): Approximately $7 Billion

• Focus: FBTC is a single-asset ETF that exclusively invests in Bitcoin.
• Expense Ratio: 0.75%
• Performance Since Inception (January 2024): Attracted $7 Billion in inflows, making it one of the most popular ETFs.
• Objective: The fund seeks to track the performance of Bitcoin, as measured by the Fidelity Bitcoin Reference Rate, net of the fund's fees and expenses.
• Institutional-grade custody: FBTC offers a transparent and regulated way to invest in Bitcoin, with shares trading on major stock exchanges. The fund is backed by Fidelity Digital Assets, providing institutional-grade custody for the underlying Bitcoin.
• Eligibility: FBTC is accessible to a wide range of investors, including retail investors, through brokerage accounts.

7. Amplify Transformational Data Sharing ETF (BLOK)

BLOK is an actively managed ETF that seeks to provide total returns by investing in companies deeply involved in developing and using blockchain technologies.

It has an intriguing focus on 'pure-play' companies, meaning those whose main business activity is related to blockchain technology. This distinguishes it from other ETFs that may have broader exposure to technology companies with only tangential involvement in blockchain.

Assets Under Management (AUM): Approximately $711 Million

• Focus: BLOK invests in companies across the blockchain landscape, including those involved in cryptocurrency mining, blockchain infrastructure, and applications built on blockchain technology.

• Top Holdings: MicroStrategy Inc., Galaxy Digital Holdings Ltd., Marathon Digital Holdings, Inc., Coinbase Global, Inc., Hive Blockchain Technologies Ltd.

• Expense Ratio: 0.71%

• 5-Year Performance: 43.30% annualised return

• Objective: BLOK aims to provide investors with total return by capitalizing on the growth potential of blockchain technology.

8. Bitwise 10 Crypto Index Fund (BITW)

BITW provides investors with a diversified way to access the top 10 cryptocurrencies by market capitalisation, offering a broad exposure to the crypto market without having to pick individual winners. That helps investors to mitigate concentration risks.

BITW follows a strict, rules-based methodology to select and weigh the top 10 cryptocurrencies, with monthly rebalancing.

Assets Under Management (AUM): Approximately $1 Billion

• Focus: BITW tracks the Bitwise 10 Large Cap Crypto Index, representing the 10 largest cryptocurrencies by market cap.
• Top Holdings: Bitcoin, Ethereum, Cardano, Binance Coin, Solana, XRP, Dogecoin, Polygon, Polkadot, Litecoin.
• Expense Ratio: 2.50%
• 5-Year Performance: 202.00%
• Objective: BITW aims to provide investment results that closely correspond to the performance of the Bitwise 10 Large Cap Crypto Index.
• Eligibility: BITW is available to a wide range of investors through traditional brokerage accounts.

*All data and figures are accurate as of 30 July 2024

Why AI and Blockchain Are Gaining Traction in Investing

The past few years have shown that investing in AI and blockchain-focused funds can be rewarding. However, we have to preach the usual refrain: always do your due diligence, and invest because you genuinely believe in the vision and developing technologies behind the funds.

Besides these popular retail-level AI and blockchain funds, let's not neglect the other side of the equation that is also indicative of the growing confidence in the industry: Blockchain venture capital funds.

These funds, often established by experienced investors and industry experts, specialise in identifying and supporting promising blockchain startups and projects. These funds often offer not just financial backing, but also valuable mentorship, network connections, and strategic guidance to help portfolio companies navigate the complexities of the blockchain landscape.

Blockchain Ventures, a corporate venture capital arm of Blockchain.com, is one such example of a blockchain VC that invests in distributed ledger technology (DLT) projects in the cryptocurrency industry. It has stakes in successful companies such as Circle, DFINITY, and StarkWare, and it is also one of aelf's major capital partners in the blockchain development journey.

aelf Sets Sights on AI Blockchain

Since we're on the AI-blockchain conversation, aelf has undergone developments and is now more than just your layer 1 blockchain platform — it has since incorporated AI functionalities to drive greater performance and usability for both users and developers. By building AI-driven algorithms directly into our core framework, it allows for real-time analysis of smart contracts, ensuring seamless execution by identifying and rectifying inefficiencies.

We get to speed up performance, unlock greater cross-chain interoperability, and process vast amounts of transaction data in a short amount of time, which aids in enhanced fraud detection and smarter decision-making.

The network also benefits from AI's predictive capabilities in scalability planning and intelligent load balancing, which ensures optimal resource allocation and reduces potential bottlenecks. For developers, this means more efficient coding and deployment processes, while users enjoy a more reliable, faster, and secure transaction environment.

Since successful investment in blockchain and AI is all about doing due diligence, we'd like to invite you to learn more about blockchain with us, starting with our refurbished aelf website and blog!

*Disclaimer: The information provided on this blog does not constitute investment advice, financial advice, trading advice, or any other form of professional advice. Aelf makes no guarantees or warranties about the accuracy, completeness, or timeliness of the information on this blog. You should not make any investment decisions based solely on the information provided on this blog. You should always consult with a qualified financial or legal advisor before making any investment decisions.

About aelf

aelf, an AI-enhanced Layer 1 blockchain network, leverages the robust C# programming language for efficiency and scalability across its sophisticated multi-layered architecture. Founded in 2017 with its global hub in Singapore, aelf is a pioneer in the industry, leading Asia in evolving blockchain with state-of-the-art AI integration and modular Layer 2 ZK Rollup technology, ensuring an efficient, low-cost, and highly secure platform that is both developer and end-user friendly. Aligned with its progressive vision, aelf is committed to fostering innovation within its ecosystem and advancing Web3 and AI technology adoption.

For more information about aelf, please refer to our Whitepaper V2.0.

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