Let’s explore the exciting landscape of thematic investing, focusing on the groundbreaking field of Artificial Intelligence (AI). You probably interact with AI more often than you think. It’s the algorithm arranging your Netflix menu, the software expediting your Amazon package, and the brains behind many of the smartphone apps you use every day.
What is Artificial Intelligence?
Artificial intelligence is a field, which combines computer science and robust datasets, to enable problem-solving. In its simplest form, Artificial intelligence uses machines – generally, computers – to mimic human intelligence.
If you’ve used ChatGPT, the OpenAI chatbot that has wowed users by writing code and instantly answering complex questions, you’ve gotten a glimpse of new frontiers in artificial intelligence.
Investing in Global AI theme
The global market size of AI is expected to grow at a CAGR of ~18% over the next decade. The global market size of Artificial Intelligence is expected to cross $738.80 billion by 2030.
Investors have traditionally favored thematic and sector funds investing in domestic Companies. However, there is a strong case for Investors to consider global thematic investments.
One can diversify country risks e.g., geopolitical risks, risks arising out of government policies, regulations, weather / climate-related risks, etc by investing in global funds.
There is a low correlation of returns of different markets. Global investing can reduce volatility and provide stability to your portfolio,
Global AI thematic funds can provide you exposure to the tremendous global growth potential of Artificial Intelligence. Emerging technologies in the past, ranging from search engines, e-commerce, and social media to smartphones and gaming have created huge wealth for global investors during the past two decades.