If you've been keeping up with the stock market, you're likely aware of the current excitement surrounding artificial intelligence (AI). Major AI stocks like Nvidia, AMD, and Alphabet have experienced significant pullbacks from their recent highs, making it an opportune time to gain exposure to AI if you missed out on the initial boom. Currently, my portfolio doesn't have much AI exposure. While I do own a few stocks in companies that are expected to benefit from AI in some capacity, I don't possess any shares in chipmakers, AI software firms, or other businesses directly involved in AI. The main reason for this is that AI stocks aren't my specialty. I consider myself skilled in analyzing and evaluating banks and real estate stocks, which comprise a significant portion of my portfolio. However, I'm still interested in obtaining AI exposure, and I intend to do so through exchange-traded funds (ETFs). My plan is to gradually invest in two AI-focused ETFs over the next few weeks - one a passive index fund and the other actively managed. The first ETF is the iShares Future AI & Tech ETF (ARTY 0. 15%). It tracks an index that includes companies contributing to generative AI, AI data, AI infrastructure, and AI software and services. While it has a slightly higher expense ratio of 0. 47% than many index funds, it is reasonable given its specialized nature.

Currently, the ETF holds 49 stocks in its portfolio, with the top three being Broadcom, Nvidia, and AMD. With no single stock dominating more than 6% of the portfolio, it offers solid diversification. With approximately $600 million in net assets, this ETF is relatively small but provides a solid opportunity for exposure to AI technology with a lower expense ratio compared to comparable ETFs. The second AI-focused ETF I'm considering is the Ark Autonomous Technology and Robotics ETF (ARKQ 1. 38%), managed by Cathie Wood's Ark Invest. With just under $800 million in net assets, this actively managed fund seeks to outperform relevant benchmarks by hand-picking stocks. Although it has a slightly higher expense ratio of 0. 75%, it is justified given its specialization and active management. While this ETF is not solely focused on AI, it invests in various technologies that are likely to benefit from AI advancements, including robotics, intelligent devices, autonomous vehicles, and next-generation cloud computing. The fund's concentration is evident, as the top three holdings - Tesla, Teradyne, and Kratos Defense & Security - represent approximately 32% of its assets. To summarize, I prefer the iShares ETF for a diversified portfolio of AI stocks and the Ark ETF for investing in companies that are poised to benefit the most from AI's evolution. To clarify, these positions in my portfolio will initially be relatively small. Many AI stocks seem to be on the pricier side, so I plan to gradually accumulate shares over time as long-term investments. This will provide immediate exposure while also allowing me to take advantage of potential market sell-offs by adding shares at more favorable prices.