The ROBO Global Artificial Intelligence ETF (THNQ) holds Nvidia at just 2.25% of assets while overweighting the chipmaker’s competitors, positioning the fund as a hedge against concentration risk that plagues many other popular AI ETFs.
The fund tracks the ROBO Global Artificial Intelligence Index, which uses fundamental weighting rather than market capitalization, allowing it to avoid the heavy Nvidia concentration seen in market-cap-weighted AI funds.
The approach gained attention this week as reports emerged that Meta Platforms, Inc. (META) is considering using Alphabet Inc. (GOOGL) chips instead of NVIDIA Corp. (NVDA) hardware, signaling that tech giants are seeking alternatives to the dominant chipmaker.
The Information reported Monday that Meta is exploring Google’s tensor processing units for its data centers in 2027. Nvidia shares fell 4% on the news while Alphabet gained more than 4%, according to CNBC reporting.
Popular AI funds carry Nvidia as their largest holding. The VanEck Semiconductor ETF (SMH) holds Nvidia at 18.5% of assets while the Global X Robotics & Artificial Intelligence ETF (BOTZ) holds the chipmaker at 11.75%, creating exposure to a single point of potential weakness in the AI infrastructure buildout, according to ETF Database.
THNQ’s top three holdings are Lumentum Holdings, Inc. (LITE) at 3.08%, Alphabet at 2.98%, and Advanced Micro Devices, Inc. (AMD) at 2.93%, according to ETF Database. Nvidia ranks as the fund’s 13th largest holding. Combined, Alphabet and AMD represent 5.9% of assets, more than double the fund’s Nvidia weighting.
AI ETF Draws Strong Inflows
The fund’s positioning appears to be resonating with investors. THNQ attracted $5.1 million in net inflows over the past month and $34.2 million over three months, according to ETF Database. One-year inflows reached $89.8 million as investors sought alternatives to Nvidia-heavy AI exposure.
Those flows came alongside solid performance. THNQ returned 24.7% over the past year and posted a three-year return of 30.2%, according to ETF Database. The fund has gained 22.2% year-to-date despite a 7.5% decline over the past month as technology stocks pulled back.
The fund’s structure supports its diversified approach. THNQ’s 0.68% expense ratio reflects its active methodology for capturing AI infrastructure growth across 68 holdings spanning chip designers, cloud providers, and software companies.
The Meta news could accelerate the shift THNQ is built to capture. Meta is considering both purchasing Google’s tensor processing units and renting them through Google Cloud next year as AI infrastructure costs climb toward $70 billion to $72 billion this year, according to The Information. The shift creates opportunities for Nvidia alternatives positioned in THNQ’s portfolio.
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The ROBO Global Artificial Intelligence Index is the underlying index for the ROBO Global Artificial Intelligence ETF (THNQ) and the L&G Artificial Intelligence UCITS ETF (AIAI.LN). vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for THNQ ETF and AIAI.LN, for which it receives an index licensing fee. However, THNQ ETF and AIAI.LN are not issued, sponsored, endorsed, or sold by VettaFi. VettaFi and its affiliates have no obligation or liability in connection with the issuance, administration, marketing, or trading of THNQ ETF and AIAI.LN.