You watched the AI rally happen from the sidelines. NVIDIA dominated the headlines, semiconductor stocks surged, and technology investors watched their portfolios climb. After missing those gains, the temptation to jump in now can be difficult to ignore. You stayed put because retirement is close enough to see, and betting the nest egg on a single hot stock felt reckless. That instinct was correct, but sitting out entirely can be costly. There is a middle ground. The Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ), VanEck Semiconductor ETF (NASDAQ:SMH), and Invesco QQQ Trust (NASDAQ:QQQ) let you invest across the AI ecosystem rather than betting everything on a handful of individual stocks. You still participate as the AI buildout continues, but your returns are not dependent on picking the next NVIDIA.
The Problem With Sitting Out Entirely
AIQ is up 24.87% year to date and 41.54% over the past year. SMH has run 58.11% year to date and 94.58% over twelve months. Even the broader QQQ is up 17.35% this year. Cash sitting in a money market did none of that. And the VIX, at 15.46, sits in the calm zone, which historically is when cautious buyers get their best entries. Waiting for a crash before you commit means you might wait forever, or worse, buy after the crash and sell during the next one.
The fix is diversification inside the broader AI theme. An ETF spreads exposure across dozens of names, so no single stock blows up the portfolio. That is exactly what these three funds do, at three varying levels of aggression.
AIQ: The Pure Theme, Globally Diversified
AIQ tracks the Indxx Artificial Intelligence & Big Data Index, providing exposure to chipmakers, cloud computing companies, and international AI leaders. Its largest positions include SK hynix at 7.11%, Micron at 5.77%, AMD at 4.80%, and Samsung at 4.79%. Investors also gain exposure to Alphabet, Microsoft, Meta, Amazon, and smaller AI-focused companies such as Palantir at 2.23%. With $10.85 billion in net assets, AIQ has grown into a sizable way to invest across the broader AI ecosystem.
The advantage of AIQ is that your returns are not dependent on any single company. For example, if C3.ai implodes tomorrow, it is just 0.19% of the overall position. If Broadcom keeps rallying, your 3.24% weight participates. If one smaller holding struggles, its impact is limited, while you still participate when larger AI beneficiaries perform well. That diversification lets you invest in the AI theme without having to correctly pick its individual winners.
SMH: Semiconductors, the Picks and Shovels
Every AI model on earth runs on chips. SMH owns the companies that make and enable them. Its top ten holdings include AMD at 10.33%, Broadcom at 9.57%, Micron at 9.39%, Taiwan Semiconductor at 8.75%, NVIDIA at 8.4%, and ASML at 8.13%.
The fund has an expense ratio of 0.35%, which means you keep about $996.50 of every $1,000 working for you each year. Its five-year return of 345.21% demonstrates the upside semiconductor stocks can provide, while the recent 6.81% one-month decline highlights the volatility that comes with that exposure. For that reason, SMH may work better as a smaller allocation within a diversified AI portfolio rather than its foundation. Semiconductor stocks offer significant growth potential, but they also represent the highest-volatility portion of this three-fund strategy.
QQQ: The Big, Boring Anchor
QQQ tracks the Nasdaq-100. Its top weights are the mega-cap names you already know: Apple, Microsoft, NVIDIA, Amazon, Meta, Alphabet. It is the tamest of the three because those companies have real cash flows, dividends, and buybacks funding the story. Over ten years it has returned 515.08%, and over the past year, 25.47%. Think of QQQ as your ballast: it moves less than SMH on bad days, and it captures the AI story through the companies actually monetizing it at scale.
The Real Trade-Off
These three funds overlap. NVIDIA, Broadcom, AMD, and Micron show up in all of them, and buying equally sized positions in each amounts to a concentrated tech bet. If the AI trade rolls over the way tech did in 2000 or 2022, all three will fall. A near-retiree should size these as a slice of their overall equity exposure, not the whole thing, and pair them with bonds, cash, and dividend payers that keep paying when the Nasdaq is not.
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