Artificial intelligence investing tips: Evaluate theme, vehicle, and strategy carefully to maximize success.

From Morningstar: 2025-06-26 15:32:00

Artificial intelligence has become a prominent investment theme, but successful investing requires careful evaluation of the theme, investment vehicle, and execution strategy. Morningstar has developed a Thematic Fund Evaluation Framework to help with this process. When assessing AI funds, clarity, investability, performance, responsiveness, durability, and growth potential are important factors to consider. Energy consumption and regulation are key obstacles that could impact AI’s growth.

Once the theme is validated, selecting the right investment vehicle is crucial. Thematic funds offer benefits such as diversification, exposure to the value chain, and capturing winner-take-all dynamics. Proper implementation of thematic funds is essential, considering factors like portfolio fit, overlap risks, growth bias, timing, behavior, and valuation awareness. Investors should approach AI funds with a long-term, buy-and-hold mindset.

Investors should be aware of the risks and rewards associated with thematic investing in AI and big data funds. Thoroughly evaluating the theme, investment vehicle, and implementation strategy can help investors make informed decisions and maximize their chances of success in this rapidly evolving and dynamic sector.



Read more at Morningstar: How to Pick an AI Fund