What is an ETF and how do these funds compare?

An ETF, or exchange-traded fund, holds a basket of assets that trade on stock exchanges like individual stocks. ARTY is an iShares Future AI & Tech ETF, while BAI is an iShares A.I. Innovation and Tech Active ETF. Both focus on the technology sector, specifically artificial intelligence. The primary differences lie in their management styles and asset sizes, which affect how investors can use them in their portfolios to gain exposure to tech innovations.

What does 'active management' mean in ETFs?

Active management involves a fund manager making specific investment decisions to outperform a benchmark, rather than simply tracking it. BAI is actively managed, allowing for tactical flexibility in the fast-moving tech sector. ARTY typically follows an index, though its specific methodology is not available in the provided data. Investors often choose between these styles based on whether they prefer strategic flexibility or passive tracking of a defined market segment.

Why does fund size (net assets) matter?

Net assets reflect the total value of a fund's holdings and indicate its size and liquidity. BAI has $14.4 billion in net assets, significantly larger than ARTY's $4.1 billion. A larger asset base often suggests higher liquidity and easier tradability, as more investors are active in the fund. This can influence how easily you can buy or sell shares without impacting the price, making fund size a practical consideration for many investors.

How do the expense ratios compare between ARTY and BAI?

The expense ratio is an annual fee expressed as a percentage of your investment. ARTY charges a 0.47% expense ratio, while BAI charges 0.55%. This difference of 0.08 percentage points means BAI costs slightly more to own annually. Lower fees generally allow investors to keep more of their returns over time, though the higher fee of an active fund like BAI might be justified by its potential for tactical management in volatile markets.

What are the top holdings in these AI tech funds?

Both funds hold major technology companies, with five shared top-10 holdings: AMD, AVGO, MU, NVDA, and SPCX. ARTY lists AMD at 5.29% and NVDA at 4.50%, while BAI holds NVDA at 5.31% and MU at 6.62%. While the overlap suggests similar exposure to key AI players, BAI's active management may result in different weighting or unique holdings like TSM and LRCX, which are not in ARTY's top ten, influencing overall portfolio diversification.

How do dividend yields differ for these funds?

Dividend yield indicates how much income a fund generates relative to its price. BAI has a higher dividend yield of 1.26%, compared to ARTY's 0.06%. This means BAI distributes more income per dollar invested, which may appeal to income-focused investors. ARTY's very low yield suggests it prioritises capital growth or reinvests earnings rather than distributing them. Investors seeking regular cash flow from tech investments should note this significant difference in income generation potential.

Which fund has a longer track record?

ARTY was established in June 2018, providing a longer history of performance for evaluation. BAI, with an inception date of October 2024, is very new and has minimal performance history. When assessing ETFs, a longer track record allows investors to see how a fund has handled various market conditions over time. However, new funds may employ updated strategies or active management styles that could adapt better to current technology trends, despite the lack of historical data.

What sector do these ETFs focus on?

Both ARTY and BAI are categorized under Technology and focus on artificial intelligence and tech innovation. They provide exposure to companies involved in AI hardware, software, and cloud computing. This specific thematic focus means their performance is closely tied to the tech industry's growth and cyclicality. Understanding that these are sector-specific funds helps investors recognise that they may not offer broad market diversification and can be more volatile than wider market index funds.

How does the market track the AI tech sector?

The provided data indicates that the specific index tracked by ARTY is not available, as is the case for BAI, which is actively managed and therefore does not track a single index in the traditional sense. Without specific index methodologies or sector weight data, investors must rely on top holdings to understand market exposure. This limits the ability to fully assess how each fund mirrors broader market trends or specific sub-sectors within AI and technology.

Is there overlap in their strategic focus?

Yes, there is significant overlap in strategic focus. Both funds invest in key AI and semiconductor companies such as NVIDIA, AMD, and Micron. The shared top-10 holdings suggest that their market exposures are quite similar, potentially limiting diversification benefits if an investor holds both simultaneously. BAI's active status may introduce tactical shifts, but the core thematic investment in AI innovation remains a common thread, aligning them closely within the competitive technology landscape.

How do I choose between these two ETFs?

Choosing between ARTY and BAI depends on your investment goals. ARTY offers a lower expense ratio and a longer track record, appealing to those preferring passive exposure and established history. BAI provides a larger asset base, higher dividend yield, and active management, which may suit investors seeking flexibility and income. Since sector weights and index details are not available for both, evaluating top holdings and costs is essential for aligning with your specific risk tolerance and income preferences.

What should beginners know before investing?

Beginners should understand that ETFs fluctuate in value and are subject to market risks. While educational resources help compare fees, yields, and holdings, they do not guarantee future performance. It is important to consider personal financial goals, risk tolerance, and time horizon before making any investment decisions. Diversification across different asset classes may be more suitable for long-term stability than concentrating investments in thematic technology funds alone. Always conduct your own research.

ARTY vs BAI

Two funds, one decision: we compare cost, performance and what each ETF actually holds in October 2026.

Explore ARTY vs BAI by comparing fees, holdings, dividends and how each fund tracks its market. ARTY has a 0.47% expense ratio versus 0.55% for BAI, and net assets of $4.1 billion versus $14.4 billion. Yield data differs, with BAI reporting 1.26% dividend yield and ARTY 0.06%. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

ARTY

Metric

BAI

0.47%

Expense Ratio

0.55%

0.06%

Dividend Yield

1.26%

$4.06B

Net Assets

$14.43B

Holdings

Jun 26, 2018

Inception Date

Oct 21, 2024

–

Index Tracked

–

Technology

Fund Category

Technology

ARTY costs about $8.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	ARTY	BAI
AMDAdvanced Micro Devices, Inc.	5.29%	5.20%
AVGOBroadcom Inc.	4.54%	4.61%
MUMicron Technology, Inc.	4.52%	6.62%
NVDANVIDIA Corporation	4.50%	5.31%
SPCXSpace Exploration Technologies Corp.	2.67%	3.05%

Investment Analysis

ARTY

Pros

The iShares brand supports fund credibility, offering a cost advantage with a lower 0.47% expense ratio.
Its $4.1 billion net assets demonstrate significant fund size and liquidity, enhancing tradability for investors.
Established in June 2018, this fund provides an established history and longer track record for evaluation.

Considerations

A 0.06% dividend yield limits income potential, which may disappoint income-focused investors seeking distributions.
Lacking specified index methodology or sector weights data hinders full assessment of diversification and strategic focus.
The 0.47% expense ratio represents a moderate cost, potentially eroding returns for long-term passive holdings.

BAI

Pros

The $14.4 billion net assets indicate a much larger fund size compared to alternatives in this niche.
A 1.26% dividend yield provides greater income generation potential than lower-yield thematic technology funds.
Active management under iShares offers potential for tactical flexibility to navigate the fast-moving technology sector.

Considerations

Operating since October 2024, the very short inception date means minimal performance history is available.
The 0.55% expense ratio is higher than many comparable funds, potentially impacting long-term net returns.
Shared top holdings with ARTY may limit genuine diversification benefits across these specific technology ETFs.

About ARTY and BAI

ARTY (ARTY)

The iShares Future AI & Tech ETF (ARTY) offers investors targeted exposure to companies globally positioned to benefit from the artificial intelligence revolution. Launched in mid-2018, this fund focuses on businesses involved in the development, deployment, and commercialisation of AI technologies across various sectors. With a modest expense ratio of 0.47% and net assets of approximately USD 4.06 billion, ARTY provides a diversified approach, holding around 74 stocks rather than concentrating solely on major tech giants. This strategy aims to capture growth opportunities within the broader tech and AI ecosystem, including software, hardware, and services. However, investors should remain aware that while the AI sector shows significant long-term potential, it can also be subject to high volatility and regulatory changes. As a general investment tool, ARTY is best suited for those seeking to include future-focused technology in their portfolios, acknowledging that capital is at risk and returns are not guaranteed.

BAI (BAI)

The iShares A.I. Innovation and Tech Active ETF (BAI) offers investors targeted exposure to companies involved in artificial intelligence and broader technology innovation. As an actively managed fund, it seeks to outperform traditional benchmarks by selecting approximately 55 holdings within the technology sector. With net assets exceeding USD 14 billion, this ETF provides significant liquidity. It comes with an expense ratio of 0.55%, which is typical for active management strategies focusing on high-growth sectors like AI. While it currently has a dividend yield of 1.26%, the primary focus is often on capital appreciation. Since its inception in October 2024, it is a relatively new option for those looking to include AI trends in their portfolio. Remember, values can fall as well as rise, and returns are not guaranteed.

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ARTY vs BAI

Fund Snapshot

Investment Analysis

ARTY

Pros

Considerations

BAI

Pros

Considerations

About ARTY and BAI

Buy ARTY or BAI in Nemo

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6% Interest on Cash

Frequently asked questions

What is an ETF and how do these funds compare?

What does 'active management' mean in ETFs?

Why does fund size (net assets) matter?

How do the expense ratios compare between ARTY and BAI?

What are the top holdings in these AI tech funds?

How do dividend yields differ for these funds?

Which fund has a longer track record?

What sector do these ETFs focus on?

How does the market track the AI tech sector?

Is there overlap in their strategic focus?

How do I choose between these two ETFs?

What should beginners know before investing?

Fund Snapshot

About ARTY and BAI