New Research Says: The Biggest Gains of AI Won't Go to AI Stocks. These 2 ETFs Could Be Better Buys.

Vanguard’s June research argues that the biggest gains from artificial intelligence may not accrue to the major AI tech builders. Instead, the investment firm suggests that U.S. value stocks and international developed-market stocks could capture more of the upside by applying AI to improve profitability and productivity. The report does not single out individual stocks or specific ETFs, but highlights two Vanguard funds that could fit an approach focused on broader equity exposure rather than “AI stocks” alone. The Vanguard Small-Cap Value ETF (VBR) holds 835 stocks, has a 0.05% expense ratio, and returned 15.9% in the first half and 27.1% over the past year. It trades against the S&P 500 as a benchmark, while caution is noted for value-stock performance over longer periods. The Vanguard International Dividend Appreciation ETF (VIGI) holds 343 international stocks, charges 0.07%, and reports a trailing 12-month dividend yield of 2.12%. It was established in February 2016.