FAI ETF: What Is It? A Complete Guide to Returns, Expense Ratio, Holdings, and Alternative ETFs
The First Trust Bloomberg AI ETF (FAI) tracks the Bloomberg AI Index, which selects top companies based on AI-related revenue and market capitalization. It suits investors interested in the outlook for semiconductor and Big Tech stocks and in the AI growth theme.
SubscribeWhat Is the First Trust Bloomberg AI ETF?
The fund tracks the Bloomberg AI Index, which selects top companies by combining the AI revenue assessment calculated by Bloomberg Intelligence with market capitalization. It holds companies across the entire AI ecosystem, including semiconductors, platforms, and software.
It suits growth-oriented investors who want diversified exposure to the AI industry growth theme.
It is a passively managed ETF run by First Trust that tracks an index.
How Does the First Trust Bloomberg AI ETF Invest?
| Item | Details |
|---|---|
| Tracked Index | Bloomberg AI Index |
| Management Style | Passive (index tracking, non-diversified) |
| Rebalancing Frequency | Quarterly |
| Distribution Frequency | Irregular distributions |
| Expense Ratio | 0.65% |
The fund selects top-ranked companies using criteria that combine revenue assessments tied to AI products and services with market capitalization, and as a rule invests a substantial portion of its net assets in the index constituents. Semiconductor, Big Tech, and software companies are all included, and because of the non-diversified structure, the weighting of certain holdings can be relatively high.
- An index selection method that reflects both revenue assessments and market capitalization
- Coverage of the entire AI value chain, from semiconductors to platforms
First Trust Bloomberg AI ETF Size and Costs (AUM and Management Fee)
Assets under management (AUM) stand at $247.8M, and the expense ratio is 0.65% per year.
The investment theme itself differs from infrastructure theme ETFs such as PAVE and IFRA, or cannabis theme ETFs such as MSOS, which are also shown in the table, and there are differences in management fees and asset size as well.
First Trust Bloomberg AI ETF Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeVolatility tends to be relatively high depending on market interest in the AI industry, and performance tends to react sensitively during semiconductor and Big Tech earnings seasons.
While investment demand for the AI theme continues, fund flows move in tandem with related news, changes in the policy environment, and semiconductor and Big Tech earnings releases.
First Trust Bloomberg AI ETF Pros and Cons
Its strength is diversified exposure across the AI value chain, while its weaknesses are stock concentration resulting from the non-diversified structure and theme volatility.
💪 Key Strengths
⚠️ Points to Watch
First Trust Bloomberg AI ETF Alternative ETFs and Related Products
Among AI-related theme ETFs, investors can also consider UFO, a growth stock ETF that branches into the space and satellite theme, or AIFD, which selects AI stocks through active management. For more direct semiconductor exposure, a semiconductor sector ETF such as SMH may be an alternative, and for Big Tech-focused exposure, a technology sector ETF such as XLK can also be an option.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 PAVE | Global X U.S. Infrastructure Development ETF | $54.45 | +1.7% | $13.9B | 0.47% | 0.79% | +12.8% |
 IFRA | iShares U.S. Infrastructure ETF | $58.64 | +0.6% | $4.1B | 0.30% | 1.73% | +11.4% |
 MSOS | AdvisorShares Pure US Cannabis ETF | $4.20 | +6.6% | $727.8M | 0.78% | - | -6.5% |
 UFO | Procure Space ETF | $39.89 | -0.9% | $453.8M | 0.75% | 0.38% | +5.8% |
 AIFD | TCW Artificial Intelligence ETF | $45.53 | -3.6% | $121.0M | 0.75% | - | +18.8% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
| MU | Micron Technology Inc | 0.09% | $833.59 | -5.8% | $943.1B | 11.2 | 0.09% |
| NVDA | NVIDIA Corp | 0.08% | $202.06 | -1.3% | $4.87T | 25.5 | 0.39% |
| AMZN | Amazon.com Inc | 0.08% | $245.63 | +2.2% | $2.65T | 19.9 | - |
| GOOGL | Alphabet Inc | 0.08% | $278.99 | -0.3% | $3.40T | 14.6 | 0.31% |
| AVGO | Broadcom Inc | 0.15% | $322.23 | -1.2% | $1.54T | 41.1 | 0.81% |
| AMD | Advanced Micro Devices Inc | 0.07% | $466.84 | -7.5% | $762.1B | 119.8 | - |
| SKHY | SK Hynix Inc ADR | 0.07% | $147.71 | -1.0% | $1.08T | 9.6 | 1.52% |
| MSFT | Microsoft Corp | 0.07% | $507.12 | -2.8% | $3.77T | 26.5 | 0.76% |
| GOOG | Alphabet Inc | 0.07% | $278.04 | -0.1% | $3.41T | 14.5 | 0.31% |
First Trust Bloomberg AI ETF Investor Checkpoints
Here are the points to review before investing in FAI. Given the nature of AI theme ETFs, it is important to thoroughly check stock concentration, volatility, and valuation burden in advance.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 💵 Expense Ratio | Check the cumulative cost impact over a long holding period | In line with the theme ETF average |
| 📊 Stock Concentration | Check the weighting of top holdings in the non-diversified structure | Some holdings carry high weightings |
| 📈 Volatility | Check sensitivity to AI theme news and earnings | High volatility persists |
| 🔄 Rebalancing | Check changes in composition from quarterly rebalancing | Regular rebalancing in progress |
Stock concentration from the non-diversified structure and the high volatility characteristic of the AI theme are the main risk factors. Short-term corrections can become larger as market sentiment shifts.
This is a theme ETF suited to growth investors who want diversified exposure to AI industry growth. However, careful position sizing that takes stock concentration and volatility into account is recommended.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
This article reflects information as of July 2, 2026.
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