Retirees Can Still Catch AI Rally with These 3 ETFs

Nvidia's parabolic rise has left some retirees feeling left out, but there are ways to get in on the AI rally without taking on too much risk. Three ETFs offer a more measured approach: the VanEck Semiconductor ETF (SMH), the Invesco NASDAQ 100 ETF (QQQM), and the Global X Artificial Intelligence & Technology ETF (AIQ).

Each of these ETFs targets the AI theme from a different angle, with varying levels of risk. SMH is the most aggressive, holding $77.2 billion in net assets and pouring that money into a tight roster of chipmakers and equipment suppliers. NVIDIA alone accounts for 17.55% of the fund.

QQQM, on the other hand, offers a cheaper way to own the Nasdaq-100 index, with a lower expense ratio built for long-term investors rather than day traders. This ETF has returned 15.5% year-to-date and 24.72% over the past year.

AIQ is the most thematically pure of the three, holding $10.85 billion across roughly 89 positions and reaching beyond U.S. borders in a way SMH and QQQM do not. It has performed strongly, with returns of 23.99% year-to-date and 40.01% over one year.

However, these ETFs are not without their trade-offs. The AI buildout is cyclical and valuations are stretched after a year like this. Retirees should size these positions like the volatile satellites they are, capping thematic tech at 10% to 15% of the portfolio combined.