There's a major ETF focused on AI memory stocks, but it has some drawbacks.
Why the Invesco Dorsey Wright Technology Momentum ETF is a better choice
The Roundhill Memory ETF is criticized for its lack of diversification, holding only 17 stocks with over 52% concentrated in its top five holdings. This makes it vulnerable to single-company downturns. The Invesco Dorsey Wright Technology Momentum ETF, conversely, offers better diversification with 37 companies, and no single stock accounts for more than 6.04% of its portfolio. It also boasts a strong track record, outperforming the S&P 500 significantly over the last decade.
There's a big memory name missing
Despite its advantages, the Invesco Dorsey Wright Technology Momentum ETF has a notable limitation: it invests exclusively in U.S. companies, thereby excluding major international AI memory players like SK Hynix. Additionally, it is not a pure-play memory chip ETF, meaning its holdings would dynamically shift based on momentum indicators, potentially moving away from memory chips if market conditions change. However, the author still recommends it over more narrowly focused alternatives.
