Invest in AI – How To Invest In AI For Beginners in 2021

Fact Checked by Gary McFarlane

Searching for AI stocks to invest in from Australia? AI (Artificial Intelligence) stocks are companies involved in areas like machine learning, the cloud, autonomous vehicles, and robotics. Giant household names like Google (GOOG), Apple (AAPL) and Microsoft (MSFT) are AI companies and there are thousands of more firms involved in the AI supply chain. The global AI market is expected to be worth just under a trillion USD by 2028 (according to projections by Grand View Research).

Below we outline which financial instruments you can use to invest in AI stocks, as well as review 3 reputable brokers which welcome Australian clients looking to expose their portfolio to the AI trend.

#1 Platform To Invest in AI – eToro

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How to Invest in AI – Step-by-Step Guide 2021

To invest in AI, you will need to use an online broker.

  • Step 1: Open an eToro account: This is an easy process. Head to eToro.com. To get started, press the ‘Join Now’ button. You will need to supply a few simple details and tick that you have read a few legal bits. Proceed by pressing ‘Create Account’ button.
  • Step 2: Verify your identity: All decent brokers insist that customers follow what are known nowadays as KYC (Know Your Customer) protocols. eToro is no exception. Verification does not take long. You will need proof of ID and proof of address. Top tip: supply a scan of your (valid) passport for speediest verification. You will get an email when verification is complete.
  • Step 3: Fund your account: When you are verified, press the blue ‘Deposit Funds’ button. AUD is one of 15 currencies that eToro accepts. You can use PayPal, bank transfer with or credit/debit card to deposit AUD into your account. No deposit fee applies.
  • Step 4: Invest in AI: You can invest in AI stocks directly. Search for them using the eToro toolbar, and press the big blue ‘Trade’ button to get started. Or you can use eToro’s proprietary CopyPortfolios to copy experienced AI investors, trade by trade, and invest in a bunch of AI stocks at once.

Where to Invest in AI – Top AI Brokers Australia

To invest in AI stocks, you will need to use the services of an online broker.

It is easy enough to find a broker. But, if you are investing from Australia, you will need to track one down that allows you to invest in Australian Dollars (AUD).

When you search for a broker online, you will be hit by a bewildering array of choices. A key issue for all investors is that many brokers can only serve clients from certain countries. Some of the big US brokers, for example – including TD Ameritrade and Fidelity – can only accept US and/or Canadian clients. Reputable UK broker Hargreaves Lansdown can only accept UK clients.

You need to find a broker that deals in AI stocks that are allowed to deal with investors based in Australia. We can recommend three such brokers. eToro, AvaTrade and Capital.com are set up for Australian clients. They all accept AUD, and they all sell AI stocks.

Let’s see what each broker has to offer:

1. eToro – Best Overall AI Broker Australia

Since its foundation in 2006, eToro has attracted 20 million investors from over 120 countries. eToro is a great place for beginners to get investing. The user interface is designed to be easy to navigate, and the beginner will not get overwhelmed by detail.

eToro charges no commission on stock transactions and has a broad selection of AI stocks. Australian customers are welcome and AUD is accepted as a deposit currency. eToro boasts global regulation from the FCA (UK), CySEC (Cyprus) and ASIC (Australia).

AI Investment with eToro

With eToro, you can invest in AI stocks in three ways:

  1. You can buy AI stocks direct at no commission and hold them in your eToro account free of charge.
  2. You can invest in an eToro CopyPortfolio and copy the trades real-time of eToro AI investing expertise.
  3. You can buy into an AI ETF (Exchange Traded Fund).

1. Buy AI stocks direct with eToro

You can search for stocks in the eToro toolbar by entering the name of the company or the stock ticker. Note that entering ‘AI’ will not get you anywhere: you need to know the name of an AI stock. To narrow your search you can press the ‘Industry’ button and select ‘Technology’ stocks.

2. Invest in an eToro AI CopyPortfolio

eToro CopyPortfolios are a form of copy trading. This means you allocate a certain amount of your funds to the Copyportfolio and eToro will then use those funds to trade, usually on a long-term basis. With a CopyPortfolio, you do not do any trading yourself. eToro’s expertise trades on your behalf. CopyPortfolios are not like ETFs (Exchange Traded Funds) which tend to be static. Although they are mostly focussed on holding stocks for the long-term, CopyPortfolios are dynamic. The trading positions will change from time to time to maximise returns. Usually a minimum of $1000 is required to invest in an eToro CopyPortfolio.

With the BigTech (Large Tech Market Cap) CopyPortfolio you can invest in AI giants like Microsoft, Apple, Google, Facebook and Tesla.

This CopyPortfolio has gained 27.45% in the last 12 months, and carries an eToro risk rating of 5.

Rather than investing in a CopyPortfolio which invests in AI stocks, you can invest in a CopyPortfolio that uses AI to pick stocks!

One such AI-based CopyPortfolio is called ALTIA-Investment Smart Equity Portfolio.

ALTIA is an AI investment company that picks large-cap European and US equities on the basis of machine-learning. ALTIA attracted gains of 26% over the last 12 months and holds an eToro risk rating of 4. As it happens, some of ALTIA’s top stocks are big AI players like Amazon (AMZN): 9.75%, Nvidia (NVDA) and Google (GOOGL).

CopyPortfolios are a great way for beginners to benefit, free of charge, from top investment expertise. Note that, as with any trades with any broker, you will pay spread fees on any transactions conducted on your behalf. A spread fee is how all brokers have always covered their costs. The ‘spread’ is the difference between the price you are offered to buy at and the price you are offered to sell at.

3. Buy an AI ETF with eToro

Available around the world are a handful of ETFs (Exchange Traded Funds) that aim to cover AI companies. As a beginner investor, ETFs offer a low-cost, low-risk way to invest in AI. The idea is to buy in and hold for the long-term. But, with high liquidity, ETFs mean you can sell your position instantly at any time.

With eToro you can invest in the ARK Autonomous Technology & Robotics ETF (ARKQ):

AKRQ is an actively-managed ETF which invests in robotics, energy storage, autonomous vehicles and space exploration. It has $2.7 billion USD assets under management and has risen in value by 45.1% in the last year.

ARKQ boasts an expense ratio of 0.75%. An ETF’s expense ratio is an indication of how costly it is to run, and ARKQ is respectably placed: fellow AI ETFs ROBO and LOUP, for example, charge expense ratios of 0.95% and 0.70% respectively. Some ETFs offer low expense ratios because they are not actively managed. The giant SPDR S&P 500 ETF (SPY), which tracks the S&P 500, offers a low expense of 0.09%.

With ETFs, expense ratios are effectively invisible fees. They are factored into every transaction at source. The great thing about ETF expense ratios is that they are far less than those charged by traditional mutual funds, from which ETFs developed.

Features

eToro offers its own CopyTrader system. This allows you to copy expert traders free of charge. Traders willing to be copied are called ‘signal providers’. You can check out the performance stats and risk ratings of signal providers, and then dedicate a certain amount of your funds to follow their trades automatically. You can set stop losses, and terminate your involvement at any time.

Already established on the market are big copy trading platforms ZuluTrade and DupliTrade. eToro’s CopyTrader offers the ideal starting place for a beginner.

Regulation

  • Financial Conduct Authority (FCA).
  • Australian Securities and Investments Commission (ASIC).
  • Cyprus Securities & Exchange Commission (CySEC).

eToro Fees

Fee Type Fee Amount
Commission Fee 0% (for UK and European investors)
Spread Fee Variable dependent on asset
Deposit Fee $0
Withdrawal Fee $5
Inactivity Fee $10 monthly fee applies after 1 year of inactivity 

 

Pros

  • 3 ways to invest in AI with eToro.
  • eToro welcomes Australian clients, and accepts AUD as a deposit currency.
  • 20 million existing investors in 120+ countries.
  • Regulated by FCA, CySEC and ASIC.
  • CopyTrader – learn from experienced traders.
  • CopyPortfolios – invest in dynamic portfolios that trade in AI stocks.
  • Transparent fee structure.

Cons

  • MT4 or MT5 platforms not supported.

67% of retail investor accounts lose money when trading CFDs with this provider.

 

2. AvaTrade — Best MT4 & MT5 CFD Broker for AI Australia

AvaTrade is a dedicated CFD broker with a good reputation for safe investing. Established in 2006, AvaTrade is regulated in 7 global jurisdictions and has a user-base of 200,000 investors. AvaTrade offers the usual broker selection of financial instruments:

A dedicated Australian AvaTrade website is provided. AUD is accepted by AvaTrade via bank transfer or credit card.

Because AvaTrade is a dedicated CFD broker, all trades are leveraged at set rates and your account will be run on a margin basis. It is therefore advisable for the beginner to consider starting their investing journey with eToro, where you can invest in AI stocks and ETFs conventionally. Then move onto to CFDs, and the higher risk/reward on offer.

AI Investment

With AvaTrade you can access CFD trades on top AI stocks like Apple, Google and Amazon:

A standard spread fee of 0.13% applies to all stock transactions. Leverage is set at 5:1. Browse through 600+ stocks with AvaTrade.

AvaTrade also offers 60+ ETFs. One that holds some AI stock is the Vanguard Information Technology ETF (VGT). Its top three holdings are Apple (APPL), Microsoft (MSFT) and NVIDIA (NVDA). VGT boasts an average annual return of 21.6% over the last 5 years.

As a CFD broker, all ETFs available with AvaTrade are provided as ETFs. This offers the advantage that you can go short on your position (ie. bet that the value of the ETF will fall rather than rise). The disadvantage is that (tiny) overnight fees apply for every 24hr period that you are in a trade: be sure to check you know what you are getting into.

Features

AvaTrade is a favourite of investors who want to explore bolt-on platforms like:

  • MT4/MT5: long-established trader platforms.
  • ZuluTrade: copy trading.
  • DupliTrade: copy trading.
  • AvaSocial: AvaTrade’s mobile-only app for simple copy/social trading.
  • AvaOptions: AvaTrade’s own platform specialising in trading options.

Regulation

AvaTrade is regulated by the Israeli Securities Authority, the Central Bank of Ireland, the Australian Securities and Investments Commission, the British Virgin Islands Financial Services Commission, the Financial Sector Conduct Authority in South Africa, and the Financial Services Agency of Japan.

AvaTrade fees

Fee Type Fee Amount
Commission Fee NA
Spread Fee Variable dependent on asset
Deposit Fee $0
Withdrawal Fee $0
Inactivity Fee $50 per quarter after 3 months inactivity

 

Pros

  • Invest in AI stock or an AI ETF from Australia.
  • Accepts AUD.
  • Straightforward user-interface.
  • All fees clearly displayed, and good help FAQ.
  • Many advanced platform options like MT4/MT5, DupliTrade and ZuluTrade.
  • CFD options like going short and leveraging.

 

Cons 

  • CFD trading and margin account only.
  • Relatively-high non-activity fees apply.
  • Overnight fees.

71% of retail investor accounts lose money when trading CFDs with this provider.

3. Capital.com — Established Broker for AI Australia

Broker Capital.com opened an office in Melbourne, Australia in September 2021 – thus showing its commitment to Australian investors.

A CFD broker like AvaTrade, Capital.com offers a wide range of investment instruments including shares, crypto, forex, commodities and indices. Capital.com promises access to over 3,800 markets in all.

AUD via bank transfer, credit card and Apple Pay is accepted by Capital.com.

Capital.com offers leveraged trades and a margin account arrangement. Beginners to investors might be better advised to choose eToro, where you can choose to trade without leverage and a margin account.

AI Investment

With Capital.com, you can trade off AI stock or AI ETFs using CFDs.

Capital.com provides 100+ ETFs to choose from. Browse through to review a selection of AI ETFs, including the First Trust Nasdaq Artificial Intelligence and Robotics ETF and the Global X Robotics & Artificial Intelligence ETF.

One AI ETF offered by Capital.com is the Direxion Daily Robotics Artificial Intelligence & Automation Index Bull 3x Shares (UBOT). This ETF is not for the faint-hearted. It tracks the existing Global Robotics and Artificial Intelligence Thematic Index at a gearing of 300%. So if the index rises by 1 point, the ETF rises by 3 points. But if the index falls by 1 point, the ETF falls by 3 points.

Capital.com also provides an ETF that uses AI technology to invest in 30-70 US companies with high potential. This is called the AI Powered Equity ETF (AIEQ).

Features

Capital.com allows the investor to set a ‘buy when price at:’ order, which is useful. The usual stop loss and take profit point orders are available too.

Regulation

Capital.com is regulated by:

  • Australian Securities and Investments Commission (ASIC).
  • Financial Conduct Authority (FCA).
  • Cyprus Security and Exchange Commission (CySEC).

Capital.com fees

Fee Type Fee Amount
Commission Fee 0%
Spread Fee Variable dependent on asset
Deposit Fee $0
Withdrawal Fee $0
Inactivity Fee $0

 

Pros

  • CFD trades on AI stocks.
  • Good selection of AI ETFs.
  • Accepts AUD.
  • Good charting tools.
  • Powerful CFD options.
  • Free learning app called Investmate.

 

Cons

  • CFD leveraged trading only.
  • The user interface is a little confusing at first.

76.7% of retail investor accounts lose money when trading CFDs with this provider.

 

Invest in AI from Australia – Broker Price Comparison

Broker Commission Deposit Fee Withdrawal Fee Inactivity Fee
eToro 0% $0 $5 $10 monthly (after a year of inactivity)
AvaTrade 0% $0 $0 $50 per quarter (after 3 months inactivity)
Capital.com 0% $0 $0 NA

Different Ways of Investing in AI from Australia

You can invest in AI stocks direct, invest in one of the many AI ETFs available or use an eToro proprietary CopyPortfolio to have trades in AI stocks enacted automatically on your behalf. You may also be able to track down a dedicated AI index and trade it directly using CFDs – but it is advisable for beginners to stick with stocks and ETFs.

Investing in AI from Australia – What are the Risks?

The major risk of investing in AI is not the AI technology itself. AI is insinuating itself into every sphere of B2C and B2B relations, and is is unlikely to fall out of favour. AI systems manage complexity in increasingly complex consumer societies. AI offers real usefulness. AI is not a silly trend.

The major risk involved in AI investment is putting all your eggs in one basket. Do not simply invest in one AI company, even a giant one. Spread your risk. Diversify your AI holdings. You can do this by investing in an AI ETF or by using an eToro CopyPortfolio.

How to Invest in AI with eToro

Here’s your four-step strategy to invest in AI with eToro:

Step 1: Open an account with eToro

  • Go to eToro.com. You will need to fill out a brief form. Supply a username, your email and a password (you can set up 2FA authentication once you are established). To proceed, press the blue ‘Create Account’ button.

67% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Verify your account

eToro takes safety very seriously. You will need to verify your account before doing business. This means confirming who you are, and where you live.

Verification does not take long, but do not expect to begin trading immediately. Once the eToro verification team have manually checked the documents you supply, you will receive an email confirming your verified status.

You will need to upload proof of identity as well as proof of address. For proof of identity, use a scan of your passport for quickest verification. You may also use an ID card/driver’s license. Make sure your submitted ID features a photo of you.

To verify your place of residence, you can use a scan of:

  • Phone/utility bill.
  • Bank statement/credit card bill.
  • Letter from your local council/municipality.
  • Tax letter/bill.

Conveniently, eToro will accept screenshots of digital documents. A good help page is available to guide you through the verification process.

Step 3: Fund your account

Once you are verified, you can deposit funds in your account. Press the blue ‘Deposit Funds’ button at the bottom left of your screen. This brings up this box below. Choose your preferred currency, amount, means of payment – and press ‘Deposit’.

For AUD deposits, bank transfers, credit cards and PayPal are accepted by eToro. A minimum deposit of $50 USD equivalent (roughly $66 AUD) is required. eToro provides a full list online of what forms of deposit are acceptable from each country at Depositing Funds into your account FAQ. Select the ‘Payment Methods and Limitations’ pull-down FAQ.

No deposit fee applies. A currency conversion fee applies to all non-USD deposits.

Step 4: Invest in AI

You can search for AI stocks directly by using the eToro search bar at the top of your screen.

Or press the ‘Trade Markets’ button on your left toolbar to access investment instruments by type:

For AI stocks, press the ‘Stocks’ button. To explore ETFs, press the ‘ETFs’ button.

To review your purchase options, press the blue ‘Trade’ button.

Conclusion

eToro is the perfect choice for the beginner to get investing in AI stocks from Australia. With commission-free trading and a wide selection of AI stocks, eToro has attracted 20 million users on the basis of its commitment to simple, safe investing. The eToro interface is very easy to use. eToro fees are clearly laid out too. You can get hold of an AI ETF with eToro, as well as check out eToro’s proprietary CopyPortfolio system to copy trades in AI (and other) stocks.

Best AI Broker – eToro

1
$50Exclusive promotion
Our score10
  • Buy over 800 stocks with 0% commission
  • Social trading network
  • Copy over 12 million traders and investors
0% Commissionstart TradingOur score 10

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About Jules Blundell PRO INVESTOR

Jules is an experienced finance writer. He leverages his First Class degree from Cambridge University and his time at banks such as Goldman Sachs, Credit Suisse First Boston and Deutsche Bank to crunch complex financial topics for easy, educational reading.