What We Know About Morningstar's AI-Diversification ETF List

Morningstar has published a list identifying six exchange-traded funds that investors can use to reduce concentrated exposure to artificial-intelligence stocks, according to the outlet's report, "6 ETFs To Diversify Away From AI".

What did Morningstar's report cover?

Morningstar's piece, titled for its roster of six funds, frames the ETFs as tools for investors whose portfolios have grown more dependent on a small group of technology and AI-linked companies than they may have intended, per the outlet. The full list of named funds, their holdings, and Morningstar's selection methodology are detailed in the original report, linked above, which readers should consult directly before making any allocation decisions.

Why are investors looking to diversify away from AI stocks?

Widely used U.S. stock benchmarks have grown increasingly weighted toward a handful of technology and AI-related names in recent years, a structural feature that can leave index investors more exposed to a single theme than a traditional "broad market" label suggests, according to Morningstar's reporting. Funds built around sectors outside technology are one response to that imbalance, since they hold companies whose earnings are not primarily tied to AI infrastructure, chips, or software spending.

How does a utilities ETF fit into an AI diversification strategy?

One example of a non-technology sector fund is the Vanguard Utilities ETF, ticker VPU, which tracks U.S. utility companies, according to HTT News's earlier explainer on the fund. Utility stocks sit in a sector separate from the technology and communications groupings that now contain most AI-exposed companies, which is why utilities funds are among the categories investors consider when trying to limit overlap with AI-heavy indexes.

What terms do investors need to know?

Concentration risk — the exposure an investor takes on when a large share of a portfolio's value sits in a small number of stocks or one industry theme, rather than being spread across many sectors.

Sector ETF — an exchange-traded fund that holds a basket of companies from a single industry, such as utilities, health care, or energy, rather than the broad market.

Benchmark index — a standard index, such as the S&P 500, that funds are measured against; benchmarks can themselves become concentrated in a handful of large companies even though they are marketed as diversified.

What should investors do with this information?

Morningstar's list is a starting point, not a personalized recommendation, and the outlet's full report should be read before any fund is bought or sold. Investors concerned about AI concentration in their own holdings can check a fund's sector breakdown, available through most brokerage platforms or fund-provider websites, to see how much weight technology and AI-linked names already carry before adding a diversification fund on top.