Posted By 
Below we canvas four retirement experts and financial planners about how they or their clients can select certain ETFs to calm concerns about an inflating A.I. Bubble.
These experts were gathered by Featured.com, which has been supplying Findependence Hub with quality content for several years. It recently changed its procedure so editors like myself can request input on particular topics we think will interest our readership. The sources are all on LinkedIn, as you can see by clicking on their profiles below.
Here’s what we asked for this instalment:
Concerns about an AI bubble have investors searching for ways to protect their portfolios without missing out on growth opportunities. We are looking for exchange-traded fund strategies that balance exposure to innovation with downside protection, drawing on analysis from seasoned market professionals. These approaches range from value-weighted diversification to defensive sector allocation, offering practical options for managing risk in today’s volatile market environment.
- Buy Undervalued Dividend Stocks With Discipline
- Blend Value Equal Weight and Payouts
- Cap AI Exposure Favor Quality and Income
- Diversify Broadly Across Defensive and Alternative Hedges
Buy Undervalued Dividend Stocks with Discipline
I don’t use low-volatility ETFs at all: I build concentrated portfolios of individual dividend-paying stocks that meet strict valuation criteria. Our G@RY system scans for companies trading cheap relative to historical P/E ratios and dividend yields; then I manually curate based on fundamentals. When the AI hype cooled this spring, we added JPM and WMT on April 3rd during panic selling: both quality names with real earnings power and dividends near historical highs.
The “AI bubble” question assumes you need defensive positioning, but I see it differently after 25 years watching cycles. UnitedHealth dropped 40% last year on sentiment, not fundamentals: we bought it at sub-10 forward P/E with a 2.8% yield when everyone hated it. That’s value investing: buying durable businesses when they’re out of favor, not hedging with volatility products.
For clients worried about tech concentration risk, we simply avoid overvalued names and focus on companies with EBITDA margins, consistent cash flow, and dividend growth histories. Home Depot and PepsiCo replaced Darden after 40% gains: that’s active management, not passive ETF layering. When fundamentals are solid and yields are attractive, volatility becomes opportunity rather than risk. — Frank Gristina, Managing Partner, Acadia Wealth Advisors
Blend Value, Equal-Weight and Payouts
One way to think about positioning for 2026 in light of AI valuation concerns is not to treat it as a binary choice between “all in” or “all out” on growth and AI-linked assets, but rather as a balanced exposure strategy that manages valuation risk while preserving participation in structurally important themes.
The low-volatility approach discussed in the Findependence Hub blog is one practical building block because it tempers portfolio swings, but I view it as part of a broader allocation framework. Three additional options I like are:
- Broad indices like the S&P 500 have become increasingly concentrated in a small group of high-growth, high-multiple technology stocks. Shifting part of the allocation toward value-oriented companies with solid cash flows and more reasonable valuations helps reduce reliance on continued multiple expansion (yes, value has underperformed recently, but that is what has driven today’s valuation gap). A practical implementation in the U.S. market is the iShares S&P 500 Value ETF (IVE), which tilts exposure toward businesses where returns are more closely tied to fundamentals.
- Using an equal-weight S&P 500 allocation. An equal-weight approach naturally reduces concentration in the largest mega-cap names and redistributes exposure across the broader market. The Invesco S&P 500 Equal Weight ETF (RSP) is a straightforward way to achieve this. It keeps investors invested in U.S. equities while limiting dependence on a handful of stocks that dominate index returns.
- Adding a dividend growth strategy for stability. A dividend growth ETF such as the iShares Core Dividend Growth ETF (DGRO) adds another layer of balance. Its historical performance has been strong and has only modestly lagged the benchmark, while offering a more stable return profile. Companies with a consistent ability to grow dividends tend to have resilient cash flows and disciplined capital allocation, which can help smooth returns during periods of elevated volatility or valuation compression.
Even with these three themes in place, S&P 500 and AI-centric exposure should not be avoided. AI remains a powerful secular trend, and stepping away entirely carries its own risk. The goal is BALANCE, not exclusion. Compared with the past three years, AI and growth allocations may be more measured, while value, equal-weight, and dividend strategies help reduce volatility and drawdowns if markets become more uneven, without fully stepping away from long-term upside. — Andrius Budnikas, Chief Product Officer, Gainify
Cap AI Exposure Favor Quality and Income
By 2026, I will continue to advocate for repositioning of the exposure to AI as an input into a portfolio rather than the entire investment thesis. I support the Findependence Hub position that investing in low-volatility ETFs can provide smoothing of risk through time; however, I have come to believe in the value of factor diversification and therefore, alongside investments in growth ETFs, I prefer investments in quality and dividend focused ETFs in both the United States and Canada to provide stabilization of cash flows and reduce uncertainty associated with income expectations. In addition, I recommend to my clients to limit their exposure to AI theme investment ideas to a maximum % of their overall portfolio and rebalance quarterly, which will decrease emotional decision-making and reassure investors that returns are tied to earnings and fundamental analysis, and not narrative. — Rebecca Brocard Santiago, Owner, Advanced Professional Accounting Services
Diversify Broadly across Defensive and Alternative Hedges
One approach I recommend for 2026 to help quell investor concerns about another potential AI bubble bursting is broad-based diversification away from high-growth tech ETFs. Complementing low-volatility and defensive exposures with growth positions can help moderate returns and limit downside risk in turbulent markets. Indeed, many investors use minimum-volatility ETFs, dividend-oriented funds, and equal-weight equity ETFs to balance highly concentrated tech bets.
Vanguard’s U.S. Minimum Volatility ETF and other low-volatility products are used to limit portfolio swings, while equal-weight ETFs limit concentration in mega-cap growth stocks. Adding diversified risk across sectors such as staples and international equities will further reduce overall risk.
Precious metal exposure, represented by gold ETFs, for example, also tends to stabilize during equity drawdowns. By combining growth with diversified, lower-volatility ETFs and alternative risk-managed strategies, we can dampen a potential AI downturn while still capturing long-term returns in both Canadian and U.S. equity markets. — Ali Zane, CEO, IMAX Credit Repair & Identity Theft Lawyer
Featured.com creates community-driven content featuring expert insights. Sign up to answer questions and get published
The best strategy is to think in 10-year time horizons and to listening to the news.