A small group of fund managers is using AI-managed ETFs to automate research and stock selection, betting that algorithms can process data faster and avoid human emotion and cognitive bias. Fewer than half-a-dozen such funds collectively manage about $30 million, compared with nearly $17 trillion across the ETF industry. Their early returns have generally exceeded the S&P 500, although advisers and analysts warn that short track records, higher fees and performance during a downturn remain untested. AI-enhanced ETFs, which use artificial intelligence for quantitative analysis or risk monitoring while retaining human oversight, are becoming more common. Mercer found that 91% of surveyed asset managers planned to increase their use of AI-based portfolio-management tools this year.