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Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →CHAT and FTEC make different bets: CHAT is an actively managed generative-AI and technology fund, while FTEC tracks a U.S. information-technology index spanning large-, mid- and small-cap companies. FTEC has substantially lower stated annual expenses in the available disclosures, but neither fund is a whole-market investment. The available figures do not establish which has performed better through a shared recent date, so there is no evidence-based “better right now” winner here.
What each fund is designed to own
CHAT: an actively selected AI and technology theme
Roundhill describes CHAT as the Roundhill Generative AI & Technology ETF. It is actively managed: its Investment Committee selects securities rather than following a stated index. Its top five holdings on June 30, 2026 were Nvidia, SK hynix, Alphabet, Knowledge Atlas Technology and Advanced Micro Devices. Those are a dated snapshot, not a fixed lineup; Roundhill says holdings and allocations may change. Roundhill’s fund page reports a 0.75% gross expense ratio. CHAT began trading on May 18, 2023, and Roundhill says options trading is available. Roundhill’s fund page
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FTEC: U.S. information technology across company sizes
Fidelity’s summary prospectus says FTEC seeks, before fees and expenses, returns that generally correspond to the MSCI USA IMI Information Technology 25/50 Index. Fidelity says the fund uses representative sampling and normally invests at least 80% of assets in index securities. The index covers U.S. large-, mid- and small-cap companies classified in the Information Technology sector under GICS. Fidelity Covington Trust’s November 29, 2025 summary prospectus; Fidelity’s March 31, 2026 fact sheet
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“Broader” therefore means broader company-size and IT-company exposure than a targeted AI strategy, not exposure to every U.S. industry. FTEC remains a sector fund.
How their stated costs compare
| Fund | Stated annual expense | Disclosure and date |
|---|---|---|
| CHAT | 0.75% gross expense ratio | Roundhill Investments fund page, accessed October 7, 2026 |
| FTEC | 0.084% total annual operating expenses | Fidelity Covington Trust summary prospectus, November 29, 2025 |
The figures use different labels and come from different disclosures, so they should not be treated as identically defined fee measures. They nevertheless show a substantial difference in the stated expenses. Check each fund’s latest prospectus before investing: fees and fund documents can change. Lower cost is a meaningful consideration over time, but it does not determine whether a fund’s exposure fits a portfolio.
What “diversification” does—and does not—mean here
FTEC holds exposure across company sizes within U.S. information technology. That is wider than concentrating on a generative-AI and technology theme, but it still leaves the fund tied to one sector. It should not be mistaken for a broad U.S. stock-market fund.
Rank #2
Fidelity’s July 31, 2026 schedule of investments reported common stocks at 99.9% of FTEC net assets and communications equipment at 4.3%. These figures describe that dated portfolio schedule; they are not a like-for-like concentration comparison with CHAT. Fidelity Covington Trust’s July 31, 2026 schedule of investments
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CHAT’s narrower theme and active security selection create a different concentration and manager-selection trade-off. The available dated holdings information does not establish a comparable current position count, top-weight comparison or concentration measure for both funds. Don’t infer a precise holdings-level diversification advantage from the examples alone.
Rank #3
Risks to weigh beyond the AI theme
Both are equity funds exposed to technology-sector performance. A growing use of AI does not guarantee that AI-related companies or CHAT will outperform: companies can face competition, changing technology and uncertain commercial outcomes. Roundhill also flags rapid technology change, product obsolescence, regulation and competition as risks for technology investments. Roundhill’s fund page
Quick Recap
- CHAT’s trade-off: active selection can target the fund’s AI and technology theme, but results depend on those selections and the theme’s fortunes.
- FTEC’s trade-off: index exposure spans more U.S. IT companies and company sizes, but it remains concentrated in information technology and follows its index rather than an active AI mandate.
- Shared exposure: neither removes equity-market or technology-sector risk, and neither is a substitute for diversified exposure across sectors by virtue of its name or number of holdings.
How to choose between CHAT and FTEC
- Choose based on intended exposure: CHAT is the more targeted option for an active generative-AI and technology strategy; FTEC is for U.S. information technology index exposure.
- Consider the role in your portfolio: if you want an all-sector or whole-market core, neither fund supplies that on its own. Their sector focus may instead suit an allocation where that concentration is intentional.
- Account for costs and management: compare the latest disclosures, retaining the fee labels, and decide whether active selection is worth its additional stated cost to you.
- Use matched performance data: a fair return comparison needs the same start and end dates, total returns with distributions reinvested, and a clearly named benchmark. The available disclosures do not provide synchronized current returns, so they cannot support a claim that either is the better performer “right now.”
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