Are Robotic ETFs The Right Choice For 2020?

Technologies like AI, Robotics, ML and IoT are fast changing the business landscape by expanding opportunities, driving revenues and enhancing efficiencies. Now the application of robots is not just limited to industrial use but a plethora of other areas like manufacturing, healthcare, defense and security, logistics, inspection and maintenance, automotive, electronics, and food and beverage. In fact, robots were the main highlights of the CES 2020 gadget show held in Las Vegas. Moreover, Walmart (NYSE:WMT) Inc. recently introduced its robot-run warehouse, Alphabot, with the aim to increase the speed and efficiency of grocery pickup service. Indian Space Research Organisation has designed a robot with the human simulation system that will be travelling to space (read: Best Thematic ETFs for 2020).

In fact, a Research and Markets report states that the global robotics market is expected to see a CAGR of 25% between 2019 and 2024.

What’s Driving the Momentum?

Robots are believed to deliver higher quality products and services in a cost and time-efficient manner. As such, the global industrial robotics market is expected to reach a value of around $24 billion by 2025. Small- and medium-scale enterprises in developing countries are rapidly turning to automation in order to meet the increasing market demand with quality products.

Professional and personal services robots are also seeing increasing demand and applications owing to growing awareness regarding the advantages of robots, increasing research and development expenditures, rising labor costs and reducing skilled workforce. Notably, the global service robotics market was valued at around $17 billion in 2019. Professional service robots have found their applications in areas including medical, defense, agriculture, logistics, inspection and maintenance, rescue and security, construction, and professional cleaning. Moreover, personal service robots are put into use in domestic and entertainment and leisure-related activities.

Robotic ETFs to Consider

We have shortlisted the following ETFs for our investors to consider:

Global X Robotics & Artificial Intelligence ETF BOTZ

The fund tracks investment results that correspond generally to the performance of the Indxx Global Robotics & Artificial Intelligence Thematic Index. Notably, the fund provides exposure to the performance of companies, which benefit from the rising adoption of AI, robotics and automation. The fund has 38 holdings with AUM of $1.54 billion. It charges 68 bps in fees (read: ETFs to Gain as Surgical Robots Rise in Popularity).

ROBO Global Robotics & Automation ETF (TASE:ROBO)

The fund invests in global companies that are driving transformative innovation in robotics, automation, and artificial intelligence (“RAAI”), including companies that create technology to enable truly intelligent systems that can sense, process, and act, and companies that apply those technologies to deliver RAAI-enabled products — including robots — to businesses and consumers. The product has 95 holdings with AUM of $1.32 billion. It charges 95 bps in fees.

First Trust Nasdaq Artificial Intelligence and Robotics ETF ROBT

The fund seeks investment results that corresponds generally to the price and yield, before the fees and expenses of the Nasdaq CTA Artificial Intelligence and Robotics Index. The product has 99 holdings with AUM of $79.6 million. It charges 65 bps in fees.

iShares Robotics and Artificial Intelligence Multisector ETF IRBO

The fund tracks investment results that correspond generally to the performance of the NYSE FactSet Global Robotics and Artificial Intelligence Index. Notably, the fund provides exposure to companies that could benefit from long-term growth and advancement in robotics and AI. The fund has 103 holdings with AUM of $68.2 million. The fund charges 47 bps in fees (read: Here's Why You Should Invest in Robotics ETFs).

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