5 Robotics ETFs for Investors

- February 13th, 2019

Revenue in the robotics market is projected to reach US$500 billion by 2025, making it an attractive industry for investment opportunities.

One of the verticals of technology that is projected for major growth in the coming years is robotics, with its applications increasingly becoming involve multiple sectors and industries.

As Oxford puts it, robotics is a branch of technology that deals with design, construction, operation and application of robots.

A Market Research Engine report forecasts that the artificial intelligence (AI) robots market is expected to exceed US$12 billion by 2024. The firm predicts that this segment will witness a compound annual growth rate of 29 percent between 2018 to 2024.

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Further, it was said that the major driving factors of the AI robots segment will be the high adoption of robots for private use, including entertainment purposes. The second factor of growth is attributed to the support from governments worldwide as they seek to develop trendy technologies.

In terms of the overall growth the robotics industry will see, data from Statista shows that revenue from this market, both industrial and non-industrial, will be worth nearly US$500 billion by 2025.

With the robotics market poised to thrive in the coming years, the industry is certainly garnering investor attention. While investing in a specific company is likely the obvious choice, exchange-traded funds (ETFs) are a popular way for investors seeking to invest in an overarching market rather than a specific company.

On that note, here the Investing News Network looks at the five robotics ETFs, which are from the ETFdb.com. These robotics ETFS have a focus on developed markets and are listed as per the date of inception. All data below is current as of February 13, 2019.

1. Robo Global Robotics & Automation ETF (ARCA:ROBO)

First on our robotics ETFs list is an ETF that was incepted back oOctober 22, 2013. The intention of the Robo Global Robotics & Automation ETF was created to provide investors access to rapidly evolving robotics, automation and AI companies.

This ETF currently has 88 holdings across 14 countries in developed and emerging markets. In terms of the market cap breakdown, 33 percent of Robo’s picks are mid-cap and large-cap, while 19 percent are small-cap.

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Robo’s top holdings are Keyence (TSE:6861), iRobot (NASDAQ:IRBT), Cognex (NASDAQ:CGNX), IPG Photonics (NASDAQ:IPGP) and FLIR Systems (NASDAQ:FLIR).

2. Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ)

Second on our robotics ETFs list list is Global X Robotics, which had its inception back on September 12, 2016. This ETF has 37 holdings and is targeted towards investors who want to invest in companies that potentially stand to benefit from increased adoption and utilization of robotics and AI.

Large cap companies make up 60 percent of the holdings while 25 percent of the picks are small cap. In terms of the sector breakdown, the ETF is largely focused on companies catering the industrials space as they have a weightage of 46 percent, while 30 percent are companies in the technology space.

Intuitive Surgical (NASDAQ:ISRG), Mitsubishi Electric (TSE:6503), Keyence (TSE:6861), ABB (VTX:ABBN) and Fanuc (TSE:6954) make up the top five holdings.

3. First Trust NASDAQ Artificial Intelligence and Robotics ETF (NASDAQ:ROBT)

This ETF was “designed” to track the performance of companies involved in AI, robotics and automation and had its inception on February 21, 2018.

First Trust ETF has 92 holdings with 59 percent of the picks involved in technology, while 16 percent make up industrials. Roughly 35 percent of the holdings are large-cap companies, followed by mid-cap companies with 34 percent and 22 percent of the holdings being small cap.

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Rounding out the top five holdings in this ETF include Xilinx (NASDAQ:XLNX), ServiceNow (NYSE:NOW), Appian (NASDAQ:APPN), iRobot (NASDAQ:IRBT) and Ciena (NYSE:CIEN).

4. Direxion Robotics, Artificial Intelligence & Automation Index Bull 3X Shares (ARCA:UBOT)

Direxion ETF had its inception on April 19, 2018 and has the Global X Robotics & Artificial Intelligence Thematic ETF (NASDAQ GM:BOTZ) as its majority holding with a weightage of 93.69 percent.

The ETF tracks the Indxx Global Robotics and Artificial Intelligence Thematic Index, which provides exposure to public companies in developed markets that could potentially benefit from the adoption and utilization of robotics and AI.

5. iShares Robotics and Artificial Intelligence (ARCA:IRBO)

The iShares Robotics and Artificial Intelligene ETF is the most recent ETF, which was incepted on June 26, 2018. iShares Robotics gives exposure to companies that spearhead robotics and AI innovation.

This robotics ETF has 91 holdings and consists mostly of large cap companies at 45 percent. Meanwhile mid-cap and small-cap companies make up 24 percent and 16 percent of the holdings, respectively. Companies involved in the technology space makes up 58 percent of the holdings while 18 percent are involved in the communications segment.

Cloudera (NYSE:CLDR), Snap (NYSE:SNAP), Stratasys (NASDAQ:SSYS), CEVA (NASDAQ:CEVA) and Netflix (NASDAQ:NFLX) are the top holdings of iShares Robotics ETF.

Which of these robotics ETFs would you invest in and why? Tell us in the comments.

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Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.

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