Revenue in the robotics market is projected to reach US$500 billion by 2025. Have you considered investing in robotics ETFs?
Defined as the branch of technology that deals with the design, construction, operation and application of robots, robotics is a sector that more and more investors are looking to sink their teeth into.
To give an idea of future growth, a Market Research Engine report forecasts that the artificial intelligence (AI) robots market is expected to exceed US$15.5 billion by 2025. The firm predicts that this segment will have a compound annual growth rate of 29 percent between 2020 to 2025.
The firm anticipates that the major driving factor for the AI robots segment will be the high adoption of robots for private use, including for entertainment purposes. The second main growth factor is expected to be support from governments worldwide as they seek to develop trendy technologies.
In terms of the overall growth the robotics industry could see, data from Statista shows that industrial and non-industrial revenue from this market will come in at nearly US$500 billion by 2025.
With the robotics market poised to thrive in the coming years, the industry is certainly garnering investor attention. Exchange-traded funds (ETFs) are a popular way for investors to get exposure to an overarching market, and there are a number of robotics ETFs available for those interested in the space.
On that note, here the Investing News Network looks at five robotics ETFs. All data comes from ETFdb.com, and was current as of August 24, 2020. These robotics ETFS have a focus on developed markets and are listed below according to their assets under management (AUM).
1. Global X Robotics & Artificial Intelligence Thematic ETF (NASDAQ:BOTZ)
AUM: US$1.73 billion
First on our robotics ETFs list is the Global X Robotics & Artificial Intelligence ETF, which launched on September 12, 2016. It has 32 holdings and is targeted towards investors who want to put money into companies that potentially stand to benefit from increased adoption and utilization of robotics and AI.
Large-cap companies make up 60 percent of its holdings, while 25 percent are small caps. In terms of sector breakdown, the ETF is largely focused on companies catering to the industrial space as they have a weightage of nearly 40 percent; meanwhile, 35 percent are companies in the technology space.
2. ROBO Global Robotics & Automation Index ETF (ARCA:ROBO)
AUM: US$1.24 billion
Second on our robotics ETFs list is an ETF that was incepted on October 22, 2013. The intention of the ROBO Global Robotics & Automation Index ETF is to provide investors with exposure to the rapidly evolving robotics, automation and AI industries.
This ETF currently has 87 holdings across 14 countries in developed and emerging markets. In terms of the market cap breakdown, 67 percent of ROBO’s picks are mid-cap and large-cap stocks, while 19 percent are small-cap companies.
3. iShares Robotics and Artificial Intelligence ETF (ARCA:IRBO)
AUM: US$178.74 million
The iShares Robotics and Artificial Intelligence ETF is the most recent ETF, launched on June 26, 2018. iShares Robotics gives investors exposure to companies that spearhead robotics and AI innovation.
This robotics ETF has 102 holdings and consists mostly of large-cap companies at 51 percent; mid-cap and small-cap companies make up 21 percent and 15 percent of its holdings, respectively. Companies involved in the technology space account for 49 percent of its holdings, while 17 percent are involved in the communications segment.
The top holdings of the iShares Robotics and Artificial Intelligence ETF are Kingsoft (HKEX:3888,OTC Pink:KSFTF), Douyo International Holdings (NASDAQ:DOYU), Mail.ru Group (MCX:MAIL), Advanced Micro Devices (NASDAQ:AMD) and Pinterest (NYSE:PINS).
4. First Trust NASDAQ Artificial Intelligence and Robotics ETF (NASDAQ:ROBT)
AUM: US$118.12 million
Launched on February 21, 2018, this ETF was designed to track the performance of companies involved in AI, robotics and automation.
The First Trust NASDAQ Artificial Intelligence and Robotics ETF has 102 holdings, with 59 percent of the picks involved in technology, and 17 percent in industrials. Roughly 42 percent of its holdings are large-cap companies, followed by mid-cap companies with 29 percent and small caps with 20 percent.
5. Direxion Robotics, Artificial Intelligence & Automation Index Bull 3X Shares (ARCA:UBOT)
AUM: US$49.46 million
The Direxion Robotics, Artificial Intelligence & Automation Index Bull 3X Shares first came to the market on April 19, 2018. The Global X Robotics & Artificial Intelligence Thematic ETF, mentioned above, is its majority holding with a weightage of 93.69 percent.
This product 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.
Which of these robotics ETFs would you invest in and why? Tell us in the comments.
Don’t forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.