For those wondering, the robotics and artificial intelligence investment themes are gaining momentum. Fortunately, those themes are accessible via exchange-traded funds, including the Global X Robotics & Artificial Intelligence ETF (NASDAQ: BOTZ).
BOTZ is up nearly 26 percent year to date, a performance that easily surpasses the returns offered by traditional industrial and technology ETFs, sectors where artificial intelligence and robotics often reside. BOTZ, which debuted in September, tracks the Indxx Global Robotics & Artificial Intelligence Thematic Index.
While BOTZ and rival robotics ETFs may be viewed by critics as niche funds and too narrowly focused, research suggests the robotics investment theme is credible and has the potential to deliver for investors in the years ahead.
“We view robotics & AI as a transformational theme because its disruptive force is not limited to industrial manufacturing,” said Global X in a recent research piece. “Health care is one non-industrial segment that is rapidly adopting robotics technology. Companies such as Intuitive Surgical are pioneering robotic-assisted surgery in an effort to improve patient outcomes.”
Holdings And Weights
Intuitive Surgical, Inc. (NASDAQ: ISRG) is the largest of the 28 holdings in BOTZ at a weight of 8.1 percent. The ETF’s top 10 holdings combine for two-thirds of its weight. Everyday uses of artificial intelligence and robotics are not limited to the healthcare arena.
“Although militaries remain the predominant users of drone technology, commercial usage is accelerating as firms incorporate drones into parcel delivery, agriculture, inspections, and emergency response,” said Global X. “According to the FAA, commercial drone usage is expected to grow 10-fold from 2016 to 202.”
BOTZ is a global ETF. In fact, U.S. stocks represent just over 21 percent of the fund’s lineup, less than half the 48.2 percent allocated to Japan. Overall, nine countries are represented in BOTZ, all of which are developed markets.
Data suggest investors are flocking to the ETF. Earlier this month, BOTZ topped $100 million in assets under management, a figure that has since swelled to over $156 million. That means the ETF has more than tripled in size since the end of the first quarter.