Robotics are the future in our digital-first world so here are three great ways to diversify your portfolio for long-term growth with ETFs.
Aug. 12, 2021
The robotics revolution is upon us and I’m not talking about Rosie, the Jetsons’ trustworthy maid. Robotics do encompass the cleaning segment, like with the self-vacuuming units sold by iRobot, but they also do so much more. With robotics, human safety is one of the top benefits, as we can send robots to dangerous mining locations, inhospitable planets like Mars, and into battle via pilotless drones.
Additionally, accuracy and error minimization are highly sought-after features across all industries but specifically in medicine, wherein robots can be employed to perform precise surgery and neater stitching. The industry covers even more areas such as agriculture, electric vehicles (EVs), manufacturing, and even sex, and is estimated to be worth $178 billion by 2025.
Big data is growing at an exponential rate, with the last two years producing more data than the entirety of human history before then. Companies need to utilize AI to mine, interpret, and analyze all this data and this is one of the things that is driving growth in the AI sector, which is estimated to be valued at $360 billion by 2025. Instead of cherry-picking your investments, we present you with three ETFs that cover a broad range of industries in the robotics, artificial intelligence (AI), and automation space.
1. Global Robotics and Automation ETF
The Global Robotics and Automation ETF (NYSE: ROBO) was the first-to-market fund in the field, making its debut in 2013. It invests in roughly 90 companies across 11 robotics subsectors like healthcare, manufacturing, and computing & AI. To minimize risk, it invests mainly in large- and mid-cap companies (nearly 85% of its holdings).
Global Robotics and Automation ETF’s top 3 holdings are:
- Intuitive Surgical (NASDAQ: ISRG) develops robotic products designed to improve the clinical outcomes of patients via minimally invasive surgeries.
- Kardex Holding (SWX: KARN) is an industry partner for intralogistics services and is a big supplier of automated storage solutions and material handling systems.
- ServiceNow (NYSE: NOW), which builds cloud computing platforms to help corporations manage digital workflows for enterprise operations.
The ETF’s stock price is up over 25% over the past 12 months.
2. iShares Robotics and Artificial Intelligence ETF
The iShares Robotics and Artificial Intelligence Multisector ETF (NYSEARCA: IRBO) launched in 2018 and ‘tracks developed and emerging market companies that could benefit from the long-term growth and innovation in robotics and AI.’
The fund’s top three holdings are:
- Microstrategy Class A (NASDAQ: MSTR) is a firm that provides business intelligence, mobile software, and cloud-based services.
- ZTE Corp (SHE: 000063) is a Chinese technology company that specializes in telecommunication.
- Domo Inc (NASDAQ: DOMO) is a cloud software company that specializes in business intelligence tools and data visualization.
3. First Trust Nasdaq Artificial Intelligence and Robotics ETF
The First Trust Nasdaq Artificial Intelligence and Robotics ETF (NASDAQ: ROBT) uses the Consumer Technology Associations classification and rating system to select robotics and AI companies. These companies are then grouped into three categories: engagers, or companies offering products, services, or systems; enablers, which are companies in advanced machinery, semiconductors, machine learning, plus companies that are not pure robotics or AI plays but still add value to the industry.
The ETF’s top three holdings are:
- Illumina (NASDAQ: ILMN) which develops integrated systems for the analysis of genetic variation and biological functions
- Dynatrace (NYSE: DT) is a global technology company that provides a software intelligence platform based on artificial intelligence and automation.
- Dassault Systemes S.A (EPA: DSY) is on the Fortune 50 list and develops software for 3D product design, simulation, manufacturing and much more.
Should I buy Robotic ETFs?
Robotics offer companies efficiency, lower costs, and increased productivity. Amazon, for example, employs more than 200,000 mobile robots in its warehouse network to help it meet its growing fulfillment and delivery needs, which are a strong selling point for its Prime subscriptions.
This is the future and it covers a wide range of industries and sectors. Investing in an ETF ensures that your investment is fully diversified and your risk minimized.
Summary of ETFs
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Robotics is just one of many exciting industries you can invest in right now, find out which other sectors will help you generate long-term wealth by using MyWallSt’s list of market-beating stocks. Start your free access here.