The robotics industry has been continuously evolving over the recent years and has become of the fastest-growing industries worldwide. The industry’s growth is mainly driven by rapid developments in machine learning and sensor technologies, beside availability of more affordable electronic components like CPUs.
Artificial intelligence (AI) and robotics are making machines smarter and more efficient, enabling them to perform sophisticated assignments within no time and high accuracy. The Robotic industry has already entered and strengthen its foothold in multiple sectors, ranging from defense and healthcare to advertising and customer services. For instance—use of drones and unmanned weapons in military, robot vacuum cleaners in households, and nanorobots in the field of biotechnology—are just few examples that underline the significance of the industry in the modern era.
The robotics revolution has massive growth potential across a range of sectors. Specially, post-COVID-19 pandemic, governments and business owners are in quest of ways for smooth running of their operations while controlling spread of the virus. In such cases, robotics is playing a great role in limiting the spread of virus. A relatable application in the ongoing pandemic is use of robots to deliver food and medicines to infected patients under quarantine in hospitals.
Demand for online services has increased amid COVID-19 crisis, which has resulted in the dominance of AI and robotics. According to a recently published report by Analytics Insight, the AI market is expected to see a compound annual growth rate (CAGR) of 29 percent, which means it is estimated to hit $152.9 billion in 2023, significantly higher when compared to $42.8 billion last year. Separately, Market Research Engine also forecasted CAGR of 29 percent per annum for the industry between 2020-2025, citing significant increase in use of robots by private customers as the main driving force, followed by support from governments globally for developing trendy technologies.
Data from Statista shows that the combine revenue from both industrial and non-industrial operations of robotics market is expected to touch $500 billion by 2025. In short, we can say that the current era presents massive opportunities for the industry.
The robotic industry has certainly been catching the eyes of investors, as the market continue to boom. AI and robotics Exchange-traded funds (ETFs) can be a decent pick for investors optimistic about the industry’s growth potential but doubtful about which companies to invest in. Robotics ETFs consists of a set of companies focusing AI and robotics, allowing investors to contribute to the growth of those companies and enjoy their profit without the difficulty of separating winners and losers in the industry.
There are several robotics ETFs available for people trying to invest their money in the industry. Some of the notable robotics ETFs include Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ), ARK Autonomous Technology & Robotics ETF (BATS:ARKQ), iShares Robotics and Artificial Intel Mltsctr ETF (NYSEARCA:IRBO), ROBO Global Robotics and Automation Index ETF (NYSEARCA:ROBO), and First Trust Nasdaq Artificial Intel and Robtcs ETF (NASDAQ:ROBT), among many others.
We will discuss few of the aforesaid robotics ETFs. First on our list is Global X Robotics & Artificial Intelligence ETF (BOTZ) that comprises of companies falling under the automation and robotics space worldwide. The ETF, launched in September 2016, has 32 holdings and focus investors trying to spend on the firms, which are ready to benefit from utilization of AI and robotics.
The top 10 companies represent 60 percent of its holding, while the rest of them are small caps. The fund’s top 3 holdings include semiconductor company NVIDIA Corp. (NASDAQ:NVDA), robotic products maker Intuitive Surgical Inc. (NASDAQ:ISRG), and provider of power and automation technologies ABB Ltd. (NYSE:ABBN). An analyst at Morningstar, Alex Bryan states in a research note that comparatively stricter requirements for inclusion in the ETF makes BOTZ one of the better choices for exposure to AI and robotics.
BOTZ share price is up more than 50 percent over the past year, and gained about 32 percent so far this year, which shows the fund did quite well in the near past. The 52-week range of the fund is $14.77-$29.06, while its net assets stands at $1.78 billion. The ETF offers an annual dividend yield of 0.35 percent. Looking at the stats, it seems the fund is expected to perform well in the coming months. Consensus long-term profit growth predictions presented in Morningstar Direct also suggests the market has similar growth forecasts for BOTZ.
Next in the list is ARK Autonomous Technology & Robotics ETF (ARKQ), which offers exposure to the innovative technology from AI and robotics sector. The ETF has outperformed both its AI peers and S&P 500 that makes it a very attractive choice for investors looking to diversify their portfolio by adding innovative tech companies in their list. The actively managed ETF and its recent performance offers reasonable basis for investing in the fund, which consists of 39 companies with Tesla Inc. (NASDAQ:TSLA) on the top representing 10.6 percent of the fund overall shares.
ARKQ has jumped more than 60 percent over the past year and has outperformed rivals including Global Robotics and Automation Index ETF and iShares Robotics and Artificial Intelligence ETF by at least 48 percent. The fund’s net assets stand at $600.8 million. Looking forward, we just want to add that momentum is one of key indicators of a stock’s performance in future.
The last one in the list is iShares Robotics and Artificial Intel Mltsctr ETF (IRBO). The ETF, launched in June 2018, comprises 102 holdings and most of them are large-cap companies that accounts for 50 percent of the fund. Comparatively, mid and small cap companies represent 36 percent of the ETF. Overall, companies involved in the tech sector represent 49 percent of the fund, while 17 percent belong to the communication sector.
Xiaomi Corp. (1810: HKG), DouYu International Holdings Ltd. (DOYU), and Mail.ru Group Ltd. (MAIL) are the top three holdings of the fund. IRBO has surged more than 40 percent over the last year. The total assets of the fund stand at $189 million.
By looking at the stats of robotics ETFs, it can be predicted that the market is set to generate massive revenues in future as more firms realize that robots can be used in their operations.
Tags: robotics, Artificial intelligence, AI, COVID-19, Global X Robotics & Artificial Intelligence ETF, BOTZ,ARK Autonomous Technology & Robotics ETF, ARKQ, iShares Robotics and Artificial Intel Mltsctr ETF, IRBO
