2 ETFs to focus on Artificial Intelligence and Robotics
During the rising period of the past decade, technology stocks have pushed Wall Street higher. Although they were among the stocks that initially fell during the COVID-19 pandemic in February and March, most technology stocks have seen a remarkable return since hitting a 52-week low in late March.
It is therefore not surprising that there are dozens of exchange-traded funds (ETFs) in the technology sector in the United States, not to mention leveraged ETFs or reverse ETFs. We will examine in more detail below the evolution of the technology sector and consider two investment funds on the themes of robotics, artificial intelligence (AI) and autonomous technology.
The next generation of technology influencers
The technology sector encompasses many high-growth companies. Many stocks that investors around the world are familiar with are listed on the NASDAQ. The Nasdaq 100 index tracks the NASDAQ’s top 100 non-financial stocks.
The index includes technology giants such as Adobe Systems Incorporated (NASDAQ:ADBE),Alphabet (NASDAQ:GOOGL),Google’s parent company, Amazon.com Inc (NASDAQ:AMZN),Apple Inc(NASDAQ:AAPL),Facebook Inc(NASDAQ:FB),Intel Corporation(NASDAQ:INTC)and Microsoft Corporation(NASDAQ: MSFT),MSFTamong others. These companies have had a significant influence on our lives, especially over the past decade, and have become household names.
However, there are also new and more established companies in emerging fields such as AI, robotics and big data. This decade should see “smart” machines take an increasingly important place in personal and professional life.
At the same time, data collection and analysis are playing an increasingly important role in the business world. The Internet of Things (IoT), 5G and mobile devices are likely to contribute to the transformation of societies around the world.
With all this in mind, here are two ETFs you should study more closely:
1. EtF Global X Robotics and Artificial Intelligence
- Current price: 25.83
- 52-week range: $14.77 – 25.98
- Dividend yield: 0.25
- Expenses: 0.68% per annum, or $68 on an investment of $10,000
The Global X Robotics and Artificial Intelligence ETF (NASDAQ:BOTZ)invests in companies that could benefit from increased adoption and use of robotics and AI. These companies may include those involved in industrial robotics and automation, non-industrial robots and autonomous vehicles. The fund tracks the INDXX Global Robotics and Artificial Intelligence thematic index.
The BOTZ currently has 31 participations. The top 10 account for approximately 65% of total net assets, which amount to nearly $1.6 billion. The top five BOTZ companies are ABB Ltd (NYSE:ABB),Intuitive Surgical Inc (NASDAQ:ISRG),NVIDIA Corporation (NASDAQ:NVDA),Fanuc Corp. (T:6954)andKeyence (T:6861).).
Launched in September 2016, the fund also offers significant exposure to non-U.S. markets. Since the beginning of the year, BOTZ is up about 17%. On July 27, it reached an all-time high. If short-term profits are taken in the fund, long-term investors may consider buying the declines, especially if the price is close to $22.50.
2. ARK Autonomous Technology and Robotics ETF
- Current price: 53.76
- 52-week range: $26.19 – 54.85
- Dividend yield: N/A
- Expenses: 0.75% per annum, or $75 for an investment of $10,000
The ARK Autonomous Technology and Robotics (NYSE:ARKQ)ETFis comprised of companies capable of developing, producing or enabling autonomous transportation, robotics and automation, 3D printing, energy storage and space exploration.
L’ARKQ comprend actuellement 38 participations. Les dix premières représentent environ 55 % de l’actif net total, soit près de 320 millions de dollars.
Since the beginning of the year, the fund has increased by more than 44%. Like BOTZ, ARKQ also reached an all-time high in early July. However, it is important to note that Tesla’s weighting in this ETF is 10.17%. As a result, the daily movements of TSLA shares affect the price of ARKQ relatively strongly.
If the price drops to $50 or even $45, long-term investors can find better value in the fund.
Exchange-traded funds (ETFs) generally allow for effective and inexpensive exposure to targeted markets and sectors, such as technology. While areas such as artificial intelligence, robotics and big data are still in their infancy, those who believe in their potential for disruptive innovation may consider conducting additional research and investing in these companies and exchange-traded funds.