Here's Why You Should Invest In Robotics ETFs

Running length: 00:25:09

In this episode of ETF Spotlight, I talk with Jeremie Capron, Director of Research at ROBO Global. ROBO Global is the creator of the first index to track the global robotics, automation, and artificial intelligence industry.

Robots and AI are improving and becoming an integral part of our lives. Earlier this month, Walmart (WMT - Free Report) announced that it is expanding the use of robots in its stores to help track inventory, scrub floors and unload trucks. Food delivery robots are already here and delivery drones are being used in real-world settings.

Will we see more robots in our day-to-day lives?

Self-driving cars are no longer science fiction. Silicon Valley giants and big automakers have poured billions of dollars into these technologies. These cars have already driven millions of miles for testing. Google’s (GOOGL - Free Report) Waymo, a leader in the technology, has launched a robot taxi service in Phoenix, AZ, but at a very small scale and with human drivers for support.

Uber, another major player, had halted its autonomous car testing after a fatal accident last year that raised questions about the technology and resumed limited testing in Pittsburgh in December.

Will self-driving cars be ready for wide-scale deployment anytime soon?

Another area that has profound robotic applications is healthcare. We discuss how companies like Intuitive Surgical (ISRG - Free Report) are transforming healthcare.

We also discuss why investors should not ignore this rapidly evolving and exponentially growing space.

We then discuss the index created by ROBO Global. The company has a team of experts that looks at the entire robotics and automation landscape to identify the companies to be included in the index.

Jeremie explains the process of selection of constituents—bellwether as well as non-bellwether. He also talks about the benefits of an equal weighting approach, which largely eliminates single stock risk.

About 48% of ROBO’s assets are invested in US companies and rest in international companies. Japanese companies get about 22% weight, which makes sense since Japan has been a pioneer in robotics.

While we are familiar with companies like iRobot (IRBT - Free Report), Rockwell Automation (ROK - Free Report) and Nvidia (NVDA - Free Report), most investors do not know much about foreign companies that are at the forefront of these technologies. We talk about some such companies.

Finally, we discuss whether robots are going to take our jobs.

In addition to ROBO, the Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report), the iShares Robotics Artificial Intelligence ETF (IRBO - Free Report) and the First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT - Free Report) provide exposure to this space and are worth a look.

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