Investing in Robots (ROBO, DDD, IRBT, OII, DE)
Have you ever wanted to invest in your own robot? Maybe a maid to clean your house like Rosie from The Jetsons?
The idea sounds far-fetched and it may be in 2013, however there are robotics being used all around the globe by individuals and corporations to improve production and output.
The ROBO-STOX Global Robotics & Automation ETF (NYSE: ROBO) was launched this week and offers investors the first opportunity to invest money in robot-related companies.
Related: ETF Outlook for October 30, 2013
According to the ETF provider, ROBO tracks the first index to benchmark the value of robotics, automation, and related technologies. Because there are only a few pure-play robotics companies the index expands to include companies that have ties to the above-mentioned niche sectors.
There are currently 77 stocks that make up the ETF with 20 of them considered the bellwether companies.
Along with the names investors would assume are in a robotics ETF, there are a few names that may stand out. Energy company, Oceaneering (NYSE: OII) and machinery maker Deere & Co. (NYSE: DE) are two such names that are not often tied to robotics.
A positive is that the largest holding in the ETF only makes up 2.2 percent of the allocation, giving investors diversification in the area.
The U.S. accounts for 36 percent of the portfolio with Japan making up 25 percent. Because the companies are often narrowly focused, 80 percent of the stocks in the ETF fall into either the small-cap or mid-cap asset class.
How much money ROBO is able to attract and how well it will perform is yet to be seen, but it sure will raise some eyebrows in the coming weeks. From a pure investment viewpoint the makeup of the ETF looks attractive and the only potential red flag is the above-average expense ratio of 0.95 percent.
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