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The First Robotics ETF Reaches 5-Year Anniversary, $2B Under Management

October 18, 2018 10:00 am
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The First Robotics ETF Reaches 5-Year Anniversary, $2B Under Management

The ROBO Global Robotics and Automation Index ETF (NASDAQ:ROBO), the first exchange traded fund dedicated to the robotics investment theme, is celebrating another milestone.

ROBO, which tracks the ROBO Global Robotics and Automation Index, will soon celebrate its fifth birthday and has more than $2 billion in assets under management.

What Happened

To be precise, ROBO had $2.08 billion in assets under management at the end of the third quarter. ROBO holds 94 stocks.

“The fund, which has delivered a 68.85-percent cumulative return since inception, invests in over 80 of the most innovative companies across the globe, spanning 12 subsectors from manufacturing to healthcare to sensing,” according to Dallas-based ROBO Global.

Why It's Important

While robotics ETFs, including ROBO, are struggling this year, the long-term investment thesis for artificial intelligence and robotics remains very much intact. The global artificial intelligence, automation and robotics sector is now valued at over $200 billion, a figure that is projected to grow over the next several years.

“As automation costs decline and technology advances, applications for robotics and artificial intelligence have expanded, helping improve productivity across a range of industries. Looking ahead, the robotics, automation and artificial intelligence segment could grow to over $1 trillion by 2035,” according to ETF Trends.

Shifting uses for robots are bolstering the market's overall growth case.

“The industrial robotics market, which has traditionally represented the robotics industry and has been led by Japanese and European robotics manufacturers, is giving way to non-industrial robots, such as personal assistant robots, customer service robots, autonomous vehicles and unmanned aerial vehicles,” according to Statista.

The global robotics market could be worth as much as $500 billion by 2025.

What's Next

ROBO is reflective of the robotics industry's global nature, as over 10 countries are represented in the fund. The U.S. and Japan combine for over two-thirds of the fund's geographic exposure. The bulk of ROBO's holdings are classified as industrial or technology stocks.

Fifty-one percent of the ETF's holdings are large- and small-caps, while the remaining 49 percent are mid-cap stocks.

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