The shift toward “physical AI” — the marriage of intelligence and hardware — is fueling a massive surge in both performance and fund flows for the ROBO Global Robotics and Automation Index ETF (ROBO ). As AI moves beyond digital chat boxes into physical hardware, the addressable market has exploded, and investors are capitalizing on this growth opportunity in robotics.
ROBO’s assets under management reached $1.7 billion this week, lifted by a significant $452 million year-to-date increase as of February 26. Notably, $255 million of that increase came from direct flows, while the remainder highlights the fund’s strong recent performance.
The performance gap between robotics and the broader market is widening. For the one-year period trailing February 25, ROBO returned 37.0% — more than double SPY’s 18.0% gain. The momentum has only accelerated in 2026, with ROBO climbing 14.8% YTD while the broader market has largely held steady, up just 1.7%.
See more: Midway Through the Robotics Earnings Season: Discipline Rewarded, Recovery Broadening
Advisors are leading the charge into this sector. Recent VettaFi survey data shows that 74% of advisors already have robotics or AI exposure in their client portfolios, with another 19% actively looking for an entry point.
Importantly, while many investors worry about valuations in the space, ROBO’s multiples remain muted compared to the 2021 peak. The fundamental health of the index is robust: 95% of companies in the index are projected to be profitable this earnings season.
Macro Drivers for Robotics Investors
This demand is underpinned by a persistent global labor shortage. Domestic robot shipments in the U.S. are projected to reach a historical high of 40,000 units in 2026 to bridge these gaps, positioning robotics as a strategic necessity. Notably, in the private sector, global robotics funding reached a staggering $10.3 billion in 2025 — its highest level in four years.
Furthermore, as the U.S. prepares to introduce a National Robotics Strategy in 2026, automation is increasingly recognized as a critical pillar of national security, signaling the importance of leadership in robotics.
ROBO invests in global companies driving transformative innovations in robotics, automation, and artificial intelligence (RAAI). The fund’s top holdings as of February 25 include Teradyne (TER), IPG Photonics (IPGP), Fuji (6134:NGO), Jenoptik (JEN GR), as well as Fanuc (6954:TKS).
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