The Global X Robotics & Artificial Intelligence ETF invests in an index of companies that stand to benefit from the increased adoption of automation, robotics and artificial intelligence.
Part of the Global X suite of niche thematic ETFs, BOTZ’s top holdings include NVIDIA, Keyence Corp and Mitsubishi Electric. At 68 basis points, the BOTZ management fee is high for passive funds, but niche products aren’t designed to be core portfolio products for set-it-and-forget-it investors. Micro-sector funds are geared for medium-term tactical wagers of weeks or months.
Investors might also consider the actively-managed ETFs from Ark Invest. The funds cost a bit more, but Ark’s team of stock pickers has a decent track record of beating the market. In the past three years, the ARK Industrial Innovation ETF (ARKQ) has significantly outperformed BOTZ, as has ARK’s flagship Innovation ETF (ARKK) and the ARK Next Generation Internet ETF (ARKW).
Skeptics of active investing might argue that ARK’s portfolio team has been lucky rather than good, in which case BOTZ provides exposure to a fast-growing slice of the market at a price that’s cheaper than rivals like the ROBO Global Robotics and Automation Index ETF from Exchange-Traded Concepts, which invests in man of the same companies but charges a significantly higher fee. For targeted tech exposure at a lower price, there’s also the Invesco S&P SmallCap Information Technology ETF (PSCT) or the iShares Exponential Technologies ETF (XT).
For broad-based technology exposure, long-term investors can look at low-cost technology funds like VGT, FTEC or XLK.