The stock market continues to show signs of embracing the technological age. IPOs for the most recognizable names in tech, from Facebook to Twiter, were a sure sign of things to come. But the steady adoption of robotics and artificial intelligence-tracking ETFs, or exchange-traded funds, which track the value of indexes of industry-related securities, is perhaps the greatest sign that the marriage between the tech sector and the markets is no fad.
This past Thursday, February 22nd, the First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT) made its debut, making it the third ETF of its kind to hit the markets. It is also currently the cheapest of the three ETFs which have been made available to investors, and those who understand the seemingly unstoppable growth trend which the robotics and AI fields are projected to follow should reach a similar conclusion about First Trust: value.
Our fund is really designed to accomplish a few things. One is to give exposure to the robotics as well as AI space, which we think is one of those longer-term secular themes that’s going to really change a lot of other technologies and parts of everyday life such that 10 years from now we’ll take them for granted.
It’s a very true statement, that in a matter of years these technologies are more likely than not to be ingrained in everyday life. While this melding of technology and our daily operations may have snuck up, and will continue to sneak up, on those who aren’t analyzing the robust growth of the tech sector, savvy investors would be wise to understand the value of getting in on this trend in the form of ETFs.
Such a sentiment is no blind analysis, either. One must only look at the performance of the other two robotics and AI ETFs to understand the likelihood of First Trust performing well. Those two examples are the ROBO Global Robotics & Automation Index ETF and the Global X Robotics & Artificial Intelligence ETF.
Global X, which goes by the ticker BOTZ, saw a 66% return over a year’s time, and took in $650 million from investors in January alone, a more-than-solid number which signals the widespread adoption of these tech ETFs in the marketplace.
Six hundred fifty million dollars in a month is a lot for a thematic ETF. … But thematic ETFs are gaining acceptance, particularly since some of them have delivered excellent performance of late.
Meanwhile, ROBO saw a nearly 50% return between January 2017 and February 2018, another impressive number. Those who believe these trends are going to mirror themselves in the latest robotics and AI ETF, First Trust (ROBT), now have the chance to get in before the index blows up like the two ETFs that predate it.