Exchange Traded Concepts will introduce the Robo-Stox Global Robotics and Automation Index ETF (NasdaqGS: ROBO) on Tuesday, the first ETF focused exclusively on the robotics and automation sub-sector.
The new ETF will track the Robo-Stox Global Robotics and Automation Index and charge 0.95% per year. Index components must have market values above $200 million and a minimum trailing 1-year average daily volume of $200,000, according to a filing with the Securities and Exchange Commission.
As for the risks associated with investing in a robotics ETF, the filing highlights, among others, the following: “Small or limited markets for such securities, changes in business cycles, world economic growth, technological progress, rapid obsolescence, and government regulation. Robotics and Automation Companies, especially smaller, start-up companies, tend to be more volatile than securities of companies that do not rely heavily on technology.
“Rapid change to technologies that affect a company’s products could have a material adverse effect on such company’s operating results. Robotics and Automation Companies may rely on a combination of patents, copyrights, trademarks and trade secret laws to establish and protect their proprietary rights in their products and technologies. “
The filing also indicates that ROBO can invest up to 20% of its assets in companies that are not pure play robotics or automation firms.
Robotics stocks include iRobot (NasdaqGM: IRBT), Elbit Systems (NasdaqGM: ESLT) and Cognex (NasdaqGM: CGNX). Non-U.S. stocks that are featured in the new ETF could hail from Germany, Israel and Japan, among other countries.
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