ETF Trends
ETF Trends

This year has seen another crowded field of new exchange traded funds come to market and within that group are plenty of niche funds, indicating that ETF issuers continue to slice and dice investment ideas into increasingly fine fund packages.

The Global X Robotics & Artificial Intelligence Thematic ETF (NasdaqGM: BOTZ) is one of those niche funds. BOTZ provides exposure to companies involved in the adoption and utilization of robotics and artificial intelligence (AI), including those involved with industrial manufacturing, medicine, autonomous vehicles, and other applications.

BOTZ follows the Indxx Global Robotics & Artificial Intelligence Thematic Index. The ETF, which debuted in September with the Global X FinTech Thematic ETF (NasdaqGM: FINX) and the Global X Internet of Things Thematic ETF (NasdaqGM: SNSR), holds 28 stocks with an average market cap of $8.8 billion, putting the ETF in mid-cap territory.

“BOTZ is situated in a long-term growth sector with massive upside potential. With the emerging self-driving automobile industry on the rise, the likelihood of robotics and artificial intelligence playing an active role in consumer lives in the near future is increasing daily,” according to a Seeking Alpha analysis of the ETF.

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BOTZ allocates about 23% of its weight to industrial machinery makers and over 23% of its combined weight to electronic equipment and healthcare equipment makers. BOTZ is also a play on the weak yen because Japanse stocks account for more than 47% of the ETF’s weight, more than double its allocation to U.S. stocks.

The yen slid nearly 8% last month and the Japanese economy grew at a faster-than-expected 2.2% pace in the third quarter, its third straight quarter of expansion. The growth was driven by exports, which increased 2% compared to the prior quarter. With the Japanese yen now depreciating against the U.S. dollar, export growth may continue to expand.

“Robotics and artificial intelligence research and development is growing, and products will likely begin to hit consumer markets by the end of the decade – at least in the automotive space. You can expect this industry to witness huge deals in the near future and provide opportunities you may not be able to find anywhere else. Aside from consumer tech, robotics and AI are playing an increasing role in manufacturing automation, energy production and so much more,” adds Seeking Alpha.

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