The idea of a robotic taxi picking you up and taking you to your intended destination is not far from now—not far as in about two years from now. It’s hard to fathom, but in a world where companies like Tesla are already experimenting with autonomous vehicles, the idea is a lot closer to reality than we thin, which is a plus for ETFs like the Global X Autonomous & Electric Vehicles ETF (NYSEArca: DRIV).
“Robotaxi is not that far away,” said self-driving technology supplier Mobileye CEO Amnon Shashua. “We are targeting early 2022.”
Shashua believes that the first wave of self-driving vehicles will not actually target the consumer base first, but cab services. That’s especially the case if the technology can come under cost control—of course, the lower, the better.
“When you think about the cost of the technology—the self-driving system—today it’s somewhere between $15,000 – $40,000 per car,” Shashua said. “That’s O.K. for a robotaxi. It’s not O.K. for a consumer. But if you bring it down to about $5,000, which we believe we can do … by 2025, then it starts becoming interesting at the consumer level.”
DRIV seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Autonomous & Electric Vehicles Index.
- High Growth Potential: DRIV enables investors to access high growth potential through companies critical to the development of autonomous and electric vehicles – a potentially transformative economic innovation.
- Unconstrained Approach: DRIV’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging technological theme.
- ETF Efficiency: In a single trade, DRIV delivers access to dozens of companies with high exposure to the autonomous and electric vehicles theme.
For a broad market play on disruption, investors can look at the ARK Autonomous Technology & Robotics ETF (NYSEARCA: ARKQ). ARKQ seeks to provide investors with:
- Exposure to Innovation: Aims for thematic multi-cap exposure to innovation across sectors.ARK believes the securities held in ARKK present the best risk-reward opportunities from ARK’sinnovation-based themes.
- Growth Potential: Aims to capture long-term alpha+ with low correlation of relative returns to traditional growth strategies and negative correlation to value strategies.
- Diversification: Offers a tool for diversification due to little overlap with traditional indices. It can be a complement to traditional value/growth strategies.
- Research: Combines top-down and bottom-up research in its portfolio management to identify innovative companies and convergence across markets.
- Cost Effectiveness: Provides a lower cost alternative to mutual funds with true active management in an Exchange Traded Fund (ETF) that invests in rapidly moving themes.
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