Robotics, AI Working Hand-in-Hand Will Propel Disruptive ETFs

For companies that can afford to implement both artificial intelligence and robotics, it can be a dichotomy of disruptive technologies that can work hand-in-hand if deployed correctly. As barriers to entry like cost begin to lower for disruptive technology, more companies could be using both as part of their core businesses, which should only propel disruptive-focused exchange-traded funds (ETFs).

“Robotics has kept pace with artificial intelligence, and its innovations have become quite practical,” a Cloud Wedge article noted. “Samsung unveiled a Bot Chef who is skilled at making you a salad on command, for example. Delta Airlines showed off an exoskeleton that can boost the strength and endurance of the human body. Robotics offers a lot of promise from the creation of artificial limbs to entire suits that can help us performs difficult tasks so much easier. Combining AI and robotics introduces interesting interplays. There are several benefits to the industry that the combination of AI and robotics can offer.”

The proliferation of artificial intelligence and robotics will only reach greater levels, especially as the cost to implement this disruptive technology falls.

“While businesses through increased demand to drive down prices will eventually make these machines affordable, for the time being (and for quite a while into the future), the application of AI and robotics as a combined unit remains too expensive to apply to routine tasks,” the article added. “As development in the field moves forward, we may see robots that work on machine learning within the next decade. The question of whether humanity is ready for the impact it will make both socially and economically is something that experts are still debating today.”

As such, investors looking for a broad ETF play in disruptive technology can look at the ARK Innovation ETF (NYSEArca: ARKK). The actively-managed ETF 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’s innovation-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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