One thing’s for sure when it comes to robots, they can’t panic during a heavy market sell-off like the ones investors saw the week of February 24—but can they pick the right investments during one? TD Ameritrade’s robo-advisers has stood out thus far in 2020.
Per an Investment News report, “Portfolios managed by TD Ameritrade’s Essential Portfolios stood out for capturing more of the market upside than downside so far in 2020, said David Goldstone, head of research at Backend Benchmarking.”
“Within fixed income, they are concentrated in investment-grade fixed income, which helped balance falling equity prices,” Mr. Goldstone said in an email.
According to the report, robo-advisers do best in the long term mostly implement passive investment strategies as opposed to active buying and selling. As such, during the final week of February, robo-advisers were mostly rebalancing trades and performing tax-loss harvesting trades.
“As markets fall, we would also expect that rebalancing trades will start to appear, selling equities and buying fixed income to maintain target allocations,” he said. “So far we have seen minimal rebalancing trades as a result of last week’s market volatility. Managers may be waiting for volatility to die down before executing rebalancing trades.”
“Generally, given the events last week, I find that the lack of tax-loss harvesting in many of our accounts is unimpressive,” he added.
Will robo-advisers continue to proliferate in the financial sector? Irrespective of sector, robotics should continue to experience growth, which bodes well for the Global X Robotics & Artificial Intelligence Thematic ETF (NasdaqGM: BOTZ).
BOTZ seeks to invest in companies that potentially stand to benefit from increased adoption and utilization of robotics and artificial intelligence (AI), including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles.
Additionally, BOTZ seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Robotics & Artificial Intelligence Thematic Index. The index itself captures large and mid-cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries.
- High Growth Potential: BOTZ enables investors to access high growth potential through companies involved in the ideation, design, creation, and application of programmable automated devices.
- Unconstrained Approach: BOTZ’s composition transcends the classic sector, industry, and geographic classifications by tracking an emerging theme.
- ETF Efficiency: In a single trade, BOTZ delivers access to dozens of companies with high exposure to the robotics and AI theme.
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