The Growth Potential of the Robotics ETF

Robotics and artificial intelligence is beginning to make up many facets of everyday life, and the ongoing growth and advancements in the segment has helped a robotics ETF gain a lot of momentum.

ETF Trends publisher Tom Lydon spoke with Bill Studebaker, President and CIO of RoboGlobal, at the 2017 Morningstar ETF Conference in Chicago September 6-8 to talk about the growing interest for robotics and artificial intelligence.

The ROBO Global Robotics & Automation Index ETF (NASDAQ: ROBO), the first exchange traded fund dedicated to robotics investing, has gathered $1.3 billion in assets under management, with over $1 billion of that new money coming in this year alone.

“We’ve identified an opportunity, four years ago, that we had high conviction, and now as we kind of transitioned into today, we couldn’t be more convinced,” Studebaker said. “What we’re seeing here is that there’s an undeniable inflection point. The performance capabilities, the cost curve is allowing really an explosion robotic applications that only years ago were kind of perceived as science fiction.”

The improving technologies has translated to a phenomenal growth opportunity in a relatively new segment of the market.

“We’re seeing a pretty paramount shift in their business models. Interestingly, in the last quarter, we’ve had over 80% of companies beat the consensus estimates and so you’re really seeing this manifest itself in the company’s business models,” Studebaker said, referring to the underlying index for the ROBO ETF.