Disruptive technologies can encounter headwinds over the course of their evolutions, but that doesn’t always mean long-term negativity. Take the case of robotics investments. The coronavirus pandemic could have been a problem for the group, but the Global X Robotics & Artificial Intelligence Thematic ETF (NasdaqGM: BOTZ) was a stellar performer last year.
BOTZ, which is one of the dominant funds in this category, 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.
“Over the course of the pandemic, businesses increasingly turned to robotics as a viable solution to protect consumers and employees – delivering goods and essentials, disinfecting high-touch areas, or providing concierge-like services – to limit human-to-human interactions,” writes Global X analyst Pedro Palandrani.
BOTZ Bets Merited in 2021
A Seeking Alpha article by Michael Fitzsimmons referenced a MarketsandMarkets research report that said:
“The global artificial intelligence market size was valued at the US $39.9 billion in 2019 and is expected to grow at a compound annual growth rate (‘CAGR’) of 42.2% from 2020 to 2027. The continuous research and innovation directed by the tech giants are driving the adoption of advanced technologies in industry verticals, such as automotive, healthcare, retail, finance, and manufacturing.”
The Googles and Amazons of the world are already locked in a battle of who can utilize disruptive tech like A.I. to the fullest extent in their business models, which can only boost the space even further.
Integral to the long-term BOTZ thesis is that demand for robotics aside from industrial robots, such as those working in warehouses, is booming.
“Yet robotics goes beyond the industrial segment today, with penetration increasing in multiple segments. In fact, professional service robots in areas such as logistics, cleaning, medical, inspection, maintenance, and others are expected to grow to 240,000 units by the end of 2020, up 38% from 2019,” according to Palandrani.
The robotics industry has proven its mettle amid the Covid-19 pandemic with machines taking the place of humans in order to stave off further infections from the virus. That said, a recent Robotics & Automation News article identified additional trends that can only further the expansion of the robotics industry–good news for ETFs like BOTZ.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.