Like other growth-oriented ETFs, the Global X Robotics & Artificial Intelligence Thematic ETF (NasdaqGM: BOTZ) was punished during the August broader market retreat, but there’s still plenty of compelling long-term opportunity with this robotics fund.
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,” according to Global X.
Robotics and artificial intelligence are making machines smarter and more capable than ever before, allowing robots to take on increasingly sophisticated tasks for faster and more accurate production. Several sub-groups of the artificial intelligence and robotics spaces could be major drivers of the themes’ returns in the coming years, including industrial robots.
“Scores of academic studies and industry-level data point suggest the world is becoming increasingly automated and that robotics applications are developing at a fevered pitch,” according to Nasdaq. “For BOTZ, one driver is increased demand for robots. If that isn’t realized, the investment thesis is weakened. Fortunately, demand is quite robust.”
Bank On BOTZ
Rising corporate and government security needs also bode well for various artificial intelligence applications and advancements in AI are expected to speed adoption of robotics.
BOTZ is considered a thematic ETF. A thematic approach includes investments that stand to benefit from structural change driven by demographic and technological changes.
“Given the sophisticated array of components, parts, and technology associated with robotics, meaning developers have to source products all over the world in some cases, it would be reasonable to expect that demand was hampered in the second quarter as the US/China trade imbroglio heightened,” according to Nasdaq. “Price action in BOTZ suggests as much, but some data points indicate the ETF may have been punished too severely.”
Robotics and artificial intelligence are making machines smarter and more capable than ever before, allowing robots to take on increasingly sophisticated tasks for faster and more accurate production. Several sub-groups of artificial intelligence and robotics spaces could be major drivers of the themes’ returns in the coming years, including industrial robots.
“The RIA said in June 2019 orders of industrial robots in North America for Q1 2019 declined slightly in comparison with the first quarter of last year,” said the RIA. “From January through March 2019, North American companies ordered a total of 7,876 robots worth $423 million, said the RIA. That’s 3.5% fewer units and 3.2% less in value than in the first quarter of 2018.”
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