The ROBO Global Robotics & Automation Index ETF (ROBO US), the first ETF globally to provide targeted exposure to the robotics and automation theme, has celebrated the fifth anniversary of its launch on NYSE Arca.
Travis Briggs, CEO (US) of ROBO Global.
The fund is linked to the ROBO Global Robotics & Automation Index and was brought to market through a partnership between indexing and research company ROBO Global and white-label ETF platform Exchange Traded Concepts.
Index components are selected from a proprietary database of companies that derive all or a portion of revenues from robotics, automation and related technologies.
This can include any technology, service or device that supports, aids or contributes to any type of robot, robotic action or automation system process, software or management. Examples include unmanned vehicles, software that enables virtualized product design and implementation, 3D printers, navigation systems, and medical robots or robotic instruments.
Eligible companies must also have a market capitalization exceeding $200 million and a minimum trailing 1-year average daily volume of $200,000.
At the quarterly rebalance, the index is comprised of bellwether (40%) and non-bellwether (60%) stocks, spanning 12 subsectors from manufacturing to healthcare to sensing, with each bellwether stock having approximately double the weight of a non-bellwether stock.
Bellwether stocks are companies which derive the majority of their revenues from robotics and automation or are a market share leader.
Non-bellwether stocks are securities that have a distinct segment of their business involved in robotics and automation that is expected to drive revenues higher as such products and/or services expand.
Travis Briggs, CEO of ROBO Global US, commented, “These cutting-edge technologies, including artificial intelligence, will continue to transform the global economy. Our entire team is determined to provide investors with a portfolio that attempts to capture the growth potential of these industries.
“Our mission remains the same as it was five years ago – to provide investors turnkey access to the transformative power of robotics, automation and artificial intelligence (RAAI).”
The strategy has resonated with investors with ROBO crossing the $1 billion and $2 billion assets under management milestones in August 2017 and January 2018 respectively.
The ETF was however hard hit by the global equity market sell-off that occurred at the beginning of October. Reflecting the heightened volatility of technology stocks during the period, ROBO dropped 11.7% between 4 October and close of trading on 10 October. In contrast, the S&P 500 trimmed 4.8% over the same dates. ROBO’s AUM currently stands at just over $1.5bn.
The fund comes with an expense ratio of 0.95%. Despite the entry of several similar ETFs with lower fees, the fee level is unchanged from where it was when launched five years ago. Its main rival is the $1.9bn GlobalX Robotics & Artificial Intelligence ETF (BOTZ US) which comes with an expense ratio of 0.68%. BOTZ tracks the Indxx Global Robotics & Artificial Intelligence Thematic Index.