Robotics ETF Taps Growth In Manufacturing, Drones, Other Areas – Investor’s Business Daily

Robo Global Robotics & Automation ETF holds about 80 stocks in manufacturing and other types of robotics. (salman2/stock.adobe.com)

The field of robotics has captured the imagination like no other industry, as companies develop machines that once were the stuff of science fiction.

Today, robotics are expanding in manufacturing, where they first got a foothold. In the military, drones are now in every battalion and are used in naval warfare. Robo Global Robotics & Automation (ROBO) ETF captures that wave of innovation through a portfolio of about 80 companies either developing or using robotic technology.

Those companies include names in 3D printing, health care, energy, consumer products and other industries. With such a large portfolio, many of the ETF's components are only partially involved in robotics, while others could be regarded as pure plays. The firm says 40% of the fund consists of "bellwether" companies that are leading robotics companies and the rest are firms "that enable robotics/automation with growing revenue contributions."

For example, Nvidia (NVDA) is making strides in the field of self-driving cars but its main business is graphics chips. Intuitive Surgical (ISRG) pioneered robotic-assisted surgery and has been one of the better-performing stocks in the ETF this year.

IRobot (IRBT) is best known for vacuum cleaning and pool cleaning robots. AeroVironment (AVAV) makes drones for industrial and military use, but has other businesses such as electric-car chargers. Cognex (CGNX) makes electronic vision equipment for industrial inspection.

Advances in robotics are accelerating, as digital technology makes it increasingly possible to automate functions with computers. The market for robotics and automation is expected to grow from $64 billion to $1.2 trillion, according to research noted in Robo Global's website. Experts also see a 17.4% compounded annual growth rate in service and consumer robotics from 2015 to 2020.

Robo Global Robotics & Automation is the sole ETF product from Robo Global ETFs, a Dallas-based firm. All components are about equal in weighting of 1% to 2% each. By market capitalization, about 23% of the portfolio is made up of big-cap companies, 37% midcap and 40% small cap.

It is not the only robotics ETF, however. Global X Robotics and Artificial Intelligence (BOTZ) is a newer ETF; it started trading in September. It has fewer than 30 stocks, many of them are in Robo Global Robotics. The ETF, which started trading in October 2013, has surged more than 50% from a low in February 2016. It broke out of a base in December but is now having trouble maintaining support at its 50-day moving average.

RELATED:

This Cloud-Computing ETF Is Loaded With FANG Stocks

10/21/2016 The push to hike the minimum wage has McDonald's, Domino's and other restaurants adding robots and self-serve kiosks to serve...

10/21/2016 The push to hike the minimum wage has McDonald's, Domino's...

See the original post here:

Robotics ETF Taps Growth In Manufacturing, Drones, Other Areas - Investor's Business Daily