Robotics ETF Debuts Tuesday

ETF Trends

Exchange Traded Concepts will introduce the Robo-Stox Global Robotics and Automation Index ETF (ROBO) on Tuesday, the first ETF focused exclusively on the robotics and automation sub-sector.

The new ETF will track the Robo-Stox Global Robotics and Automation Index and charge 0.95% per year. Index components must have market values above $200 million and a minimum trailing 1-year average daily volume of $200,000, according to a filing with the Securities and Exchange Commission.

As for the risks associated with investing in a robotics ETF, the filing highlights, among others, the following: “Small or limited markets for such securities, changes in business cycles, world economic growth, technological progress, rapid obsolescence, and government regulation. Robotics and Automation Companies, especially smaller, start-up companies, tend to be more volatile than securities of companies that do not rely heavily on technology.

“Rapid change to technologies that affect a company’s products could have a material adverse effect on such company’s operating results.  Robotics and Automation Companies may rely on a combination of patents, copyrights, trademarks and trade secret laws to establish and protect their proprietary rights in their products and technologies. “

The filing also indicates that ROBO can invest up to 20% of its assets in companies that are not pure play robotics or automation firms.

Robotics stocks include iRobot (IRBT), Elbit Systems (ESLT) and Cognex (CGNX). Non-U.S. stocks that are featured in the new ETF could hail from Germany, Israel and Japan, among other countries.

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.

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