Among thematic exchange-traded funds, two of the most popular focus on the artificial intelligence and robotics investment themes. At least one ETF issuer thinks there's room for another artificial intelligence and robotics fund.
Illinois-based First Trust on Thursday plans to launch the First Trust Nasdaq Artificial Intelligence and Robotics ETF. That ETF will trade on the Nasdaq under the ticker “ROBT.” The new First Trust ETF will track the Nasdaq CTA Artificial Intelligence and Robotics Index.
“The index, which is developed by Nasdaq and the Consumer Technology Association (“CTA”), is designed to track the performance of companies engaged in artificial intelligence (“AI”), robotics and automation,” according to a statement from First Trust.
The First Trust Nasdaq Artificial Intelligence and Robotics ETF is entering a small, though competitive part of the ETF landscape. The ROBO Global Robotics & Automation Index ETF (NASDAQ: ROBO), the first dedicated robotics ETF, topped $2 billion in assets under management last month and now has $2.28 billion in assets. ROBO debuted in October 2013.
The Global X Robotics & Artificial Intelligence ETF (NASDAQ: BOTZ) turns two years old in September and that ETF has $2.29 billion in assets under management. BOTZ tracks the Indxx Global Robotics & Artificial Intelligence Thematic Index.
The new First Trust ETF could make inroads against its established rivals with a lower fee. BOTZ is the cheaper of the two existing robotics ETFs with an annual expense ratio of 0.68 percent, or $68 on a $10,000 investment. The First Trust statement doesn't mention an expense ratio for ROBT.
A Bet On The Future
Investors are embracing robotics ETFs due in part to an expected boom in demand in the years ahead for artificial intelligence and robotics technologies. An array of sectors, including healthcare, industrials and technology, are expected to increase use of robotics platforms and technologies in the coming year.
“Many of the technological developments taking place in AI, robotics, and automation are astounding, and we believe there are strong incentives, in both the public and the private sector, to find ways to harness these innovations,” First Vice President Ryan Issakainen said in the statement. “As a leading provider of thematic ETFs, we are excited to offer ROBT as a way for investors to gain exposure to this dynamic investment theme.”
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