ROBO ETF

Robotics is a practical, growing industry with significant applications in industrial, healthcare, and home sectors, not just "sci-fi" humanoid robots. I prefer the ROBO ETF for its diversified, global exposure to robotics and automation technology, despite its high expense ratio. BOTZ ETF is less appealing due to its concentrated holdings and overlap with general tech ETFs, making it less focused on pure robotics.

Let's start with the bad news. The robotics space has underperformed broader tech over the past 18 months.

The ROBO Global Robotics and Automation Index ETF is too diversified, failing to outperform the S&P 500 over multiple time frames. The real beneficiaries of automation are the users, not the creators, making a simple S&P 500 index fund a better investment. The ETF's holdings are fairly priced with limited upside, and higher interest rates could make them vulnerable to market corrections.

In this ROBO Global Healthcare Technology and Innovation Index spotlight, we focus on Axogen (AXGN). The index underlies the $56.2 million ROBO Global Healthcare Technology and Innovation ETF (HTEC).

The ROBO Global Robotics and Automation Index (ROBO) returned 5.6% during the third quarter of 2024. The robotics space overall has still underperformed over the past year, due to a mix of megacap divergence as well as a lag in end-market.

The humanoid robotics market is currently in its infancy, with low overall exposure and a predominantly private company landscape, with companies like Unitree and Figure, and Agility Robotics, among others, creating a stir. While the market size is currently small, we have significant exposure to many of the enabling technologies.

It shouldn't come as a surprise to hear that the robotics sector has been a highly popular investment theme this year. Following years of innovation within the space, experts remain confident in the value that the sector can bring.

If you've been following along – we've been sharing how we've been in the “Eye of the Robo Storm” not only in terms of old market maturation and cyclicality awaiting the pull-through from globalization of manufacturing, but new markets blossoming from major advancements in energy and AI bringing a massive upgrade cycle and new markets

The robotics market has weathered a challenging 14-month period. It has faced headwinds such as rising rates, China's slowdown, labor issues, and project delays.