Two ETFs for Artificial Intelligence and Robotics

The best way for investors to get exposure to any given investment theme is by finding an Exchange Traded Fund (ETF) that tracks said theme. The problem with many of these ETFs is that they aren’t exactly focused on pure plays. The creators of the ETF want a broad enough selection of stocks within the ETF so investors can enjoy the benefits of diversification. Of course, that means getting a bit creative as to what might be included. One recent example we came across was Morgan Stanley’s list of “space stocks” that included Facebook and Apple, neither of which are doing much in space at the moment. However, these things can often become a self-fulfilling prophecy. If enough people invest in an ETF, then suddenly it starts to perform well and gains credibility simply from the large number of Assets Under Management (AUM).

One ETF that has been performing quite well lately is the Robo Global Robotics & Automation Index ETF (ROBO) which we highlighted before and which now has $2.3 billion assets under management. To put that number in perspective, we can take a look at the top-100 ETFs by AUM and see that the smallest ETF in that list (Vanguard Healthcare ETF) has more than $7 billion in AUM. In other words, just to crack into the top 100 most popular ETFs, ROBO still needs to triple the number of assets they are managing. If they did manage to do that, they’d also b