Some Thematic Tech ETFs Are Sticking

April 05, 2017

[Editor’s Note: An earlier version omitted BOTZ as a competing fund to ROBO.]

One of the big changes that exchange-traded funds have brought to investors is the ability to invest in a particular technology, rather than trying to pick a singular tech company, which we know can be a loser’s game.

For instance, the ability to invest in the potential of a robotic revolution is offered in one of the sleeper ETF hits of the year, the ROBO Global Robotics and Automation Index ETF (ROBO), which has seen its assets under management (AUM) more than double since the beginning of the year. ROBO has received $263 million in new assets this year, bringing its total AUM to $402 million.

And the 3 ½-year-old fund is up 11.8% for the year, to boot, and up 34% over the past 12 months. There is another robotics ETF fund, the Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ), which was launched in September, has attracted $50 million in assets.

BOTZ has a cheaper expense ratio, 0.68%, compared with ROBO’s 0.95%, and is up 15.5% for the the year and has gained 17.65%  since inception.

Similar in performance, but without the huge wave of new assets that ROBO has registered, the Global X Lithium & Battery Tech ETF (LIT) offers exposure to global lithium miners and battery producers, the “commodity” of everything related to the batteries that power our phones, computers and cars.

LIT, which is nearly seven years old, has seen $30 million in new assets this year, a 24% increase, taking its total to $162 million, while outperforming the crowd with a 15.3% gain year-to-date, and a 34% return in the past 12 months.

No Copycat Funds

The importance of robotics and battery technology in our 21st-century lives is undeniable, which certainly has been behind the attraction of these funds. There is real growth potential for these industries, and they are not difficult businesses to understand. The head-scratcher is that there are no competing funds with these two niche plays.

But the lack of copycats may also have something to do with how difficult it is to attract the assets ROBO has seen this banner year after launching 3 ½ years ago. And after seven years, LIT has just crossed over $160 million in assets.

Another fund in the same vein as ROBO and LIT is the cybersecurity fund PureFunds ISE Cyber Security ETF (HACK), with nearly $1 billion in AUM. Few can say with conviction they don’t worry about computer hacking on both an individual and corporate level. HACK is up 11.65% this year, and 24.55% over the last 12 months.

 

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