All Systems Go For ROBO ETF

November 20, 2013

But where does John Deere fit into its portfolio?


0_Bell_Ringing Frank Tobe Rob Wilson

Frank Tobe (far left); Rob Wilson (second from right)

A three-fingered robotic arm rang the Nasdaq Closing Bell on Tuesday, Nov. 12 to mark the launch of the first-to-market Global Robotics and Automation Index ETF (ROBO). The ETF went live on Oct. 22. The robotic bell ringing also marked the first time a nonhuman has ever rung the closing bell.


The purveyors of the ROBO ETF, co-founders Rob Wilson and Frank Tobe, recently spoke to IndexUniverse staff writer Hung Tran about the ETF’s not-so-pure-play robotics portfolio and why they think the fund’s fees are really not as high as they seem at first blush. Ringing the closing bell must have been a big day for you two.

Frank Tobe: To me, it’s a dream come true. That’s been seven, eight years of work to compile these [robotic stock] lists, and now it’s actually coming to fruition. I called my brokers with my original goal and said, “Can’t I just get a basket of stocks in the robotics industry?” And they could not give it to me.

So I tried a couple of other brokers and looked on the Bloomberg and I could not get that kind of information. Now the information is available; here it is in this index. And it’s a safe index, as far as I’m concerned, so I can actually invest my retirement money in it and feel comfortable about it. So that’s why I say it’s a dream come true. You said you could feel “comfortable” about it?

Tobe: I’m not a fool, but this is safer than many of the things I’ve invested in. For the last few years, I’ve been picking stocks in this field and doing quite well. But I’m a bad investor in that I go on vacation and forget about it and stocks go up and down and I don’t pay attention.

So here it’s paid attention to professionally, and I appreciate that. I’ve actually sold out my little set of 10 stocks and put all that money in this fund.

Rob Wilson: These companies are driving technology both in machinery and the software that drives it to ever-greater capability levels. What’s more, all of a sudden this technology solution set—which can go across many different industries—is affordable. This is a mega trend. Can you talk about trends within the robotics automation space that should make investors excited about investing in this ETF?

Wilson: One example that stood out in my mind is a company like Falcon Technology that’s starting to implement robotics in their factories. And then you see it actually coming home to the U.S. in the form of Tesla’s new fully robotic assembly/manufacturing plant in Fremont, Calif.

Apple has set up a robotics-driven plant here in Arizona that’s very new. These companies are taking advantage of this.

So the excitement for an investor is to go and own the companies that are driving the components, the technologies, the software, the new inventions that are behind it. These are the technologies that big-name brand companies like Apple and Amazon are leveraging.

The benefit for an investor here is that in one index, in one basket, they can access at this point 77 companies that are set to benchmark the trend.



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