Technology

The Top 6 ETFs for Robotics, Automation and Artificial Intelligence Have Vast Style Differences

The world is rapidly changing. It wasn’t that long ago that mobile communications, nanotech, rare earth minerals, large-scale video games and social media were the hottest trends. That was then. Now the world’s next big technological advancements coming from robotics, artificial intelligence (AI) and machine learning, augmented and virtual reality, driverless vehicles, ever-changing data security and many other futuristic technology applications.

These future technology sectors already have started coming to life and offer massive growth potential over the coming decade or longer. Their nascent revenues today may grow into the tens of billions of dollars down the road. This is not just for the United States and the West either. These technology changes will have an impact on the developing world as well.

24/7 Wall St. has looked at many exchange-traded fund (ETF) trends for futurists over time. Many of the technology advances being made by the world’s top tech, industrial and other companies have only just started to see revenues in these long-term opportunities. That is why we are focusing on an ETF theme around robotics, automation, machine learning, AI and the surrounding fields that will benefit from this secular theme.

The United Nations suggests that the most recent population estimate of 7.6 billion people today will rise to more than 11 billion people by 2100. As the population grows, some of these future disrupting technologies are very likely to displace millions of jobs and make certain careers obsolete at basically the same time.

A fresh article from Forbes pointed out that some studies have predicted that as much as 40% to 50% of U.S. jobs could be automated in the next 20 years. Meanwhile, a paper issued by Deloitte in 2018 suggests that AI, robotics and automation are most effective in complementing the work of humans rather than replacing humans. This movement could be highly disruptive to the workforce, but this also can be seen as an opportunity by certain investors who track thematic and secular trends for massive growth potential.

In this review, we have looked over the universe of ETFs to see which offer the best opportunities for the years ahead. By focusing on an ETF rather than individual shares, investors can hope to catch sectors in this thematic investing strategy without taking on the risk that some of the speculative companies may implode. And implosion risk is more than just a risk. There are some highly valued and well-respected companies today that may find a day where they are also technologically obsolete and their value all but vanishes in a short time.

Large and small companies alike, both private and public, as well as governments and some individuals, have started using AI and machine learning to better manage their futures and to manage their existing businesses. But investors need to pay attention to the top holdings of each ETF to make sure that the future they are investing is really a focus of a company rather than just one of two dozen strategies. It’s easy to believe that a sector ETF only focuses on one theme, but that often is not the case.

24/7 Wall St. has used multiple data points for this ETF screen and review. Most data has been taken from the ETFdb.com website for fees and assets under management, while other data has been taken directly from each ETF manager’s website. Performance metrics for the year have been provided by Finviz.

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