Two ETFs related to automation have more than doubled the return of the S&P 500 this year
While a number of prominent economists have expressed concern over the impact that automation and robotics could have on the labor market over the coming years, it’s a trend that’s been paying off for investors this year, and which could accelerate thanks to the recently passed tax bill.
Two exchange-traded funds dedicated to this investment thesis have seen sizable gains in 2017, with growth that’s more than twice the move of the overall market. The ROBO Global Robotics & Automation Index ETF ROBO, +0.15% has gained 44.3% thus far this year, while the similarly themed Global X Robotics & Artificial Intelligence ETF BOTZ, +0.17% is up 59.4%. The S&P 500 is up nearly 20% on the year.
Both funds hold a collection of companies dedicated to the robotics and automation industries, and this is a sector that investors increasingly want exposure to. The Global X fund has seen $1.35 billion in year-to-date inflows, including $153 million over the past month, according to FactSet data. About $1.53 billion has poured into the ROBO fund this year, with $97.7 million of that coming over the past month.
Such inflows are extremely strong, especially as investors gravitate toward low-fee and broad-market funds, instead of the kind of niche exposure offered by thematic vehicles. But it comes as the sector has been one of the fastest-growing parts of the market. The average component of the Global X fund has annual sales growth of 6.59%, according to FactSet.
That growth could accelerate given…Read More