Even a relatively small capital of $500 – $3,000 can make it possible to form an investment portfolio from the shares of the most capitalized enterprises worldwide. With a small starting capital and in the absence of experience in trading in the stock market, it is recommended to use such an instrument as ETF funds. ETFs are exchange-traded investment funds with shares traded on the stock exchange. Funds invest in various assets and the profit results in an increase in their shares’ value.
The formation of the value of ETF, depending on the specifics, corresponds to the price movement of goods, economic assets, geographic area, and the value of companies included in the fund’s basket. Examples of notable ETFs are the Global X Internet of Things ETF (BOTZ) and the Global Robotics and Automation ETF (ROBO). In this article, we will consider BOTZ stock and ROBO stock in more detail and determine which is more promising today.
Global X Internet of Things ETF (BOTZ): General Features
BOTZ is the highest-performing leveraged-themed ETF in the investment universe. The fund was launched in September 2016. It is based on index replication and aims to determine the thematic index Indxx Global Robotics and Artificial Intelligence.
The sector has been catalyzed by electric vehicles and the digitalization of various sectors, such as manufacturing, retail, e-commerce, finance, and healthcare. For example, partial lockdowns and other social distancing measures have increased the appeal of automated production lines and assembly robots. In 2019, the volume of the global artificial intelligence market amounted to $39.9 billion. It is estimated that from 2020 to 2027, the indicator will grow by an average of 42.2% per year.
BOTZ allows you to invest in companies that are doing well against the backdrop of the widespread adoption of robotics and artificial intelligence. These firms typically focus on industrial robotics and process automation, non-industrial robots, and autonomous vehicles. BOTZ’s portfolio is now valued at $2.63 billion.
Global Robotics and Automation ETF (ROBO): Issuer Brief Description
ROBO monitors the ROBO Global Robotics and Automation Index and invests in technology, industrial, IT, and other robotics-related stocks. Almost half of the fund’s investments (47%) are in American companies. The share of Asian companies is 33%, European – 17%. The total assets under the management of the fund are $600.3 million. The management fee is 0.95% per annum. The expected dividend yield is 0.16%. The total return of the fund since the beginning of 2022 amounted to 20.8%.
Robotics is currently one of the most intensively developing areas, the main task of which is to automate people’s production and social life comprehensively. And if a few decades ago, robots were used mainly in the automotive industry, now they are used in various sectors of the economy:
- In medicine, robotic complexes help to carry out complex surgical operations;
- Robotic vacuum cleaners are increasingly used for cleaning rooms;
- The topic of autonomous cars is actively developing, etc.
The global robot market is expected to grow rapidly in the coming years. According to IDC, robotics and related services sales will reach $188 billion by the end of 2022. Growth will be supported by technological improvements, robot applications, and increasing market acceptance.
Therefore, buying shares of the Global Robotics and Automation ETF (ROBO) looks promising. The advantage of this fund is a high diversification of investments, good liquidity, as well as a relatively low management fee. The medium-term target price is $40.
BOTZ vs. ROBO: Comparative Analysis
Starting BOTZ vs ROBO comparative analysis, it seems appropriate to note right away that BOTZ launched on September 12, 2016, and ROBO on October 22, 2013. BOTZ charges a 0.68% fee, less than ROBO’s 0.95% fee.
Profitability of BOTZ and ROBO
The BOTZ yield since September 14, 2016, is 55.90%. This is 89.28% below the ROBO yield. In addition, BOTZ’s dividend yield is 0.21%. This is 0.24% less the ROBO dividend yield.
Sharpe Ratio BOTZ and ROBO
As of August 2022, the BOTZ Sharpe ratio is -1.07. This is below the ROBO Sharpe ratio of -0.78.
The Volatility of BOTZ and ROBO
The BOTZ volatility is 38.20%. The ROBO volatility is 33.05%.
ETF funds BOTZ and ROBO are reliable tools for passive income in the stock market. They are suitable for both long-term and intraday trading. Due to the wide diversification and focus on innovation, these exchange-traded funds are able to provide high returns and fast payback of assets while minimizing the risks of possible losses.