Potential Profits Exist in the World of Robotics

“The real problem is not whether machines think but whether men do.” — B. F. Skinner

While robots have long held sway in the domain of science fiction, their role in the automation of jobs formerly performed by humans has cast a specter over the world’s developed economics and will remain a salient political and economic question for a long time to come.

On the other hand, the disruptive innovation driven by the “Fourth Industrial Revolution” also has given new opportunities for investors. For instance, the ARK Autonomous Robotics ETF (BATS: ARKQ) provides investors with exposure to companies around the world that will benefit from new scientific advancements in the areas of energy, materials, transportation, automation and manufacturing.

One of the most crucial differences between ARKQ and its most direct competitor Robo Global Robotics and Automation Index ETF (NYSE: ROBO) is that while ROBO generally focuses on companies that develop or benefit from automation, most of the companies in ARKQ’s portfolio are involved with the fields of autonomous transportation, robotics and automation, 3D printing, energy storage and space exploration.

The ARK Invest fund’s top holdings include Elon Musk-led Tesla Inc. (NASDAQ: TSLA), Stratasys Ltd. (NASDAQ: SSYS), Proto Labs, Inc. (NYSE: PRLB), Materialise NV-ADR (NASDAQ:MTLS), Xilinx, Inc. (NASDAQ:XLNX), NVIDIA Corporation (NASDAQ: NVDA) and AeroVironment, Inc. (NASDAQ: AVAV).

This fund’s performance has been solid in both the short run and the long run. As of Jan. 27, ARKQ is up 2.38% for the past month and 14.19% over the past three months. It currently is up 3.58% year to date.

The fund has $183.81 million in assets under management and an expense ratio of 0.75%, meaning that it is more expensive to hold in comparison to other exchange-traded funds (ETFs).

Chart courtesy of www.StockCharts.com.

In short, while ARKQ does provide an investor with a chance to profit from the world of autonomous robotics, the sector may not be appropriate for all portfolios. Thus, interested investors always should conduct their own due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.