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ROBO: Automation Might Prevail After The End Of COVID-19 Pandemic

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Bridger Research
896 Followers

Summary

  • Implementation of Automation & Artificial Intelligence in key industries like manufacturing or e-commerce is one of the most prosperous secular trends over the next decade.
  • This ETF has underperformed the Technology Select Sector SPDR Fund over the last five years.
  • It offers a very low dividend yield of approximately 0.35%, compared to some high-yield dividend/income ETFs.

This time, we will present our readers with the ROBO Global® Robotics and Automation Index ETF (NYSEARCA:ROBO) which was incorporated back in 2013. It has a total AUM of approximately $920 million and comes with an annual expense ratio of 0.95%. It has been distributing its shareholders a regular annual dividend payment of less than $0.16 per share over the last couple of years. Unfortunately, that makes up a very low dividend yield of 0.34% as of July 20, 2020.

We are bullish about this ETF, given the importance of automation and digitization to deal with the COVID-19 pandemic. For instance, automation enables companies to solve the issue of social distancing and prevent the spread of coronavirus, by utilizing robots or automated production lines. In terms of the key bullish catalysts, we find them as the following: (1) increased corporate investments in automation & artificial intelligence in the most important industries like manufacturing, e-commerce or healthcare, (2) positive secular trends of automation & artificial intelligence will most likely persist in the post-pandemic era over the next couple of years.

About the Fund

(Source: Factsheet)

This fund primarily invests in equities of applicable companies worldwide, which are somehow involved in the automation or artificial intelligence businesses. For example, by producing robots, automated production lines, or by providing software that uses artificial intelligence to automate repetitive tasks, which have been previously conducted by human labor. We believe that an enhanced level of automation and artificial intelligence in manufacturing, healthcare, and consumer staples industries should enable our society to receive so-called ‘essential’ products or services even in the case of worsening of the coronavirus pandemic in the near future.

For instance, global car manufacturing companies like Tesla (TSLA) have been negatively impacted by the nation-wide lockdowns earlier this year, as companies were forced

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About ROBO ETF

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