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THE ROBOTS ARE COMING!
1/23/2018 12:45:25 AM
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Wealth Builder
Gordon Pape writes on common-sense wealth-building strategies.



By Gordon Pape  | Monday, January 08, 2018


BUILDING WEALTH WITH GORDON PAPE
 

Q – I have a question regarding stocks such as BOTZ and ROBO. Both are U.S. stocks involved in automation/robots, etc. My thinking is that this area is something that has potential, with everything I have read about the number of jobs that may disappear in the near future. My question was whether you had any insight on this type of stock. – Gord Z.

A Robo-Stox Global Robotics & Automation ETF (NASDAQ: ROBO), was the first exchange-traded fund (ETF) to specialize in robotics and automation companies. The portfolio holds 91 positions in such firms from around the world and is highly diversified – not a single stock exceeds 2% of the total holdings.

Bellwether companies in the portfolio include Rockwell Automation (NYSE: ROK), Hiwin Technologies Corp. (TPE: 2049), and Fanuc Corp. (TYO: 6054). A little over 44% of the portfolio is North American-based, with about 34% in Asia and 19% in Europe. About three quarters of the holdings are in small- and mid-cap companies, which by definition makes this a higher-risk investment.

This ETF performed well in 2017 with a gain of 44% for the year. It closed on Dec. 29 at US$41.32, just below its all-time high of US$43.44. The management expense ratio is 0.95%.

Global X Robotics and Artificial Intelligence ETF (NASDAQ: BOTZ) is a smaller fund than ROBO, with a lower MER at 0.68%. It was launched in September 2016 and fund holds fewer stocks and makes bigger bets on individual holdings than ROBO. For example, Nvidia Corp. (NSADAQ: NVDA) makes up 8.1% of the portfolio closely followed by Yaskawa Electric Corp. (TYO: 6506) and Keyence Corp. (TYO: 6861) at 8.0% each. The ETF gained 58.2% in 2017.

Either fund would be suitable for investors who want to take a long-term position in this exciting sector but don’t want to zero in on individual companies. But keep in mind that these ETFs are likely to be volatile, so ask your advisor whether they’d be suitable for your portfolio and risk tolerance level. Both funds are too new to have any performance history in down markets.

If you have a financial or investing question you’d like me to answer, send it to "gpape@rogers.com" and write "Fund Library Question" in the subject line. Note that I cannot guarantee a personal response, but will publish the most interesting queries here. – G.P.

Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investornewsletters, which are available through the Building Wealth website.

For more information on subscriptions to Gordon Pape’s newsletters, check the Building Wealth website.

Follow Gordon Pape on Twitter at https://twitter.com/GPUpdates and on Facebook at www.facebook.com/GordonPapeMoney.

Notes and Disclaimer

© 2018 by The Fund Library. All rights reserved.

The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.

BUILDING WEALTH WITH GORDON PAPE
 

 
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