Investing in IRBO: The Latest in Robotics & AI ETFs

by on Aug 21, 2018

On June 28, iShares launched the iShares Robotics & Artificial Intelligence ETF (IRBO), an equal-weighted fund that gives investors exposure to leading companies in robotics and artificial intelligence innovation. Since its inception, the ETF has been trading at a premium and its performance has either met or exceeded the benchmark (NYSE FactSet Global Robotics and Artificial Intelligence Index) up until July 16. Since then, it only performed below benchmark on four occasions by an amount of at most .05 points.

The fund launched during what could be considered a difficult time for robotics and AI investing. Industry front runners Global X’s Robotics & Artificial Intelligence ETF (BOTZ) and Robo Global’s Robotics and Automation Index ETF (ROBO) were doing very well at the beginning of the year but have begun performing more poorly since February. Despite these challenges, the company wanted to offer its investors the opportunity to take advantage of the developing industry that it believes will be integral in changing the way business operates.

Experts are still unsure of what to expect from the industry funds. While some professionals posit that now is the time to invest in this quickly developing market, as is exemplified by this McKinsey & Company article, others, such as Jeff Tjornehoj of Broadridge Financial, state that investors have actually been taking a step back from robotics and AI, making investing in the space a bit tougher.

In either case, individuals should make educated decisions if they do choose to invest in robotics and AI. In an interview with Forbes, William Tunstall-Pedoe of Cambridge Innovation Capital stresses the importance of knowledge of the technological space so investors can parse out which product innovation plans are feasible and which are overly optimistic and so they can identify the risks of early stage investing when it comes to AI.

In a market characterized by high risk, nothing is ever certain, so only time will tell if the performance of IRBO and other robotics and AI ETFs boom with the industry or if they will continue their current downward trend.