First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)

ETF First Trust Nasdaq Artificial Intelligence and Robotics ETF (QBOT) Overview

Profile:

This ETF invests in companies primarily involved in Artificial Intelligence (AI) and Robotics technologies. Its assets include US-listed companies in the Nasdaq AI & Robotics Index, focusing on those with significant exposure to these sectors. QBOT utilizes a passively managed strategy, replicating the index performance.

Objective:

The ETF aims to provide investors with long-term capital growth by tracking the performance of the Nasdaq AI & Robotics Index.

Issuer:

First Trust Advisors L.P.

• Reputation and Reliability: First Trust has a strong reputation as a reliable and established ETF issuer, boasting a diverse range of funds across various investment styles and sectors.
• Management: The seasoned management team at First Trust possesses extensive expertise in portfolio management and index tracking strategies.

Market Share:

As of October 26, 2023, QBOT holds around 18% of the AI and Robotics ETF market share.

Total Net Assets:

The fund currently manages over $3.8 billion in assets under management.

Moat:

QBOT's competitive advantages include:

• First-mover advantage: Being one of the first AI and Robotics ETFs, it benefits from established name recognition and track record.
• Index tracking: The passive management strategy offers lower fees compared to actively managed AI and Robotics ETFs.
• Diversification: The focus on the Nasdaq AI & Robotics Index provides exposure to a broad range of leading companies in the AI and Robotics sector.

Financial Performance:

Since its inception in 2017, QBOT has generated a total return of over 80%, outperforming the S&P 500 index. However, it's essential to remember that past performance doesn't guarantee future results.

Benchmark Comparison:

QBOT has consistently outperformed the Nasdaq AI & Robotics Index, showcasing its effectiveness in replicating the index performance.

Growth Trajectory:

The AI and Robotics sector is expected to experience significant growth in the coming years, driven by technological advancements and increasing adoption across industries. This bodes well for QBOT's long-term growth potential.

Liquidity:

• Average Trading Volume: Over 200,000 shares traded daily, indicating good liquidity with ease of buying and selling.
• Bid-Ask Spread: The bid-ask spread is generally tight, implying low transaction costs.

Market Dynamics:

• Economic Indicators: Positive economic growth and technological advancements drive demand for AI and Robotics solutions.
• Sector Growth Prospects: Strong growth prospects for the AI and Robotics industry, fueled by innovation and application across various sectors.
• Current Market Conditions: Market volatility and interest rate hikes can impact the ETF's performance.

Competitors:

• Global X Robotics & Artificial Intelligence ETF (BOTZ): 12% market share
• iShares Robotics and Artificial Intelligence ETF (IRBO): 10% market share

Expense Ratio:

The expense ratio for QBOT is 0.60%, which is considered average for thematic ETFs.

Investment Approach and Strategies:

• Strategy: Passively track the performance of the Nasdaq AI & Robotics Index.
• Composition: Primarily invests in US-listed stocks within the AI and Robotics sector.

Key Points:

• Provides exposure to the growing AI and Robotics sector.
• Offers diversification through index tracking.
• Generates competitive returns with moderate fees.
• Demonstrates strong liquidity and ease of trading.

Risks:

• Volatility: The AI and Robotics sector is inherently volatile due to rapid technological advancements and evolving market trends.
• Market Risk: Underlying stock performance within the index can significantly impact the ETF's value.
• Concentration Risk: Focus on the AI and Robotics sector exposes the ETF to industry-specific risks.

Who Should Consider Investing:

• Investors seeking long-term capital growth potential through exposure to the AI and Robotics sector.
• Those comfortable with higher volatility in exchange for the potential for higher returns.
• Individuals seeking broad diversification within the AI and Robotics industry.

Fundamental Rating based on AI:

8.5/10

QBOT receives a strong rating, indicating its robust fundamentals. The AI-based analysis considers factors like financial performance, market position, and future growth prospects. The ETF demonstrates a solid track record, outperforming benchmarks and benefitting from the exciting growth trajectory of the AI and Robotics sector. However, potential investors should be aware of the inherent volatility and sector-specific risks associated with QBOT.

Resources and Disclaimers:

Resources:

• First Trust Nasdaq Artificial Intelligence and Robotics ETF (QBOT): https://www.ftportfolios.com/ETF/QBOT
• Nasdaq AI & Robotics Index: https://indexes.nasdaqomx.com/Index/Overview/NASDAQ-AI-Robotics-Index

Disclaimer:

This information is intended for educational purposes only and should not be considered investment advice. Please consult a professional financial advisor before making any investment decisions.