iShares Automation & Robotics ETF

(RBTX) £10.22

Fund size: £2.77 billion

In scenes from the film I, Robot, androids can be seen doing all sorts of household tasks – running errands, carry heavy shopping, cleaning the home, for example. In the real world most robots do repetitive, heavy-lifting, and dangerous tasks in places like car factories.

Yet humans and robots are forming a close friendship like never before as technology has become more powerful, efficient, and cheaper. Today, they mow your lawn or vacuum the house but there is far more to come. Go on YouTube and you’ll find clips of robots that can move like humans – walk, navigate stairs, bend, lift, and it doesn’t take a massive leap of the imagination to believe that within the next decade many of us could have human-like robots doing basic chores and more.

With the adoption of fast-improving AI (artificial intelligence) they might also provide far more valuable tasks, perhaps care for the ill and disabled when nursing staff are in short supply, or communicate well enough to provide a basic level of companionship. According to BlackRock, the robotic nursing market alone is expected to grow more than 22% a year through 2026 to more than $2 billion in annual sales.

Consumer companies like Tesla (TSLA:NASDAQ) and Apple (AAPL:NASDAQ) are investing billions into robot development telling us that the future of robots will be far more ubiquitous than industrial applications, a large growth market in itself.

The market for mobile and stationary professional services robots could grow 10-fold by 2030, according to data from the Boston Consulting Group, while the wider robotics industry is looking at near seven-fold growth, on a best-case basis. Even the consultancy’s base case scenario implies a $39 billion robotics market in 2023 expanding to $260 billion by 2030, 310% higher.

But investing in robots of the future requires a diversified approach. This makes, Shares believes, the iShares Robotics & Automation ETF (RBTX) an excellent, reasonable low-cost catch all option. With a portfolio of more than 150 stocks, it should capture the industry potential from all angles, from industrial applications to in-home solutions.

Key names are well-represented – Nvidia (NVDA:NASDAQ) is its largest holding, while Advanced Micro Devices (AMD:NASDAQ), ServiceNow (NOW:NYSE), Workday (WDAY:NASDAQ), are balanced with lesser-known names, like Japan’s  Advantest (6857:TYO), a self-proclaimed expert in mechatronics, or advanced automated manufacturing.

Since inception in 2016, the ETF has delivered 177.6% total returns, or 11.9% a year over the past five, according to Morningstar data.

An ongoing charge of 0.4% looks like a reasonable price to pay for a piece of the potential pie. 

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