The combination of a middling Process Pillar rating and a Low People Pillar rating limit  Robo Global® Robotics&Automation ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a sizable cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The team managing the passive strategy earns a Low People Pillar. The strategy merits an Average Process Pillar rating.  High quality exposure is attributed to stocks with low financial leverage and strong returns on equity. And a low yield exposure is rooted in holding fewer stocks with high dividend or buyback yields -- instead, typically holding stocks in an early stage of development. To be considered a quality steward, this strategy's parent organization needs to improve factors like unsubstantial personal investments from portfolio managers and a bench of limited-tenure portfolio managers. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

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Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Robo Global® Robotics&Automation ETF earns an Average Process Pillar rating. The most important driver of the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. 

The investment strategy as stated in the fund's prospectus is:  The investment seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the ROBO Global® Robotics and Automation Index.  The fund will normally invest at least 80% of its total assets in securities of the index or in depositary receipts representing securities of the index. The index is designed to measure the performance of robotics-related and/or automation-related companies. The fund may invest up to 20% of its assets in investments that are not included in the index, and but which the Adviser and Sub-Adviser believe will help it track the index. It is non-diversified. 

 The portfolio is overweight in technology and industrials relative to the category average by 22.0 and 18.0 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and basic materials, underweight the average by 10.1 and 8.8 percentage points of assets, respectively. The strategy owns 82 securities and is relatively top-heavy. Of the strategy's assets, 18.7% are concentrated within the top 10 holdings, compared to the typical peer's 15.4%. And finally, in terms of portfolio turnover, looking at year-over-year movements, 24% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Average

Process

Robo Global’s team receives a Low People Pillar rating. The largest detractor from the rating is the experience of the management team, which averages four years at this fund. Turnover at its parent firm also holds the rating back. The firm's asset-weighted manager tenure of two years suggests it could do more to retain portfolio managers. The parent firm's five-year success ratio of 100% further detracts from the team. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

People

In an increasingly competitive industry, Robo Global falls behind on a number of key metrics, resulting in a Below Average Parent Pillar rating. None of the firm’s assets are covered by an invested manager. Team members’ investments are regarded as helping to encourage long-term thinking and align portfolio manager and investor interests. Longest-tenured managers’ average asset-weighted tenure within the firm is slim, two years, compared with peer firms. This contributes negatively to the rating, as the current managers have limited experience running strategies at the firm. The Robo Global five-year success ratio stands out versus its peers. In particular, 100% of its products have survived and beaten their respective category median over the past five years.

Below Average

Parent

ROBO Global Robotics and Automation ETF

ROBO tracks a global index of companies involved in robotics and automation. The portfolio utilizes a tiered weighting strategy.

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ROBO Global Robotics and Automation Index ETF invests in global companies involved in automation, AI, and robotics. The ETF is mostly focused on industry leaders from the U.S., although it also includes many innovative companies from foreign companies. ROBO has underperformed other robotic ETFs but offers a diversified approach with a focus on small-cap stocks, which could potentially rebound.

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This article examines the first rebalance and reconstitution of 2024 for the ROBO Global Robotics and Automation Index. This index underlies the $1.3 billion ROBO Global Robotics and Automation Index ETF (ROBO).

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In this quarter's ROBO Global Robotics and Automation Index spotlight, we highlight Toyota Industries Corp. The firm is a key player in the Logistics Automation subsector. The subsector represents approximately 15% of the index, which underlies the $1.3 billion ROBO Global Robotics & Automation Index ETF (ROBO).

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In October, the ROBO Global Robotics & Automation Index celebrated its 10th anniversary. To celebrate this accomplishment, VettaFi CMO Jon Fee sat down with Zeno Mercer, a senior research analyst at VettaFi, for a special edition episode of “What Makes That Ticker Tick” to discuss the ROBO index at large.

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In celebration of the 10-year anniversary of ROBO on October 21, Exchange Traded Concepts and ROBO Global rang the opening bell on Wall Street today. “As we celebrate the 10th anniversary of the ROBO ETF, we look forward to the future with even greater anticipation,” said J.

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Both ROBO and BOTZ provide diversification and exposure to the AI market but differ in their holdings and concentration. While both ETFs have underperformed the broader technology market, BOTZ's focus on high-growth stocks like NVIDIA drove its performance. Both ETFs face risks stemming from high valuations, although BOTZ faces more risks, including higher volatility, as it has a more concentrated portfolio.

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News for ROBO Global Robotics and Automation ETF ETF (ROBO)