The combination of a middling Process Pillar rating and a Low People Pillar rating limit  Robo Global® Artificial Intelligence ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a 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 gets an Average Process Pillar rating.  High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy's parent organization still has a way to go to reach the industry standard, evidenced by a lack of inside investments from portfolio managers and a cohort of unseasoned portfolio managers. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

Alphabet

Microsoft

NVIDIA

Palo Alto Networks

Analog Devices

ServiceNow

Cognex

Cloudflare

HubSpot

Amazon

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Robo Global® Artificial Intelligence ETF earns an Average Process Pillar rating. The most meaningful contributor to the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The size of the portfolio management team also reinforces the process. With four portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by the parent firm's five-year retention rate of 50%, which suggests it could do more to retain its portfolio managers.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to provide investment results that, before fees and expenses, and correspond generally to the price and yield performance of the ROBO Global® Artificial Intelligence 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 publicly-traded companies that have a significant portion of their revenue derived from the field of artificial intelligence. It is non-diversified. 

 The portfolio is overweight in consumer cyclical and healthcare relative to the category average by 5.3 and 3.4 percentage points, respectively. The sectors with low exposure compared to category peers are communication services and industrials, with communication services underweighting the average portfolio by 5.5 percentage points of assets and industrials similar to the average. The portfolio is composed of 65 holdings and its assets are more dispersed than peers in the category. In particular, 24.2% of the fund’s assets are concentrated in the top 10 fund holdings, as opposed to the typical peer's 52.3%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 39% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Average

Process

Robo Global’s team receives a Low People Pillar rating. The most notable detractor from the rating is the experience of the management team, which averages four years at this fund. The instability of talent across its parent firm also detracts from the team. The firm's asset-weighted manager tenure of two years suggests it could do more to hold onto portfolio managers. The parent firm's five-year success ratio of 100% further holds the team back. The measure indicates the percentage of a firm's funds that survived and beat 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 Artificial Intelligence ETF

THNQ tracks a global index of companies involved in developing the technology and the infrastructure of enabling artificial intelligence.

Global X Robotics & Artificial Intelligence ETF

ROBO Global Robotics and Automation ETF

The global market for humanoid robots is projected to reach $38 billion by 2035, with potential shipments of 1.4 million to 6.5 million units per year. Tesla's Optimus humanoid robot is leading the way, with other companies like Agility Robotics, Boston Dynamics, Figure AI, Sanctuary AI, and UBTECH Robotics also making advancements. Risks include technology development, high costs, public acceptance, legal issues, and company and stock market challenges.

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Stock markets are experiencing a correction, presenting a potential opportunity to buy previously expensive stocks and ETFs.

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This article examines the first quarterly index rebalance and reconstitution for 2024 of the ROBO Global Artificial Intelligence Index that underlies the $180 million ROBO Global Artificial Intelligence ETF (THNQ). In the fast-moving environment of artificial intelligence, our quarterly rebalancing process is crucial to capturing the broader ecosystem.

Capturing a Rapid AI Evolution: Q1 THNQ Index Rebalance

For the first quarter, in the ROBO Global Artificial Intelligence Index spotlight, we highlight Pure Storage, a key player in the Network and Security Subsector (~17% weighting).

THNQ Index Q1 Spotlight: Pure Storage Operates in Key AI Subsector

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iShares Robotics & Artificial Intelligence Multisector ETF

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Artificial intelligence could define this decade. These seven AI ETFs provide investors with well-rounded exposure as this technology comes into its own.

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AdvisorShares Pure US Cannabis ETF

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Subversive Cannabis ETF

Amplify Alternative Harvest ETF

Amplify US Alternative Harvest ETF

FlexShares STOXX Global Broad Infrastructure Index Fund

First Trust Alerian US NextGen

Vaneck Green Infrastructure ETF

Cambria Cannabis ETF

ProShares DJ Brookfield Global Infrastructure ETF

Themes Generative Artificial Intelligence ETF

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Valkyrie Bitcoin Fund

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As the first quarter comes to a close, clearly, there have been some thematic winners in terms of flows and investment performance. Artificial Intelligence AI-themed ETFs remain among the top recipients of investor flows this year.

ETF Themes That Dominated in Q1 2023

ProShares MSCI Transformational Changes ETF

ARK Innovation ETF

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The AI revolution, with its expansion into neural networks and other novel fields, marks a dramatic shift away from traditional innovation models. ChatGPT and other platforms have made remarkable strides, with their undeniable conversational prowess.

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OpenAI leader Sam Altman made headlines earlier this month, touting a semiconductor project requiring trillions of dollars. Altman, whose OpenAI product helped usher in a new age of generative AI last year, is looking to boost the world's chip-building capacity.

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SPDR S&P 500 ETF Trust

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On this week's episode of ETF Prime, host Nate Geraci spoke with a trio of individuals, discussing several ETF-related topics. To open this week's podcast, Geraci brought on VettaFi's Zeno Mercer to talk about Nvidia, the artificial intelligence industry, and more.

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Oscar Pulido explores the transformative power of AI and its impact on the financial services industry with Rob Goldstein, Chief Operating Officer of BlackRock, and Lance Braunstein, Head of Aladdin Engineering. The advent of AI has radically altered the landscape of work, reshaping the fabric of industries and prompting a monumental shift in how tasks are executed, and decisions are made within the financial services industry.

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Semiconductors: one of the hottest tech darlings of the last few years, the computer chips have contributed significantly to the overall stock market. They've done so well, in fact, that they've helped push NVIDIA (NVDA) into the so-called “Magnificent Seven.

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Grayscale Bitcoin Trust

A new ETF playoff champion has been crowned. Artificial Intelligence routed spot Bitcoin ETFs to claim the first-ever ETF championship.

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The AI craze that significantly boosted the economy in 2023 may have to mature in 2024, but it still offers huge potential. As a route into that space, investors may want to consider the benefits of an AI ETF.

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So much of the market's focus on the AI narrative has emphasized AI's place in information technology firms. Chatbots like ChatGPT foretell a world of AI agents helping humans boost productivity, push creativity forward, and improve efficiency.

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MSUS

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To close out the year, I thought it would be interesting to see which thematic categories experienced the most inflows in 2023, demonstrating proverbially “where the puck was going.” This data, sourced from Bloomberg and VettaFi's internal data, is interesting because it does not necessarily align with performance.

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JPMorgan Equity Premium Income ETF

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We discuss some of the hot events of 2023 that influenced the market in a big way.

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To use a holiday analogy, I have been checking lists and checking them twice to figure out which of next year's top disruptive investment themes are likely to be nice.

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Bitwise Crypto Innovators ETF

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The year is coming to a close, and many disruptive themes had a stellar year from an investment standpoint — some well-known and others under the radar. Here are a few of the top disruptive technology themes of 2023.

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Robo Global Artificial Intelligence ETF provides investors with diversified access to the artificial intelligence and robotics sectors. THNQ tracks the ROBO Global Artificial Intelligence Index, which includes companies generating significant revenue from the AI market. The fund offers exposure to global companies of various sizes and sectors, rebalanced quarterly to include innovative and promising companies.

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This is an exciting time for artificial intelligence and robotics stocks, with many companies reporting and some major news announcements. This week, for the Disruptive Theme of the Week, I reached out to VettaFi's Senior Research Analyst, Zeno Mercer, for an update on the latest developments in AI and robotics.

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South Korean-based company LG is a global leader in electronics. You might turn to it when looking for some great Black Friday deals.

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News for Robo Global Artificial Intelligence ETF ETF (THNQ)