ETFs for AI, Robotics and CyberSecurity

I think technology will pay a big part in modernising industry. Labour is becoming increasingly expensive while AI and robotics now have big advantages. Robots can work 24 hours a day, they don't need toilet breaks or get hangovers or go on strike. They are cheap to run and work really fast.

Self-driving cars are a distraction however. Like NASA developing rockets to get us to the moon when really the super-powers just wanted the technology to develop nuclear ICBMs, with AI and robotics, we develop this technology to then build semi-dedicated robots to replace our human workforce.

AI robots can also be good for the environment. Consider a small robot vehicle with four legs, cameras, GPS, LED lights and pincers for arms. Now train it to recognise wheat plants and weeds and set it down in your newly-planted field of wheat. It will work 24/7 in that field and de-weed it for you without pay! It will have a solar powered charging station to dock with every few hours. No weed killers needed! Now also equip it with an insecticide spray and train it to only spray wheat plants which show signs of infestation. This reduces the use and cost of insecticides and means more environmentally-friendly ones can be used.

Such devices have already been developed!

ETFs

So I am picking two ETFs for my 'risky but high returns' experimental portfolio:

• ARKI Artificial Intelligence & Robotics (Actively managed)
• USPY L&G Cyber Security

ARKI: actively-managed AI

The ARK Artificial Intelligence & Robotics UCITS ETF USD Accumulating is an actively managed ETF.

The ETF invests in companies from around the world that are expected to benefit from the increased adoption and utilization of robotics and artificial intelligence. The stocks included are filtered according to ESG criteria (environmental, social and corporate governance).

 

The ETF's TER (total expense ratio) amounts to 0.75% p.a.. The ARK Artificial Intelligence & Robotics UCITS ETF USD Accumulating is the only ETF that tracks the ARK Artificial Intelligence & Robotics index. The ETF replicates the performance of the underlying index by full replication (buying all the index constituents). The dividends in the ETF are accumulated and reinvested in the ETF.

 

The ARK Artificial Intelligence & Robotics UCITS ETF USD Accumulating is a small ETF with 19m GBP assets under management. The ETF was launched on 12 April 2024 and is domiciled in Ireland.

Since it launched this year, the ARK Artificial Intelligence & Robotics UCITS ETF (LON:ARKI) has performed well as an actively managed fund.

While the ETF only listed in April, it has beaten it's passive competitors like AIAI gained and INTL. ARKI charges an extra 35 basis points in fees but it returns more than double that of the competition.

It is however a volatile stock!

USPY: passive tracker

The L&G Cyber Security UCITS ETF seeks to track the ISE Cyber Security UCITS index. The ISE Cyber Security UCITS index tracks companies actively involved in providing cyber security technology and services.

 

The ETF's TER (total expense ratio) amounts to 0.69% p.a.. The L&G Cyber Security UCITS ETF is the only ETF that tracks the ISE Cyber Security UCITS index. The ETF replicates the performance of the underlying index by full replication (buying all the index constituents). The dividends in the ETF are accumulated and reinvested in the ETF.

 

The L&G Cyber Security UCITS ETF is a very large ETF with 2,004m GBP assets under management. The ETF was launched on 22 September 2015 and is domiciled in Ireland.

Performance

Comparing these two ETFs with a top performing Technology ETF like IITU (one of my favourites), we can see that they both easily have outperformed IITU in the last 6 months.

Buy?

I have both of these on my shopping list. As the price of these two ETFs can be volatile, I will bide my time and buy on a suitable dip.

WARNING: This is not investment advice. Please do your own research. These stocks can be volatile and you may lose money in the short term!