BOTZ Stock Takes the Guesswork Out
The Nasdaq retook the 8,000-point threshold on June 20 and it may be setting up for a move back to its record high achieved on April 29.
But rather than playing the Nasdaq, there are other strategies to assume a more focused approach and target areas of technology that will likely outperform.
I’m talking about next-generation technologies such as robotics, annotation, artificial intelligence (AI), and machine learning.
Other than the obvious behemoth mega-caps, there are numerous companies that may not be as well known but offer investors a great alternative.
A strategic way to take some of the guesswork out of trying to choose the right stock is investing in exchange-traded funds (ETF).
As a stock picker, I rarely look at ETFs, but that doesn’t mean you need to be the same. For instance, beginner investors or those with minimal capital may want a more diversified approach to betting on just one stock.
An intriguing ETF that may satisfy your needs is the Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ), which is up 22.6% this year and has been outperforming the Nasdaq and S&P 500.
Chart courtesy of StockCharts.com
This ETF tracks the Indxx Global Robotics & Artificial Intelligence Thematic Index. It must have at least 80% of its capital invested in that index.
For an ETF, BOTZ stock has a relatively low annual expense ratio of less than 0.7%, which means the cost of holding it in your portfolio won’t take a big chunk out of your return. (Source: “Global X Robotics & Artificial Intelligence ETF (BOTZ),”Yahoo! Finance, last accessed June 20, 2019.)
The BOTZ ETF comprises mid-to-large-cap stocks from around the world, regardless of location.
As far as sector allocation goes, technology is the top area of investment, at 45.8%. Next is industrials at 40.5%, followed by healthcare at 12.3%. (Source: Ibid.)
Former high-flying NVIDIA Corporation (NASDAQ:NVDA) was previously the top holding in the ETF, at 8.7% of the portfolio, but it has since fallen out of the top 10 positions.
And while the top 10 holdings represent about 60.3% of the total, there are only three U.S.-listed stocks: Intuitive Surgical, Inc. (NASDAQ:ISRG), ABB Ltd (NYSE:ABB), and John Bean Technologies Corp (NYSE:JBT). This allows you to invest in good foreign companies in the robotics and AI space that you otherwise might not. (Source: Ibid.)
In my view, Global X Robotics & Artificial Intelligence ETF is a viable strategy to partake in growth areas in the tech sector.
Not only does BOTZ stock allow you to take some of the guesswork out and eliminate the single-stock risk, you get to benefit from a group of some of the top global companies in robotics and AI.