First Trust launches AI & robotics ETF on Nasdaq

Feb 22nd, 2018 | By | Category: Equities

First Trust has launched the First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT US) on Nasdaq Exchange, providing access to companies globally that are directly exposed to developments in artificial intelligence (AI), robotics and automation technology.

Ryan Issakainen, CFA, senior vice president and ETF Strategist at First Trust

Ryan Issakainen, senior vice president and ETF strategist at First Trust.

Ryan Issakainen, senior vice president and ETF strategist at First Trust, commented, “Many of the technological developments taking place in AI, robotics, and automation are astounding, and we believe there are strong incentives, in both the public and the private sector, to find ways to harness these innovations.

“As a leading provider of thematic ETFs, we are excited to offer ROBT as a way for investors to gain exposure to this dynamic investment theme.”

The fund tracks the Nasdaq CTA Artificial Intelligence and Robotics Index, comprising stocks of companies whose operations are based upon the supply of AI and robotics processes to the technology, industrial, and medical sectors.

To be eligible for inclusion in the index, constituents must have a minimum market capitalization of $250 million and have a minimum three-month average daily dollar trading volume of $3m.

Constituent companies are divided into three categories within the AI and robotics industry: enablers, engagers or enhancers. These three categories follow classification standards of the Consumer Technology Association (CTA).

Enablers are companies that develop the building block components for robotics or artificial intelligence, such as advanced machinery, autonomous systems and self-driving vehicles, semiconductors and databases used for machine learning.

Engagers are companies that design, create, integrate, or deliver robotics and/or artificial intelligence in the form of products, software, or systems.

Enhancers are companies that provide their own value-added services within the AI and robotics ecosystem, but which are not core to their product or service offering.

The index selects the top 30 companies within each category based on an intensity rating by CTA, which captures the perceived degree of a company’s AI/robotics sector involvement.

Dave Gedeon, vice president and head of product development for Nasdaq’s Global Indexes, commented, “It is clear that the growing advances in AI and robotics, while still in early days, are increasing the rate and impact of change. The Nasdaq CTA Artificial Intelligence and Robotics Index is a new way to benchmark the performance of the companies leading the charge in this dynamic sector.”

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