IBOT ETF: Question and Answer

Demand for robotics and automation has been growing. The pandemic only hastened ongoing trends in changing demographics and technology where robotics and automated systems are poised to become more widely incorporated into business and life. Shifting demographics and an increasing capability at a lower cost is driving the need for robotics at the industrial and service level. Here we address frequently asked questions about investing in robotics and, specifically, about the VanEck Robotics ETF (IBOT).

• What is a robotics company?
• What is the outlook for the robotics industry?
• What is the investible universe for the VanEck Robotics ETF (IBOT)?
• Is IBOT’s exposure purely a domestic focus or is this global?
• What differentiates IBOT from competitors?
• Where does robotics fit inside my portfolio?
• How can investors buy VanEck ETFs?

What is a robotics company?

A robotics company is a company that designs, develops, manufactures or sells robots or robotics systems for various applications. With advancing technology and complexity, robots can be found anywhere from factories to medical centers to households. Robotics companies often specialize in specific features like machine vision or software, while others create and manufacture complete robotic systems.

What is the outlook for the robotics industry?

The industrial robotics outlook is generally positive, with projections to grow from $50B in 2021 to $90B by 2026.¹ Demand is strong for robotics technology in a variety of industries including manufacturing, healthcare, and logistics. Technological advancements have been driving robotics innovation and making industries more cost effective and efficient. Governments are also investing in the development of robotics technology for economic growth and to sustain labor as shortages become more prevalent.

What is the investible universe for the VanEck Robotics ETF (IBOT)?

The Bluestar Robotics Index tracks the performance of those companies that are involved in robotics, targeting companies that derive at least 50% of their revenues from one or more of seven subthemes. These themes include robots and manufacturing/industrial automation systems, robotic surgical systems, 3D printing, robotics or manufacturing computer aided design or other software, semiconductor manufacturing systems, machine vision, and embedded machine learning chips. Coverage includes global companies in developed markets, providing exposure to the world’s largest markets including China, the world’s leader in industrial robotics demand.faq-banner-cta

Is IBOT’s exposure purely a domestic focus or is this global?

IBOT has a global focus given the industry. The United States, Japan and Europe make up the majority of regions in focus. There is also high exposure to markets like China, the world’s largest market for robots. Many of these companies have had operations set up in China for decades, and they are investing heavily to increase efficiency and productivity.

What differentiates IBOT from competitors?

VanEck Robotics ETF (IBOT) is constructed using diversified subthemes that encompass the contributing segments that go into building robots. IBOT focuses on industrial robotic companies and uses strategic weighting to replicate the industrial robotics market. This is done by splitting the portfolio into seven subthemes that are spread across three tiers.

Tier One (50%)

Robots and Manufacturing/ Industrial Automation Systems
Additive Manufacturing (3D Printing)

Tier Two (25%)

Robotics or Manufacturing Computer Aided Design or Other Software
Machine Vision

Tier Three (25%)

Robotic Surgical Systems
Semiconductor Manufacturing Systems
Embedded Machine Learning Chips

Each subtheme requires a minimum number of companies (30, 15, and 10, respectively) in order to help reduce concentration risk.

Where does robotics fit inside my portfolio?

IBOT is set up to capitalize off of long-term trends like shifting labor demographics, advancing technology, and lower costs to build robots. IBOT should be included in the specialized, growth sector of your portfolio. With a long-term investment horizon, you may consider allocating a portion of your portfolio to benefit from the growth of the robotics industry.