ETFs
3 Tech ETFs Poised to Skyrocket
With artificial intelligence (AI) spreading like wildfire and the world’s growing reliance on technology, the technology sector is off to a strong start in 2024. The Nasdaq-100 Index of technology sector grew by almost 10% year over year. date and 37% over the past year.
As a result, now seems like the right time to invest in the top-performing technology ETFs Robo Global Robotics and Automation Index ETF (ROBOT), Global X Robotics and Artificial Intelligence ETF (BOTZ), and First Trust Cloud Computing ETF (SKY), which are about to skyrocket. These funds are rated A (strong buy) in our POWR Ratings system.
Before we delve deeper into the fundamentals of these ETFs, let’s look at what’s happening in the tech sector.
Artificial intelligence (AI) is rapidly transforming business operations through advanced automation, intelligent recognition and in-depth analysis. OpenAI’s ChatGPT has been a game-changer in the world of technology, redefining the way we work and interact with technology.
With the release of GPT-4o, which integrates audio, vision and text, the company is poised for another breakthrough year. Additionally, ChatGPT’s user base has jumped to over 180.5 millionan increase of 80% compared to 100 million in January 2023.
The AI boom is driving a wave of investment and innovation across the sector. At the same time, the expansion of AI applications opens up vast new growth opportunities within the sector. According to Grand View Research, the global AI market is expected to grow at a CAGR of 36.6% (from 2024 to 2030), reaching $1.81 trillion by 2030.
Additionally, the technology sector is poised to benefit from rate cuts expected this year. Lower interest rates make borrowing cheaper, fueling growth initiatives in the technology sector, which relies heavily on financing its expansion.
In uncertain markets, Exchange Traded Funds (ETFs) provide an attractive option for investors seeking exposure to the technology sector while mitigating risk. Technology ETFs provide diversification by covering a range of securities, offering the potential for high returns at a lower price than individual stock investments. Additionally, the diversification offered by ETFs can help investors hedge against risk, providing protection against market volatility.
Given these favorable trends, let’s look at the fundamentals of the best Tech Stock ETFsstarting with the third choice.
ETF n°3: ETF Robo Global Robotics and Automation Index (ROBOT)
ROBO tracks a global index of companies driving transformative innovations in robotics, automation and artificial intelligence (RAAI), such as companies creating technologies to enable intelligent systems capable of sensing, processing and to take action and the companies that apply these technologies to deliver results. RAAI compatible products. It seeks to track the performance of the ROBO Global Robotics and Automation TR Index.
With $1.27 billion in assets under management, ROBO main titles include Teradyne, Inc. (TER) with a weighting of 2.23%, followed by Zebra Technologies Corporation (ZBRA) at 1.96%, and Kardex Holding AG and Intuitive Surgical, Inc. (ISRG), at 1.91% and 1.86% respectively. It currently has 78 titles in total.
Over the past five days, ROBO’s outflows were $11.44 million and $21.13 million over the past month. Additionally, its expense ratio of 0.95% compares to the category average of 0.65%. The net asset value of the ETF was $56.63 as of May 23, 2024. The fund has gained 9.1% over the past six months and 5.9% over the past year to close the latest trading session at $56.76. It has a beta version of 1.42.
ROBO’s strong fundamentals are reflected in its POWR Ratings. The ETF has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
ROBO has an A rating for Trading and Buy and Hold. The fund is ranked 22nd out of 119 ETFs in Category A. Tech Stock ETFs band. Click here to see all ROBO reviews.
ETF n°2: Global X ETF on robotics and artificial intelligence (BOTZ)
BOTZ seeks to provide market capitalization weighted and selected exposure to companies likely to benefit from the increasing adoption and use of robotics and artificial intelligence, including those involved in robotics and artificial intelligence. industrial automation, non-industrial robots and autonomous vehicles. It tracks the Indxx Global Robotics & Artificial Intelligence thematic index.
The fund has a total of 44 securities. It is main titles include NVIDIA Corporation (NVDA) with a weighting of 10.45%, ABB Ltd. at 9.24%, followed by Intuitive Surgical, Inc. (ISRG) and Keyence Corporation with weightings of 8.24% and 7.90%, respectively.
The fund has an expense ratio of 0.68%, compared to the category average of 0.65%. Over the past three months, BOTZ’s cash inflow was $120.70 million, and over the past year it was $428.41 million. Additionally, the ETF has a beta of 1.50.
BOTZ has gained 22.9% over the past nine months and 20.6% over the past year to close the latest trading session at $31.53. As of May 24, 2024, BOTZ had assets under management (AUM) of $2.76 billion and a NAV of $31.46.
BOTZ’s POWR Ratings reflect a strong outlook. It has an overall grade of A, which equates to a Strong Buy in our proprietary rating system.
BOTZ has an A rating for trading and buying and holding. Among the 119 ETFs in the Technology Stock ETF group, it is ranked 16th.
Beyond what we’ve stated above, we’ve also given BOTZ a Peer rating. Get all BOTZ grades here.
ETF #1: First Trust Cloud Computing ETF (SKY)
Launched and managed by First Trust Advisors LP, SKYY invests in global equity markets. It also invests in growth and value stocks of companies with diversified market capitalizations. Additionally, the fund seeks to track the performance of the ISE CTA Cloud Computing Index using a full replication technique.
As of May 24, SKYY had $3.04 billion in assets under management (AUM) and a NAV of $95.01. Its expense ratio of 0.60% compares to the category average of 0.58%. Additionally, it has a beta version of 1.13.
Funds main titles include Alphabet Inc. (GOOGLE), with a weight of 4.75%, Pure Storage, Inc. (PSTG), with a weight of 4.36%, Nutanix, Inc. (NTNX), with a weighting of 4.33%, and Arista Networks, Inc. (A NET), with a weight of 4.15%. It has a total of 66 titles.
Over the past month, the fund’s net outflow was $27.90 million. SKYY has gained 25.2% over the past nine months and 39.8% over the past year to close the latest trading session at $95.02.
It’s no surprise that SKYY has an A overall rating, which equates to a Strong Buy in our proprietary rating system. Additionally, it has an A rating for Trading and Buy and Hold.
SKYY is ranked #15 in the same group of tech stock ETFs. Click here to also access SKYY’s Peer rating.
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SKYY stock was trading at $94.94 per share as of Tuesday afternoon, down $0.08 (-0.08%). Year to date, SKYY has gained 8.29%, compared to an 11.71% rise in the benchmark S&P 500 during the same period.
About the Author: Shweta Kumari
Shweta’s deep interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make informed investment decisions. More…