I am normally a bottom up UK small cap stock picker who uses Stockrank data as an integral part of the selection process. But a podcast last week made me think that I might be missing a trick and that I should apportion a part of my portfolio into ETFs that would give me exposure to thematic niches that are not readily available in the UK.

The catalyst for my change of thinking was a “We Study Billionaires” podcast last week, focusing on Artificial Intelligence and Robotics – see link

https://www.theinvestorspodcas...

The interview is with Martin Ford the author of the book, Rise of the Robots who highlights the effect of FAANG companies (Facebook, Apple, Amazon, Netflix and Google)  and their rapid adoption of Artificial Intelligence. These companies are investing huge sums of money into AI and Robotics as a source of future competitive advantage.

Greater automation and AI  will negatively impact blue collar employment and may decimate the financial industry who will no longer need soo many Quants, Analysts and Advisers.

At the end of the interview a Robotics/AI themed ETF called ROBO gets a brief mention. The ROBO ETF includes 90 Robotics and AI companies from around the world and their YTD gain is an impressive +35%, so it’s a niche that is doing incredibly well.

http://www.morningstar.co.uk/u...

Irrespective of the profitability of the ROBO component companies, what strikes me is that if only a few of them develop effective disruptive technology they are likely be bought out for $billions by the FAANGs of this world. This could be an unusual situation where company revenues, returns and rankings hardly matter.

I have researched this area since and brought into ROBO and another smaller similar themed ETF called BOTZ (up +45% YTD).

Do others have similar AI/Robotics companies or funds in your portfolio?

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