In October 2018 Zion Market Research released a report that stated the global industrial automation market was worth approximately $207.17 billion in 2017. The report projects that it will generate revenue of $321 billion by 2024. This represents a compound annual growth rate (CAGR) of 6.5% between 2018 and 2024.
The Horizons Robotics and Automation Index ETF (TSX:RBOT) offers attractive exposure to this fast-growing sector. The ETF was up 2.48% in late afternoon trading on March 11. It has climbed 11% in 2019 so far.
As far as sector exposure is concerned, the ETF is allocated roughly 45% in technology, 39% in industrials, 13% in healthcare, and less than 2% in energy. The most heavily-weighted country is Japan, which has moved more aggressively to automate than any other in the developed world so far.
The United States and Switzerland round out the top three.
Some of the top holdings include the California-based Intuitive Surgical, which develops, manufactures, and markets robotic products for the healthcare industry.
Japan-based Keyence is the second-largest holding in the fund. Keyence develops and manufactures automation sensors, vision systems, barcode readers, and other instruments. Japan aims to automate all convenience stores by 2025. If it meets this target Keyence will be a big beneficiary.
The ETF may be pricey today after a big bump in early 2019, but it is still worth stacking throughout the year for those who are investing for the long term.
