Categories
News

How to Invest in Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT)


Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT -0.04%) is an exchange-traded fund (ETF) that accommodates corporations in developed markets which might be integrally concerned in the growth of synthetic intelligence (AI) and robotics. The ETF accommodates corporations throughout quite a few industries and sectors, offering numerous types of publicity to companies taking part in a significant function in the adoption and utilization of each robotics and synthetic intelligence.

A human and artificial intelligence robot touching index fingers.

Picture supply: Getty Photos.

In case you’re in investing in these sturdy tendencies, however are not looking for to make investments straight in particular person shares, an ETF may present prompt diversification and publicity to a number of the high innovators shaping the way forward for robotics and artificial intelligence. The fund’s diversification and focus have made it a preferred selection with many buyers throughout buying and selling types and danger tolerance ranges. This information will educate you every little thing you want to learn about this Direxion ETF and how to invest in ETFs.

What is that this ETF?

What’s the Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares ETF (UBOT)?

The Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares ETF (UBOT) goals to present day by day funding returns which might be 200% of the Indxx International Robotics and Artificial Intelligence Thematic Index (IBOTZNT), earlier than charges and bills.

This index gauges the efficiency of corporations in developed markets which might be anticipated to profit from the elevated use of robotics and synthetic intelligence. These embrace corporations which might be concerned in AI software program, industrial robots, autonomous vehicles, surgical robotics, automated stock administration, unmanned automobiles, and voice/picture/textual content recognition.

This Direxion decide is a leveraged ETF and invests a minimum of 80% of its property in monetary devices together with securities and swap agreements. These devices present day by day leveraged publicity to the index. The ETF offers in depth publicity to corporations in developed markets which might be poised to profit from using synthetic intelligence and robotics now in addition to in the long term.

How to purchase

How to purchase Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT)

  1. Open your brokerage app: Log into your brokerage account the place you deal with your investments.
  2. Seek for the ETF: Enter the ticker symbol “DIA” or the ETF identify into the search bar to deliver up the ETF’s buying and selling web page.
  3. Determine what number of shares to purchase: Think about your funding objectives and the way a lot of your portfolio you need to allocate to this ETF.
  4. Choose order kind: Select between a market order to purchase on the present value or a limit order to specify the utmost value you are keen to pay.
  5. Submit your order: Affirm the main points and submit your purchase order.
  6. Evaluate your buy: Test your portfolio to guarantee your order was stuffed as anticipated and alter your funding technique accordingly.

Holdings

Holdings of Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT)

This Direxion ETF seeks day by day funding outcomes, earlier than charges and bills, of 200% of the efficiency of the Indxx International Robotics and Artificial Intelligence Thematic Index, which options corporations with a minimal market capitalization of $100 million and a minimal common day by day turnover for the final six months better than or equal to $2 million.

The ETF concentrates a lot of its capital in a core group of holdings. Its high 10 holdings are:

  1. Nvidia (NVDA -3.12%): 13.19%
  2. Intuitive Surgical (ISRG -4.04%): 10.52%
  3. ABB (ABBN.Y 0.78%): 9.10%
  4. Keyence (KYCCF 1.77%): 6.83%
  5. SMC (SMCA.Y 1.21%): 5.10%
  6. Dynatrace (DT 1.57%): 4.79%
  7. Fanuc (FANUY 3.07%): 3.97%
  8. Daifuku (DFKC.Y 0.76%): 3.55%
  9. Pegasystems (PEGA -0.59%): 3.49%
  10. Omron (OMRN.Y 3.2%): 3.13%

The ETF’s high index weightings by sector are as follows:

  • Capital items: 36.56%
  • Software program and companies: 16.14%
  • Know-how {hardware} and gear: 15.16%
  • Healthcare gear and companies: 13.76%
  • Semiconductors and semiconductor gear: 13.19%
  • Monetary companies: 2.38%
  • Prescription drugs, biotechnology and life sciences: 1.28%
  • Vehicles and elements: 0.69%
  • Vitality: 0.63%
  • Client durables and attire: 0.23%

Ought to I make investments?

Ought to I make investments in Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT)?

Making any funding to your portfolio is a really private selection. You want to make sure that this ETF aligns together with your danger tolerance degree and your portfolio’s funding objectives. You also needs to guarantee you may have a normal understanding and curiosity in investing in tendencies and firms closely concentrated in synthetic intelligence, robotics, and automation.

This Direxion ETF is a double-leveraged ETF, which means it goals to double the day by day return or proportion change of its underlying index, the Indxx International Robotics and Artificial Intelligence Thematic Index.

As a leveraged ETF, it makes use of debt as an instrument to enhance its returns. Leveraged ETFs like this one can supply giant short-term positive aspects, and amplify the day by day positive aspects of an index or benchmark, however in addition they carry increased dangers and bills.

Almost all of this ETF’s property are invested in its high few holdings, which means it has a really small variety of particular person shares. It additionally primarily invests in corporations associated to robotics, synthetic intelligence, and automation.

Leveraged ETFs are rebalanced day by day to keep leverage ratios. The upper the leverage, the riskier the fund. Whereas many ETFs can include wherever from lots of to hundreds of shares, this ETF accommodates fewer than 100.

In case you’re an investor with a wholesome urge for food for danger who needs to make investments in a extra concentrated group of corporations concerned in blockbuster tendencies like robotics and synthetic intelligence, this ETF could possibly be value contemplating. Alternatively, if you happen to don’t need to make investments in a leveraged ETF or would like to make investments in a extra diversified fund, you may want to look elsewhere.

Dividend

Does Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares pay a dividend?

This Direxion ETF pays a dividend that yields roughly 1.5%. The dividend is paid on a quarterly foundation. The ETF’s yield is true in line with the typical S&P 500 inventory fee.

Expense ratio

What’s Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT)’s expense ratio?

This ETF has a gross expense ratio of 1.47%. The annual payment charged by Direxion for a $10,000 funding in the this ETF would come to round $147. That’s on the upper finish of expense ratios, contemplating the average is round 0.50% to 0.80%.


Expense Ratio

A proportion of mutual fund or ETF property deducted yearly to cowl administration, operational, and administrative prices.

HIstorical efficiency

Historic efficiency of Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT)

This ETF seeks day by day funding outcomes of 200% of the efficiency of the Indxx International Robotics and Artificial Intelligence Thematic Index that it tracks.

Let’s take a look at how the ETF has delivered on that goal over the previous 5 years:

Knowledge Supply: Direxion.

Ticker

Metric

1Y %

3Y %

5Y %

UBOT

Internet Asset Worth (NAV)

11.88

-18.94

1.23

UBOT

Market Shut

12.01

-18.94

0.95

IBOTZNT

Efficiency

13.17

-3.11

8.62

Associated investing matters

The underside line

The underside line on Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT)

This double-leveraged Direxion ETF goals to present day by day funding returns which might be 200% of the efficiency of the Indxx International Robotics and Artificial Intelligence Thematic Index, making it a high-risk, probably high-reward funding choice for knowledgeable buyers.

Whether or not you select to purchase shares of leveraged ETF like this one will in the end be a private determination. Buyers in the fund may additionally expertise magnified volatility. This ETF has habitually underperformed the index it seeks to monitor, a part of which could possibly be a operate of the volatility affecting the AI stock house in normal.

ETFs like this one use derivatives like borrowing to enlarge their publicity to an index. Buyers who need publicity to the adoption and utilization of robotics and/or synthetic intelligence, together with industrial robots and manufacturing techniques, automated stock administration, unmanned automobiles, and medical robotic devices might discover that this ETF is value contemplating.

Buyers who think about this fund ought to perceive leverage danger, how day by day leveraged investments labored, and have a danger tolerance degree to put money into the sort of funding. Regardless, this Direxion ETF ought to seemingly symbolize a small portion of an investor’s general portfolio.

It’s also totally inconceivable to make investments in these thrilling tendencies by shopping for shares of particular person corporations working in the robotics and synthetic intelligence industries, or more traditional funds that include these corporations.

FAQs

Investing in Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares FAQs

What’s the dividend yield of UBOT?

angle-down
angle-up

The Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares ETF (UBOT) yields roughly 1.5% as of January 2025.

Are Direxion ETFs secure?

angle-down
angle-up

Direxion is a monetary companies firm that gives ETFs designed to assist buyers make short-term trades and benefit from market tendencies. The corporate is thought for its leveraged and inverse ETFs, which, whereas carrying increased danger, can enlarge or present inverse publicity to the day by day efficiency of indexes or particular shares.

Extra risk-tolerant buyers would possibly discover these ETFs value contemplating, whereas newer or risk-averse buyers ought to presumably look elsewhere.

Ought to I make investments in UBOT ETF?

angle-down
angle-up

The UBOT ETF is inclined to extra volatility than many different ETFs due to its double-leveraged construction. It additionally focuses particularly on corporations poised to profit from tendencies like automation, synthetic intelligence, and robotics. Buyers with a wholesome urge for food for danger and an curiosity in placing money to work in these tendencies would possibly think about a second take a look at the fund. In any other case, there are different alternatives to make investments in these tendencies via a extra conventional ETF.

Rachel Warren has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Abb, Intuitive Surgical, and Nvidia. The Motley Idiot recommends Fanuc and Pegasystems. The Motley Idiot has a disclosure policy.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *