Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT -0.04%) is an exchange-traded fund (ETF) that contains companies in developed markets that are integrally involved in the expansion of artificial intelligence (AI) and robotics. The ETF contains companies across numerous industries and sectors, providing various forms of exposure to businesses playing a vital role in the adoption and utilization of both robotics and artificial intelligence.
If you’re interested in investing in these durable trends, but do not want to invest directly in individual stocks, an ETF could provide instant diversification and exposure to some of the top innovators shaping the future of robotics and artificial intelligence. The fund’s diversification and focus have made it a popular choice with many investors across trading styles and risk tolerance levels. This guide will teach you everything you need to know about this Direxion ETF and how to invest in ETFs.
What is this ETF?
What is 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) aims to provide daily investment returns that are 200% of the Indxx Global Robotics and Artificial Intelligence Thematic Index (IBOTZNT), before fees and expenses.
This index gauges the performance of companies in developed markets that are expected to benefit from the increased use of robotics and artificial intelligence. These include companies that are involved in AI software, industrial robots, autonomous vehicles, surgical robotics, automated inventory management, unmanned vehicles, and voice/image/text recognition.
This Direxion pick is a leveraged ETF and invests at least 80% of its assets in financial instruments including securities and swap agreements. These instruments provide daily leveraged exposure to the index. The ETF provides extensive exposure to companies in developed markets that are poised to benefit from the use of artificial intelligence and robotics now as well as in the long term.
How to buy
How to buy Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT)
- Open your brokerage app: Log into your brokerage account where you handle your investments.
- Search for the ETF: Enter the ticker symbol “UBOT” or the ETF name into the search bar to bring up the ETF’s trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this ETF.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you’re willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Holdings
Holdings of Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT)
This Direxion ETF seeks daily investment results, before fees and expenses, of 200% of the performance of the Indxx Global Robotics and Artificial Intelligence Thematic Index, which features companies with a minimum market capitalization of $100 million and a minimum average daily turnover for the last six months greater than or equal to $2 million.
The ETF concentrates much of its capital in a core group of holdings. Its top 10 holdings are:
- Nvidia (NVDA -3.12%): 13.19%
- Intuitive Surgical (ISRG -4.04%): 10.52%
- ABB (ABBN.Y 0.78%): 9.10%
- Keyence (KYCCF 1.77%): 6.83%
- SMC (SMCA.Y 1.21%): 5.10%
- Dynatrace (DT 1.57%): 4.79%
- Fanuc (FANUY 3.07%): 3.97%
- Daifuku (DFKC.Y 0.76%): 3.55%
- Pegasystems (PEGA -0.59%): 3.49%
- Omron (OMRN.Y 3.2%): 3.13%
The ETF’s top index weightings by sector are as follows:
- Capital goods: 36.56%
- Software and services: 16.14%
- Technology hardware and equipment: 15.16%
- Healthcare equipment and services: 13.76%
- Semiconductors and semiconductor equipment: 13.19%
- Financial services: 2.38%
- Pharmaceuticals, biotechnology and life sciences: 1.28%
- Automobiles and components: 0.69%
- Energy: 0.63%
- Consumer durables and apparel: 0.23%
Should I invest?
Should I invest in Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT)?
Making any investment for your portfolio is a very personal choice. You need to ensure that this ETF aligns with your risk tolerance level and your portfolio’s investment goals. You should also ensure you have a general understanding and interest in investing in trends and companies heavily concentrated in artificial intelligence, robotics, and automation.
This Direxion ETF is a double-leveraged ETF, meaning it aims to double the daily return or percentage change of its underlying index, the Indxx Global Robotics and Artificial Intelligence Thematic Index.
As a leveraged ETF, it uses debt as an instrument to increase its returns. Leveraged ETFs like this one can offer large short-term gains, and amplify the daily gains of an index or benchmark, but they also carry higher risks and expenses.
Nearly all of this ETF’s assets are invested in its top few holdings, meaning it has a very small number of individual stocks. It also primarily invests in companies related to robotics, artificial intelligence, and automation.
Leveraged ETFs are rebalanced daily to maintain leverage ratios. The higher the leverage, the riskier the fund. Whereas many ETFs can contain anywhere from hundreds to thousands of stocks, this ETF contains fewer than 100.
If you’re an investor with a healthy appetite for risk who wants to invest in a more concentrated group of companies involved in blockbuster trends like robotics and artificial intelligence, this ETF could be worth considering. On the other hand, if you don’t want to invest in a leveraged ETF or would prefer to invest in a more diversified fund, you might 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 approximately 1.5%. The dividend is paid on a quarterly basis. The ETF’s yield is right in line with the average S&P 500 stock payment.
Expense ratio
What is 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 fee charged by Direxion for a $10,000 investment in the this ETF would come to around $147. That is on the higher end of expense ratios, considering the average is around 0.50% to 0.80%.
A percentage of mutual fund or ETF assets deducted annually to cover management, operational, and administrative costs.
HIstorical performance
Historical performance of Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT)
This ETF seeks daily investment results of 200% of the performance of the Indxx Global Robotics and Artificial Intelligence Thematic Index that it tracks.
Let’s look at how the ETF has delivered on that objective over the past five years:
|
Ticker |
Metric |
1Y % |
3Y % |
5Y % |
|---|---|---|---|---|
|
UBOT |
Net Asset Value (NAV) |
11.88 |
-18.94 |
1.23 |
|
UBOT |
Market Close |
12.01 |
-18.94 |
0.95 |
|
IBOTZNT |
Performance |
13.17 |
-3.11 |
8.62 |
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The bottom line
The bottom line on Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares (UBOT)
This double-leveraged Direxion ETF aims to provide daily investment returns that are 200% of the performance of the Indxx Global Robotics and Artificial Intelligence Thematic Index, making it a high-risk, potentially high-reward investment option for experienced investors.
Whether you choose to buy shares of leveraged ETF like this one will ultimately be a personal decision. Investors in the fund could also experience magnified volatility. This ETF has habitually underperformed the index it seeks to track, part of which could be a function of the volatility affecting the AI stock space in general.
ETFs like this one use derivatives like borrowing to magnify their exposure to an index. Investors who want exposure to the adoption and utilization of robotics and/or artificial intelligence, including industrial robots and production systems, automated inventory management, unmanned vehicles, and medical robotic instruments may find that this ETF is worth considering.
Investors who consider this fund should understand leverage risk, how daily leveraged investments worked, and have a risk tolerance level to put cash into this type of investment. Regardless, this Direxion ETF should likely represent a small portion of an investor’s overall portfolio.
It is also entirely impossible to invest in these exciting trends by buying shares of individual companies operating in the robotics and artificial intelligence industries, or more traditional funds that contain these companies.
FAQs
Investing in Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares FAQs
What is the dividend yield of UBOT?
The Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X Shares ETF (UBOT) yields approximately 1.5% as of January 2025.
Are Direxion ETFs safe?
Direxion is a financial services company that provides ETFs designed to help investors make short-term trades and take advantage of market trends. The company is known for its leveraged and inverse ETFs, which, while carrying higher risk, can magnify or provide inverse exposure to the daily performance of indexes or specific stocks.
More risk-tolerant investors might find these ETFs worth considering, while newer or risk-averse investors should possibly look elsewhere.
Should I invest in UBOT ETF?
The UBOT ETF is prone to more volatility than many other ETFs due to its double-leveraged structure. It also focuses specifically on companies poised to benefit from trends like automation, artificial intelligence, and robotics. Investors with a healthy appetite for risk and an interest in putting cash to work in these trends might consider a second look at the fund. Otherwise, there are other opportunities to invest in these trends through a more traditional ETF.
