How to Invest in First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)

The First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT 1.3%) offers a sophisticated way to track AI companies, with an emphasis on fundamental analysis.

It does so through an advanced index methodology designed to target companies that meet specific artificial intelligence and robotics criteria, rather than simply buying the largest names in the space.

However, with this added complexity comes higher costs. ROBT may not be the most beginner-friendly ETF. Here’s what you need to know to decide if the First Trust Nasdaq Artificial Intelligence and Robotics ETF is worth choosing over its AI-focused competitors.

Overview

What is First Trust Nasdaq Artificial Intelligence and Robotics ETF?

The First Trust Nasdaq Artificial Intelligence and Robotics ETF is a thematic ETF that tracks the Nasdaq CTA Artificial Intelligence and Robotics index. It is not a mutual fund.

This benchmark takes a more nuanced approach than most AI ETFs by grouping companies into three categories:

1. Enablers, which develop the hardware, software, and infrastructure that form the building blocks of artificial intelligence.
2. Engagers, who design, integrate, or deliver AI-driven products and services.
3. Enhancers, which offer value-added AI capabilities as part of a broader business model, however, AI and robotics are not their primary focus.

Companies are scored across the three categories based on their level of AI involvement, with the top 30 in each category selected. However, the index is not equally split between these groups.

Engagers receive the highest weighting at 60% of the portfolio because they have the most direct AI exposure. Enablers make up 25%, while Enhancers account for15% to provide balance and diversification. Within each group, holdings are equally weighted.

The portfolio is rebalanced quarterly to reset weights and capture relative performance changes, while a semiannual reconstitution ensures the index remains current with evolving AI and robotics developments.

How to invest

How to invest

1. Open your brokerage app: Log in to your brokerage account where you handle your investments.
   
2. Search for the ETF: Enter the ticker or ETF name into the search bar to bring up the ETF's trading page.
   
3. Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this ETF.
   
4. 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.
   
5. Submit your order: Confirm the details and submit your buy order.
   
6. Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

Holdings

Holdings

First Trust Nasdaq Artificial Intelligence and Robotics ETF has a heavy U.S. weighting at 64%, followed by Japan at 9.2%, then the U.K., Israel, South Korea, France, and Taiwan.

The fund holds 100 companies, with 50% classified as technology sector, 22% as industrials, and 9% as healthcare. The remaining holdings are primarily spread across the consumer discretionary and communications sectors, with small allocations to financials, consumer staples, and energy.

The First Trust Nasdaq Artificial Intelligence and Robotics ETF's largest holdings as of late August 2025 are:

1. Symbotic (SYM 7.79%): 2.92%
2. Upstart Holdings (UPST 2.66%): 2.28%
3. AeroVironment (AVAV 9.71%): 2.25%
4. Ocado Group (OCDO 1.29%): 2.22%
5. Palantir Technologies (PLTR 1.42%): 2.14%
6. Synopsys (SNPS -0.91%): 2.07%
7. Recursion Pharmaceuticals (RXRX 4.2%): 2.00%
8. Cadence Design Systems (CDNS 0.2%): 1.91%
9. Gentex (GNTX -1.29%): 1.91%
10. Ambarella (AMBA 3.13%): 1.85%

The portfolio has a large-cap tilt, with an average market cap of $28 billion. Valuations are elevated, with shares trading around 29x price-to-earnings, 2.75x price to sales, and 17x price to cash flow.

Should I invest?

Should I invest?

Only consider First Trust Nasdaq Artificial Intelligence and Robotics ETF if you specifically believe in its index methodology and the “engagers, enablers, enhancers” classification system, along with the resulting weighting across these groups.

There is no single “right” way to invest in AI. This is simply how ROBT's benchmark index approaches selection and weighting compared to competing ETFs. It may under or outperform similar funds at various times.

If you appreciate a more complex, rules-based approach, you may find the fund appealing. But if you're seeking simplicity, this ETF probably isn't a fit.

Note that the ETF has historically lagged the broader market and has shown greater volatility than diversified index ETFs, like S&P 500 funds. Its relatively narrow portfolio means individual stock positions can have an outsized impact on performance, for better or worse.

Moreover, investing in AI and robotics carries idiosyncratic risk. These companies are often priced for growth, with high valuations that may be vulnerable to pullbacks if earnings don’t keep pace. The sector also tends to lack exposure to defensive, non-cyclical industries, which can leave long-term investors more exposed during market downturns.

Dividends

Does the ETF pay a dividend?

The First Trust Nasdaq Artificial Intelligence and Robotics ETF has a 30-day SEC yield of 0.27% as of August 2025. The ETF pays dividends semiannually in December and June. The yield is low because many AI-focused companies reinvest earnings into growth rather than paying dividends.

Expense ratio

What is the ETF's expense ratio?

The expense ratio for First Trust Nasdaq Artificial Intelligence and Robotics ETF is 0.65%, or $65 per $10,000 invested annually. This is higher than both sector and broad market ETFs, and even on the pricey side for a thematic ETF, approaching the cost of some actively managed funds due to its more specialized index methodology.

Historical performance

Historical performance

Since its inception, First Trust Nasdaq Artificial Intelligence and Robotics ETF has generally tracked its benchmark, the Nasdaq CTA Artificial Intelligence and Robotics Index, but has delivered slightly lower returns across most periods due to fee drag.

For example, over the past five years, the fund returned 6.4% annually versus 6.9% for the index.

Where the gap really shows is against the broader market: The S&P 500 has compounded at nearly 16% annually over the same period, far ahead of the ETF.

This underperformance highlights two challenges with thematic funds like this: higher volatility and sector concentration.

While the ETF has at times outpaced the S&P 500 over short stretches, it has struggled to keep up over longer horizons, reflecting the risks of a narrower, more specialized portfolio.

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The bottom line

First Trust Nasdaq Artificial Intelligence and Robotics ETF takes a very involved approach to index construction, breaking the AI and robotics universe into three categories and then assigning different portfolio weights to each group.

While this adds a layer of precision that some investors may appreciate, it also introduces complexity that can make the strategy harder to evaluate and follow compared to simpler, market-cap-weighted thematic ETFs.

The 0.65% expense ratio is on the higher side for a passive ETF and approaches the cost of certain actively managed funds in this space, which could make some investors question whether the additional complexity justifies the fee.

Over the long term, higher costs combined with a specialized weighting methodology may influence performance, so this fund may be best-suited for those who specifically want this unique structure rather than a broader, more conventional approach.

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