Question: Are there any robotics and Artificial Intelligence ETFs on the ASX and are they a good long-term investment?
Answer (By Paul Rickard): Yes, there is the ROBO from ETF Securities (ROBO is the actual ASX code).
I think it has the potential to be a good long-term investment. Obviously, you have to believe in the industry outlook (growth opportunity) for robotics/automation, and have confidence that the panel ETF Securities has appointed to select the stocks has the expertise to do so.
This all said, the investment is in the higher risk category. That’s not a bad thing – it just means investing with that expectation and not putting all your eggs in the one basket.
Question: Can you suggest any “relatively” safe alternatives to fixed-term cash for our SMSF fund, which we have in term deposits as “ballast” in case the markets crash or substantially correct? The interest rates currently on offer mean that our money is losing value by having it in cash but, with a pretty large share portfolio already, we are reluctant to keep piling into overheated markets.
Answer (By Paul Rickard): If you understand the product and are comfortable taking on a bit more risk, look at some ASX-listed bank hybrid securities. These pay a floating rate of interest that resets relative to the 90-day bank bill. They are, however, a capital instrument, so in a worst case scenario, you could lose your entire, or close to your entire, investment.
In the unlisted category, there are money market or enhanced cash products. Potentially, you could look at one of the funds offered by Smarter Money (https://smitrust.com.au/) or a fund that we have here at Switzer, the Halidon Yield Enhanced Fund (https://www.switzerassetmanagement.com.au/investments/halidon-yield-enhanced-fund/).
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.