We believe that robotics and artificial intelligence (AI) is a transformational technological development with the potential todisrupt a range of industries over the coming decades. To further explore this theme, we took a deeper dive into examples of companies leading in four categories targeted by theGlobal X Robotics and Artificial Intelligence ETF (BOTZ):

Industrial Robotics and Automation: FANUC Corp.

While many believe robotics has only recently become a viable technology, some firms have been involved in the space for decades. FANUC, for example, has been a prominent player in the robotics and automation industry since the early 1970s. The firm focuses on industrial automation and is one of the chief suppliers of robotic machinery to the Japanese and US automobile industries.1The company largely focuses on developing computerized numerical control (CNC) systems, which are robotic machines that can be fed specific instructions and then execute on those instructions with a high degree of accuracy and efficiency. An example of these instructions could be to lift up a piece of sheet metal from a stack, press it into a specific shape, and weld it to a car frame.

FANUCs commitment to enhancing the industrial manufacturing process through robotics technology is deep within the firms own DNA; FANUC not only sells robotic tools to customers, but also employs those same robots in its own manufacturing process. FANUC is a forerunner in the lights out manufacturing process wherein its own robots build the products the company sells. The companys factory operates without humans; there isnt even a need for lights or an HVAC system.

We view robotics & AI as a transformational theme because its disruptive force is not limited to industrial manufacturing. Health care is one non-industrial segment that is rapidly adopting robotics technology. Companies such as Intuitive Surgical are pioneering robotic-assisted surgery in an effort to improve patient outcomes. The firm builds robotic devices used in minimally invasive surgeries including wristed instruments that can bend and rotate further than a human hand. These robotic devices enable surgeons to operate with enhanced vision, precision, and control, which can lead to less damage to patients nerves, quicker healing, and smaller scars versus the more traditional human-only way of performing selected surgeries.2

A study published in European Urology revealed that prostate cancer patients who underwent robotic-assisted surgeries had fewer cancer cells, lost less blood, and spent less time recovering in the hospital. Since 2000, the da Vinci robotic surgical system has now been used in more 3 million surgeries.3

Although militaries remain the predominant users of drone technology, commercial usage is accelerating as firms incorporate drones into parcel delivery, agriculture, inspections, and emergency response. According to the FAA, commercial drone usage is expected to grow 10-fold from 2016 to 2021.4

One prominent player in the space is Aerovironment, which develops small unmanned vehicles for both military and commercial applications. The firms military products include tactical unmanned aerial vehicles (UAVs) that can be launched and operated by one soldier in as little as five minutes. These UAVs are capable of streaming video for intelligence gathering and surveillance. Aeroenvironment has also worked on adapting these technologies for commercial uses, including developing UAVs that can be used for analyzing crops and inspecting infrastructure like powerlines and railroad tracks. The companys line of commercial drones can fly up to 45 minutes on pre-programed flight paths and use high definition cameras and multispectral sensors to gather data on a given area.5

Artificial Intelligence: Faro Technologies Inc.

Artificial intelligence (AI) is an essential component to the advancement of robotics technology. AI allows robots to not just execute on human or pre-planned inputs, but also to operate in an unstructured environment and make decisions. In order to carry out these tasks, an essential component of AI is robotic vision or the ability for machines to image and process their surroundings. One firm dedicated to advancing this space is Faro Technologies, which develops high precision imaging devices and software. The application for this technology is virtually boundless; it can create 3D models and measurements of large environments or small goods, compare parts and structures for quality assurance, or rapidly prototype items.6

This software has become particularly popular among factories using the imaging software for automated inspections and calibrations. The software has also found applications in construction for surveying purposes as well as public safety for investigating fires, crime scenes, and accidents.7

Click here to learn more about theGlobal X Robotics & Artificial Intelligence ETF (BOTZ).

As of 10/30/2017, Fanuc Corp was 7.58% of BOTZ, Intuitive Surgical Inc. 7.57%, Aerovironment 0.87%, and Faro Technologies Inc. 0.63%.Click here for current holdings of BOTZ.  Holdings are subject to change. There is no guarantee companies mentioned remain in or out of the Global X Robotics & Artificial Intelligence ETF.

1. RobotWorx, Fanuc Robotics The Industry Leader,

4. Reuters, U.S. Commercial Drone Use to Expand Tenfold by 2021: Government Agency, March 22, 2017.

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This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice and is intended for educational purposes only.

Investing involves risk, including possible loss of principal. The investable universe of companies in which BOTZ may invest may be limited. The Fund invests in securities of companies engaged in Information Technology which can be affected by rapid product obsolescence, and intense industry competition. In addition to normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. The fund is non-diversified.

Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

Carefully consider the Funds investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Funds full or summary prospectus, which may be obtained by calling 1-888-GX-FUND-1 (1.888.493.8631), or by visiting . Read the prospectus carefully before investing.

Global X Management Company LLC serves as an advisor to Global X Funds. The Funds are distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Global X Management Company LLC.