HSBC launches ETF on China robotics sector
HSBC launched the MSCI China Robotics Usage ETF to provide exposure to China's dominant physical AI sector. The fund tracks 38 companies, with the largest holding being a precision gearbox maker, despite the sector's recent underperformance.
HSBC launched the MSCI China Robotics Usage ETF (ticker BOTS) on Xetra on October 14, with a 0.5% annual fee. The fund tracks 38 companies, 75% from mainland China, requiring at least 50% of revenue from robotics. Only 23% of the index consists of finished robot manufacturers; the rest are in controls, drives, and sensors. The largest holding is LIDA Harmonious Drive (6%), a precision gearbox maker, followed by UB-Tech (4%), which has been loss-making since 2022.
China installed 295,000 industrial robots in 2024, 54% of the global total. However, Chinese robotics stocks are down 41.8% in five years in dollar terms, while the Nasdaq 100 rose 72%. The sector suffers from 'involution' (excessive competition) and price wars. The fund's expected P/E is 38, and it has a small AUM of $13.7 million. The FCC has placed foreign-built robots on its blocklist.
The ETF offers exposure to China's dominant physical AI sector, which is undervalued due to geopolitical risks and domestic price wars, despite strong installation numbers.