How to Invest in Drones Through the Drone ETF 2020

A drone etf 2020 will likely make a significant impact on many industries. The unmanned aerial vehicles are expected to revolutionize commercial deliveries, public safety, insurance, agriculture, mining and more. The global market for drones is projected to grow at an annual rate of 25% to reach $92 billion by 2030, according to industry consultant Consortiq.

While the potential for drones is vast, it’s important to remember that the technology is still in its infancy. The average drone is less than 5 years old, and the average consumer-grade model costs around $1,000. That means that companies that build and manufacture drones aren’t going to be able to turn a profit for quite some time. This doesn’t mean that drone companies aren’t worth investing in, but investors should approach them with caution.

One way to invest in drones is through a focused thematic ETF, such as the AdvisorShares Drone Technology ETF (UAV). The fund aims to provide exposure to companies that benefit from the emerging drone economy. This includes companies that design, develop, utilize and/or supply drones, as well as companies that offer drone-related services.

The fund will focus on companies that generate a majority of their revenue from the drone industry. It will also weight companies based on their share of the total market, revenue, and growth potential. The fund’s initial universe will include 37 companies that qualify as drone economy drivers, including military drone maker AeroVironment (AVAV), consumer drone leader DJI Technology (DJI), and industrial drone maker Red Cat Holdings (RCAT). The fund will also weight firms that make components or accessories for drones, such as Ambarella (AMBA), Qualcomm (QCOM) and Teledyne-FLIR (TDY).

Investors should note that the new UAV fund has an expense ratio of 0.99%. This is on par with other ETFs with comparable objectives and strategies, such as the ARK Autonomous Technology & Robotics ETF (ARKQ) and Innovator Loup Frontier Tech ETF (LOUP).

Another important point to consider is that this new ETF will only be available for accredited investors. In addition, it will have a minimum investment size of $100,000.

In addition, this isn’t the first time an exchange-traded fund company has made a dramatic pivot. For example, ETFMG is best known for its pivot from a lagging Latin American real estate fund to a cannabis-themed fund. It’s also not the first time that an ETF has tried to capitalize on a popular persona. For example, there were efforts to launch an ETF based on music mogul Mario Gabelli and a fund named after Quincy Jones. None of these initiatives ever materialized, though. Despite the challenges, there is still room for innovation in the ETF space. The rebranding of the new drone fund is just another step in that direction.