AdvisorShares has launched a new actively managed thematic ETF targeting firms supporting the emerging drone economy.
Drones are expected to permeate into numerous segments of the economy.
The AdvisorShares Drone Technology ETF (UAV US) has been listed on NYSE Arca with an expense ratio of 0.99%.
Drones, which include both unmanned aircraft and autonomous vehicles, are expected to permeate into numerous industries.
Apart from their ability to revolutionize commercial deliveries and people transportation, drones are also already being utilized within agriculture, law enforcement, insurance, construction, energy, mining, and real estate.
According to research from Consortiq, a drones industry consultant, the UAV (unmanned aerial vehicle) market alone is set to be worth $92 billion in 2030, representing a 25% compound annual growth rate from its value of $9.5bn in 2020.
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Dan Ahrens, Managing Director at AdvisorShares, said: “As technological innovation evolves, we believe that drone technology will accelerate further and establish itself as an investment growth opportunity with durable and sustainable characteristics.
“Additionally, we feel its potential impact on select industries like transportation can help reduce greenhouse gas emissions by providing mobility services once implemented only by commercial or industrial vehicles.”
The ETF gains its exposure by investing in US-listed equities, including American Depository Receipts, of companies across the market capitalization spectrum. Eligible firms must derive at least 50% of their revenue from researching, developing, utilizing, or providing support services and supplies to drones and autonomous vehicles.
The prospectus notes the ETF will typically select companies with dominant positions in their respective markets as well as those in unique positions for growth and expansion.
The fund is the only ETF to offer exposure to the drone economy theme – a lone competitor, the ETFMG Drone Economy Strategy ETF (IFLY US), effectively shut in April 2020 when it was remodelled into the Wedbush ETFMG Global Cloud Technology ETF.