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ETFs at Risk as Accidents Raise Doubts Over Self-Driving Cars
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After a deadly accident involving Uber’s autonomous car in Arizona on Mar 18, the fate of self-driving car technology is in question. Arizona banned Uber from testing vehicles on public roads and the California Department of Motor Vehicles said that Uber has indicated it will not renew its permit to test autonomous vehicles in California.
Chipmaker Nvidia Corp (NVDA - Free Report) said that it has suspended self-driving car tests across the globe, following the Uber debacle. Moreover, a recent accident involving a Tesla Model X has raised concerns over the current progress in self-driving car technology.
Nvidia
Shares of Nvidia suffered huge losses following the announcement, settling 7.8% lower at the end of trading on Mar 27, wiping $11 billion off market cap. The company has seen great support from investors in the past year as self-driving car enthusiasts were encouraged by the company’s leading position as a provider of chips for autonomous vehicles and artificial intelligence.
In fiscal fourth quarter, Nvidia reported revenues of $132 million from its automotive segment, 4.5% of total revenues. However, the company bore the brunt of the recent spate of events. "Nvidia has no choice but to take steps in the context of the fear, uncertainty and outrage likely to be stimulated by a robot car killing a human being," per a Reuters article citing Roger Lanctot, an automotive technology analyst with Strategy Analytics.
Tesla
Earlier last week, a Tesla Model X was involved in a fatal accident that killed the driver and raised concerns over the company’s fate. Although it’s not clear if Tesla’s partial autonomous driving system had been activated at the time of accident, U.S. authorities are examining the situation to judge the cause of the accident.
At a time when Tesla (TSLA - Free Report) is already dealing with doubts over whether it will be able to meet its production targets for the Model 3 sedan, this latest incident adds to Musk’s pressure. The United States Transportation Safety board indicated that it is investigating the accident to evaluate if the mishap was caused by the driver’s negligence or due to the activation of the Autopilot feature.
News of the investigation did not fare well for Elon Musk’s company, as shares of Tesla declined 8.2% at the end of trading on Mar 27. “You’ve got the NTSB investigating a new crash, Nvidia suspending autonomous testing, and Tesla can’t make the Model 3. When the stock goes lower like this, it gets harder to raise capital. It’s going to be harder for them to raise money,” per a Bloomberg article citing John Thompson, the chief executive officer of Vilas Capital Management LLC.
This fund does not track any index in particular as it is an actively managed ETF seeking long-term capital appreciation. It looks for companies that stand to gain from the development of products or services, or technological improvement and advancements in scientific research.
The fund has AUM of $155.9 million and charges a fee of 75 basis points a year. From a sector look, the fund has high exposure to Autonomous Vehicles, Robotics and 3D printing with 36%, 28% and 24% allocation, respectively. The fund has an 8.9% exposure to Tesla and 4.1% to Nvidia. It has returned 0.3% year to date and 37.0% in a year.
This is an actively managed fund like ARKQ, providing significant exposure to domestic technology and health care companies, among others.
The fund has AUM of $737.7 million and charges a fee of 75 basis points a year. From a sector look, the fund has high exposure to 3D printing, Bioinformatics and Gene Therapy with 9%, 8% and 8% allocation, respectively. The fund has a 5.6% exposure to Tesla and 2.4% to Nvidia. It has returned 6.2% year to date and 68.5% in a year.
This fund is one of the most popular bets on the semiconductor industry in the U.S. tech sector. It has AUM of $1.6 billion and charges a fee of 48 basis points a year. Intel Corporation (INTC - Free Report) , Nvidia and Broadcom Ltd (AVGO - Free Report) are the top holdings of the fund, with 8.4%, 8.0% and 7.9% allocation, respectively. The fund has returned 33.6% in a year and 6.3% year to date.
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ETFs at Risk as Accidents Raise Doubts Over Self-Driving Cars
After a deadly accident involving Uber’s autonomous car in Arizona on Mar 18, the fate of self-driving car technology is in question. Arizona banned Uber from testing vehicles on public roads and the California Department of Motor Vehicles said that Uber has indicated it will not renew its permit to test autonomous vehicles in California.
Chipmaker Nvidia Corp (NVDA - Free Report) said that it has suspended self-driving car tests across the globe, following the Uber debacle. Moreover, a recent accident involving a Tesla Model X has raised concerns over the current progress in self-driving car technology.
Nvidia
Shares of Nvidia suffered huge losses following the announcement, settling 7.8% lower at the end of trading on Mar 27, wiping $11 billion off market cap. The company has seen great support from investors in the past year as self-driving car enthusiasts were encouraged by the company’s leading position as a provider of chips for autonomous vehicles and artificial intelligence.
In fiscal fourth quarter, Nvidia reported revenues of $132 million from its automotive segment, 4.5% of total revenues. However, the company bore the brunt of the recent spate of events. "Nvidia has no choice but to take steps in the context of the fear, uncertainty and outrage likely to be stimulated by a robot car killing a human being," per a Reuters article citing Roger Lanctot, an automotive technology analyst with Strategy Analytics.
Tesla
Earlier last week, a Tesla Model X was involved in a fatal accident that killed the driver and raised concerns over the company’s fate. Although it’s not clear if Tesla’s partial autonomous driving system had been activated at the time of accident, U.S. authorities are examining the situation to judge the cause of the accident.
At a time when Tesla (TSLA - Free Report) is already dealing with doubts over whether it will be able to meet its production targets for the Model 3 sedan, this latest incident adds to Musk’s pressure. The United States Transportation Safety board indicated that it is investigating the accident to evaluate if the mishap was caused by the driver’s negligence or due to the activation of the Autopilot feature.
News of the investigation did not fare well for Elon Musk’s company, as shares of Tesla declined 8.2% at the end of trading on Mar 27. “You’ve got the NTSB investigating a new crash, Nvidia suspending autonomous testing, and Tesla can’t make the Model 3. When the stock goes lower like this, it gets harder to raise capital. It’s going to be harder for them to raise money,” per a Bloomberg article citing John Thompson, the chief executive officer of Vilas Capital Management LLC.
Let us now discuss a few ETFs focused on providing exposure to the stocks discussed (read: 4 ETFs to Join The Sustainable Investing Trend).
ARK Industrial Innovation ETF (ARKQ - Free Report)
This fund does not track any index in particular as it is an actively managed ETF seeking long-term capital appreciation. It looks for companies that stand to gain from the development of products or services, or technological improvement and advancements in scientific research.
The fund has AUM of $155.9 million and charges a fee of 75 basis points a year. From a sector look, the fund has high exposure to Autonomous Vehicles, Robotics and 3D printing with 36%, 28% and 24% allocation, respectively. The fund has an 8.9% exposure to Tesla and 4.1% to Nvidia. It has returned 0.3% year to date and 37.0% in a year.
ARK Innovation ETF (ARKK - Free Report)
This is an actively managed fund like ARKQ, providing significant exposure to domestic technology and health care companies, among others.
The fund has AUM of $737.7 million and charges a fee of 75 basis points a year. From a sector look, the fund has high exposure to 3D printing, Bioinformatics and Gene Therapy with 9%, 8% and 8% allocation, respectively. The fund has a 5.6% exposure to Tesla and 2.4% to Nvidia. It has returned 6.2% year to date and 68.5% in a year.
iShares PHLX Semiconductor ETF (SOXX - Free Report)
This fund is one of the most popular bets on the semiconductor industry in the U.S. tech sector. It has AUM of $1.6 billion and charges a fee of 48 basis points a year. Intel Corporation (INTC - Free Report) , Nvidia and Broadcom Ltd (AVGO - Free Report) are the top holdings of the fund, with 8.4%, 8.0% and 7.9% allocation, respectively. The fund has returned 33.6% in a year and 6.3% year to date.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>