How to Invest in the Drone Industry Now: Diving in to the UAV ETF – DroneLife

Written by Amanda

How to Invest in the Drone Industry Now: Diving in to the UAV ETF  DroneLife

how to invest in the drone industry American RoboticsRecently, some DRONELIFE articles have had a tag line:

[Company name]  is held in the AdvisorShares Drone Technology ETF [NYSE ARCA:UAV], the only ETF dedicated to the drone economy. The AdvisorShares Drone Technology ETF is a thematic investment strategy seeking to capture the growth opportunities in drones and autonomous vehicles (AV).  AdvisorShares is a DRONELIFE sponsor.

At DRONELIFE, we write often about the growth of drones in industry and advanced air mobility – and we take calls and emails every month from individuals who want to know how to invest in the drone industry now.  The AdvisorShares Drone Technology ETF (UAV) is one way to add drones to your portfolio.

Continue reading below, or listen:

An ETF, or exchange-traded fund, is similar to a mutual fund. When investors buy shares of an ETF, they are getting access to a basket of different of stocks.  In the case of UAV, the ETF currently consists of 37 companies that are involved in the drone economy.

“The drone and eVTOL industries are in the early innings and there are a lot of companies jockeying for position,” said Luca Esposito of Coastline Investment Group LLC, one of the early UAV investors. “It is a very competitive environment. This has made it difficult for investors who want exposure to the space. The UAV ETF alleviates a lot of those problems by offering thematic diversification and active portfolio management.”

The portfolio includes companies like Red Cat Holdings (NASDAQ:RCAT), AgEagle Aerial Systems (NYSEAMERICAN:UAVS) and Draganfly (NASDAQ:DPRO), along with military drone manufacturer, AeroVironment (NASDAQ:AVAV). Draganfly and AeroVironment have been in the news lately as they provide drones to Ukraine.

Ondas Holdings (NASDAQ:ONDS) and its subsidiary, American Robotics, provide an example of the expanding applications for drone technology. Their autonomous drones are being used by Chevron to manage, monitor and inspect oil and gas fields.

“When people think of drones, they typically only think hardware,” Esposito said. “The reality is that there is also an incredible amount of AI and software behind these systems. Companies have figured out the ‘Drone-as-a-service,’ recurring revenue business models, and are leveraging the vast amounts of data being collected.”

There are also companies like Qualcomm (NASDAQ:QCOM), Teledyne-FLIR (NYSE:TDY) and NVIDIA (NASDAQ:NVDA) in the ETF that provide chips, sensors and other drone components.

Then there are the leaders in home delivery: Amazon (NASDAQ:AMZN), UPS (NYSE:UPS), FedEx (NYSE:FDX) and Google (GOOG). In the first quarter of 2022, Google’s subsidiary, Wing, completed over 50,000 commercial drone deliveries, up more than three times year-over-year. Levitate Capital predicts that drone logistics will become the fastest growing segment after 2025.

“People want delivery faster than ever, whether it’s products, medicine or food,” Esposito said. “More and more companies are turning to drones to meet that demand and do it efficiently. Walmart just announced the other day that they’re expanding their drone-delivery service to reach 4 million households. Amazon is launching a similar program in California.”

In terms of portfolio composition, at least 25% of UAV will consist of the Aerospace & Defense industry. Another roughly 20% consists of Advanced Air Mobility and eVTOL (electric vertical take-off and landing) companies: i.e., Joby Aviation (NYSE:JOBY), Archer Aviation (NYSE:ACHR), Blade Air Mobility (NASDAQ:BLDE), Lilium (NASDAQ:LILM), EHang Holdings (NASDAQ:EH) and Vertical Aerospace (NYSE:EVTL). Morgan Stanley Research has said that accelerating tech advances and investment in autonomous urban aircraft could create a $1.5 trillion market by 2040.

UAV is the only ETF that targets the drone tech and eVTOL ecosystems. For more information, visit the AdvisorShares website – and keep an eye out for the UAV tag line, to read more about the many players represented.

Read more about the ETF and some of the companies included:

Source: dronelife.com

About the author


Hi there, I am Amanda and I work as an editor at impactinvesting.ai;  if you are interested in my services, please reach me at amanda.impactinvesting.ai

Leave a Comment