Top holdings in BOTZ include Japan's Yaskawa Fanuc and Keyence. The ETF also holds well-known U.S. tech high-fliers Nvidia and Intuitive Surgical. Nvidia is up 122 percent in the past year and was among the top 10 best-performing stocks in the S&P 500 in 2017.
If anything, both are stock bets more concentrated on the developed markets overseas — Japan and Europe. BOTZ has roughly 50 percent of its assets in Japanese stocks and 15 percent in developed Europe. ROBO has 26 percent exposure to Japan and more than 21 percent exposure to developed Europe.
Japan has also started off 2018 hot and the iShares MSCI Japan ETF (EWJ) has been the fastest-selling country ETF this month with over $2 billion in assets, the only country fund among the ETF leaders.
While there are no Chinese stocks held in BOTZ, Jacobs said China is one of the biggest themes to come in the robotics boom as a buyer. While China's history was built on cheap labor it now has to invest in robotics. In China the density of robots per 10,000 workers is between 70 and 80, Jacobs said, compared to 500 robots per 10,000 workers in South Korea. "They need to invest significantly in robotics."
A big difference between the two robotics ETFs that could post greater risk to BOTZ investors is its concentration. It has only 28 holdings, and its top five holdings — which account for roughly 40 of assets — have soared over the past year.
ROBO has 89 holdings, including all of the holdings in BOTZ, but assigns but much smaller weights to them due to its equal weighing approach for stocks.
Global X Funds' Jacobs said the number of holdings in BOTZ is likely to grow over time as more start-ups and smaller companies come to market. "It is more concentrated," he said. "We think it looks closest to an industry fund [e.g. industrials], and that's how people we've been talking to are thinking about the idea of emerging sectors."
The top six holdings in BOTZ are capped at an 8 percent weight each, while the remaining securities are capped at 4.75 percent weightings.
"I think that mainly explains the relative outperformance," Mishra said. "ROBO's underperformance could be due to just timing. Market leaders did exceedingly well last year, whereas some of the smaller players did not do so well."