First Trust, one of the largest issuers of smart beta exchange-traded funds (ETFs) and industry funds, introduced the First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT) on Thursday. The debut of the new fund makes First Trust the third ETF issuer to enter the arena of funds focusing on the rapidly growing artificial intelligence and robotics investment themes.

ROBT tracks the Nasdaq CTA Artificial Intelligence and Robotics Index. Home to 88 components, that index "is designed to track the performance of companies engaged in the artificial intelligence and robotics segment of the technology, industrial, medical and other economic sectors. The Index includes companies in artificial intelligence or robotics that are classified as either enablers, engagers or enhancers," according to Nasdaq. (See also: Investing in Robotics Through ETFs and Stocks.)

ROBT's underlying index includes familiar technology names, such as Google parent Alphabet Inc. (GOOGL), Apple Inc. (AAPL), Facebook, Inc. (FB), Intel Corporation (INTC), Intuitive Surgical, Inc. (ISRG) and NVIDIA Corporation (NVDA).

Companies in ROBT are grouped into one of three categories – enablers, engagers or enhancers. Enablers are considered to be the firms "that develop the building block components for robotics or AI, such as advanced machinery, autonomous systems/self-driving vehicles, semiconductors, and databases used for machine learning," according to First Trust. Engagers are "companies that design, create, integrate, or deliver robotics and/or AI in the form of products, software, or systems," said the issuer. Finally, enhancers bring their own value-added products and services to the artificial intelligence and robotics chains.

First Trust's ROBT ETF faces stiff, entrenched competition from the ROBO Global Robotics & Automation Index ETF (ROBO), among others. ROBO debuted in October 2013 and has experienced rapid growth in recent years, swelling to $2.3 billion in assets under management. Speaking of rapid growth, the Global X Robotics & Artificial Intelligence ETF (BOTZ) does not turn two until mid-September, but that ETF also has $2.3 billion in assets, indicating that ROBT has its work cut out for it thanks to the competition from BOTZ and ROBO.

A frequently used tactic by ETF issuers arriving late to an already occupied corner of the market is to undercut existing competition on fees. First Trust's ROBT does just that – the new ETF has an annual expense ratio of 0.65%, or $65 on a $10,000 investment. That is three basis points cheaper than BOTZ and 30 basis points below the fee found on ROBO. (For additional reading, check out: Robot ETFs Are Coming of Age.)