At Altish, we bring you up to date coverage of the latest in automation and robotics. We do this because these emergent technologies threaten your ability to earn a living, support a family and participate in a functional, fair society. So this post may seem counter-intuitive at first. What if investing in firms at the forefront of robotics and automation was protecting yourself from technological unemployment? Consider it insurance.
Many professional investors buy positions of insurance (e.g. credit default swaps) in case their trading circumstances change… they ‘hedge their bets’. Prudent individuals buy insurance to protect their homes, vehicles and health. If you own shares in robotics manufacturers – you could be confident in your day job, knowing that if the corporate executives swap you out for a machine – you get a slice of the profit. This is by no means supporting technological unemployment, but if things get serious, we need to consider all options.
If you are open to the idea (and it is just an idea) read on:
Nikko Asset Management should be your first port of call. They run an ETF (Exchange Traded Fund) called the Global Robotics Equity Fund. Altish plans on monitoring their performance going forward. This fund has holdings in US, Japanese and European robotics firms – with the main holdings being in Keyence and Rockwell Automation. Nikko’s fund won an industry award in 2015 for the ‘most innovative product’ and indeed – the fund has been well received by investors. Launched in August 2015 with US$1 billion, the fund has now attracted close to US$5 billion – demonstrating the demand for this sort of investment.
But Nikko is not the only player running an ETF in the robotics sector. Robo Global has a fund as well, listed on the NASDAQ: ROBO. This fund is much smaller, with only $90 million in assets, but it has been around since 2013. ROBO monitors over 1,000 different companies across 13 sub-sectors. The ROBO fund has 85 holdings at present (including some currencies) with some of the larger wagers placed on the following firms:
Kuka AG (industrial)
Keyence (machine vision)
Omron Corp (sensors and AI)
Brooks Automation (life sciences)
Faro Technologies (3D imaging)
Nabtesco (industrial and energy)
Yaskawa Electric Corp (industrial e.g. welders, palletisers, painters etc)
Investing in an industry that plans to put you out of business is a tough call. But it seems tough calls will have to be made. Bank of America Merrill Lynch research put out this month shows the robotics industry growing to over US$ 153 billion in 2020. So this is no joke.
That being said, the 2 investment funds listed in this article have not provided stellar returns thus far. Domestic Japanese analysts say that restructuring their manufacturing capabilities away from industrial robots and into service & healthcare robots will provide the platform for significant growth in the sector. Robots – into the public, into your portfolio?