In June 2014, ROBO Global launched the ROBO Global Robotics and Automation UCITS Index. The firm writes that the index’s unique coverage and methodology means it provides investors with exposure that is highly diversified across countries, sectors and market capitalisation.
Speaking at the World Economic Forum in Davos, Richard Lightbound, Partner and CEO at ROBO Global discussed why Robotics & Automation have become the headline topic for our world leaders.
“Global growth and productivity are clearly challenged across all markets. Robotics & Automation offer huge sustained cost savings and increased productivity. Other factors such as ageing populations, wage inflation, safety and sustainability are driving the need for and adoption of Robotics & Automation to the benefit of society,” he said.
It is estimated that global manufacturing costs currently account for USD6 trillion annually. A recent report by Boston Consulting Group (BCG) discussed how connectivity and interaction among parts, machines, and humans will make production systems as much as 30 per cent faster and 25 per cent more efficient. IFR World Robotics indicated that the worldwide annual supply of industrial robots is growing over 15 per cent per year on average.
Lightbound adds: “What the business community and investors might not realise is that Robotics & Automation is bigger than just the industrial and manufacturing sector. The most significant growth is actually expected from personal and services sectors with 17.4 per cent and 12.3 per cent CAGR between 2010 and 2025 according to BCG. Robotics, Automation and AI have started to penetrate every aspect of our daily lives including work, home, entertainment, security and healthcare.”
Commenting on the rise of Robotics & Automation as a sector, Lightbound added: “This is a very exciting opportunity for investors with Robotics & Automation set to outperform the broader market. If the Davos, governments, industry and media focus on Robotics & Automation is not enough to convince you something big is happening then look at the up-tick in flows of smart corporate money via private placements and M&A. The challenge for investors is ensuring you have broad coverage of the Robotics & Automation sector covering all technologies and applications, as it is too early to pick the winners.”
Howie Li, Co-Head of Canvas at ETF Securities, added: “This industry has really started picking up traction in the past two to three years. Robotics & Automation show exciting growth prospects due to the fact that, in addition to the widespread industrial applications of these, consumer usage is set to expand significantly.
“From an investment perspective, these are high-growth themes that can form part of a diversified equity portfolio for investors who understand that with high growth comes possible volatility. Investors however need to have the appetite to ride potential highs and lows of the sector.”