From the earliest agricultural machinery to today’s high-speed welding robots used in manufacturing, we have been automating dull, dirty, and dangerous work for nearly a century. But the realms robotics have recently entered have far exceeded what humans previously imagined possible. Just as the Internet transformed how we work and communicate, robotics and artificial intelligence (AI) are changing the fundamental structure of sectors across the economy.
Drones are being used to survey the health of crops, surgical robots are conducting over one million procedures each year , and autonomous vehicles are making delivery treks. This is all being made possible due to the convergence of declining technology costs, increasingly reliable performance capabilities, and the availability of massive amounts of data fueling machine learning and intelligence.
For investors, the name of the game is to look toward the growth and disruption potential of the technologies of tomorrow. Since the ROBO Global Robotics & Automation Index ETF (NYSE: ROBO) was established in 2013, a dozen competing strategies have come to market around the world. ROBO Global combines active research with industry experts to take a forward-looking view of the opportunities. Our ETF provides investors with pure-play exposure to best-in-class robotics and automation companies as well as enabling technologies.
Getting to This Moment
When we first launched the ROBO ETF, many investors were not attuned to the expansive potential of robotics and automation beyond factory applications. Yet, we saw the signs forming and believed that it was just the beginning of a multi-decade transformation that would influence every aspect of how we, and future generations, live and work. The tremendous growth in robotics and automation is occurring due to a few key factors:
- Improving Technology. We see exponential advances and declining cost curves of key enabling technologies, from computing power to machine vision to voice recognition and machine learning, significantly expanding the scope of robotics and automation applications. Ongoing advances also create opportunities as previous generations of robots and technology must be upgraded.
- Wider Deployment. Robotics and automation are finding applications far beyond manufacturing, bringing greater efficiency to many diverse uses, including automated distribution centers, surgical robots, diagnostics tools, drones, and autonomous vehicles.
- Macro and Social Challenges. These challenges include aging populations and a shortage of skilled workers, the need for greater crop productivity to feed a growing population, healthcare systems running at full capacity yet not reaching the entire population, slow productivity gains, and more recently automation solutions needed to serve a post-pandemic world.
An ETF Approach to Investing in Robotics & Automation
Because robotics and automation cut across traditional industry classifications, we believe active research is essential for identifying best-in-class companies at the forefront of this theme. And because the theme targets rapidly growing areas of the economy, thorough research is vital in ensuring the index portfolio can evolve with the theme. A static index based solely on backward-looking data and historical business models, in contrast, may not capture the fast-changing dynamics of the markets involved.
At ROBO Global, we strive to deliver a research-driven portfolio, focused on providing long-term growth. The time to invest in all that robotics, automation, and AI have to offer may be now, and investors would be wise to consider using the ROBO ETF as a means to gain diversified exposure to this innovation.
To learn more about investing in robotics and the ROBO Global Robotics & Automation Index ETF (Ticker: ROBO), visit www.roboglobaletfs.com/ROBO.
1 Source: Intuitive Surgical