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How to Profit from the Rise of Robotics
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Loading...Do you own a smartwatch that records how many minutes you walk every single day? The wearable technology monitors your health by checking vital medical signs.
But have you ever thought of investing in these innovations? The number of domestic household robots is set to increase to 31 million between 2016 and 2019, up from just 3,700 in 2015, according to the IFR World Robotics Report 2016.
Robotics and the Threat of an Ageing Population:
One major driver of the growth of robotic technologies is ageing population. Developed countries, including UK and the US, Europe and Japan, are quickly becoming unbalanced – with more dependent pensioners than working population. Robots can boost productivity to make up this shortfall between those that are strain on the State and those who contribute.
Tech Giants Snap Up Automation Technology:
Even tech giants are looking to develop automation technology. Amazon (AMZN), the e-commerce company, bought a robotic warehouse system maker Kiva in 2012 – which shows the company’s enthusiasm to adopt automation technology into their delivery business.
UK Government Backs Robotics:
Last November, UK Prime Minister Theresa May pledged to invest £2 billion to back the development of robotics and biotechnology, improving UK’s competitiveness in the global arena.
“We have got something like 31 robots per 10,000 workers outside of automotive whereas countries like Germany you have got 160 robots per 10,000 workers."
Robotics is a Global Phenomenon:
While developed economies are using robots to boost productivity, emerging markets are also increasingly reliant on robotic technology. South Korea has a 35-year history of designing and building robots and an annual growth rate of robot manufacturing of 21% since 2008.
China is looking to robotics in order to meet its ambitious productivity goals, aiming to double per capita income by 2020 from its 2016 levels. Utilisation of robots in manufacturing industries would allow China to increase efficiency and to cut costs further.
Record Inflows into Robotics Funds:
Savvy investors are cottoning on to the profit potential in robotics. Inflows to both active and passive robotics funds since the beginning of the year have seen record levels, data from various platforms showed.
Flows into robotics ETFs and actively managed open-end funds have accelerated significantly over the last 12 months, from an estimated $5 billion to $9 billion over this period.
There are only four robotics ETFs in the world – two in the US and two in Europe. Assets under management for these four ETFs grew from $415 million in December to $1.1 billion in March.
Investors who want a slice of the action can choose between the iShares Automation & Robotics ETF (RBOR) which launched last year, and Robo Global Robotics and Automation GO ETF (ROBO).
Source: Morningstar
Junior Trader Stefan Panteleev
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