The arrival of high speed 5G technology will drive a new wave of growth in the rapidly evolving robotics and artificial intelligence sector, according to one global investment advisory firm.
Richard Lightbound, chief executive EMEA & Asia for ROBO Global, told clients of ETF Securities in Sydney this week, that companies harnessing data through the use of robotics will be at the forefront of developments in the rapidly evolving sector over the next five years.
“It’s no longer just about putting robots into service,” Lightbound said.
“It’s about using those robots to gather data and then redeploy that data elsewhere. There’s no doubt 5G will be the big enabler for future growth.”
Lightbound highlighted logistics and factory automation, agriculture and healthcare as areas that he said stand to benefit the most from the huge advances in sensing technology.
The US-based ROBO Global is in partnership with ETF Securities, which launched the first exchange traded fund in Australia to provide investors with access to global companies focusing on robotics, automation and artificial intelligence technologies.
According to EFT Securities the ETFS ROBO Global Robotics and Automation ETF (ASX: ROBO) has performed strongly this year, returning 15.5% year to date, and ROBO has $126.8 million in funds under management “and was recently upgraded by ratings agency Lonsec to “recommended”.
ETF Securities chief executive Kris Walesby said Australian investors are increasingly becoming aware of the transformative potential offered by robotics and artificial intelligence.
“With few opportunities available locally, ROBO offers a cheap way for investors to gain access to international companies at the forefront of these exciting technologies through our unique partnership with ROBO Global,” Walesby said.
The ROBO Global Robotics and Automation Index tracks the performance of 89 stocks from 12 sub-sectors that have been identified as offering the greatest growth potential. The index captures stocks from 15 countries with North America accounting for 43% of the index followed by Japan on 24%.
According to Lightbound, despite a weaker macroeconomic outlook globally in the first quarter of 2019, earnings estimates for companies in the ROBO index have stabilised and continued to point to earnings per share growth of eight percent for the full year.
“The base case here is that a US-China trade deal will be agreed and that is now largely discounted by equity markets,” he said.
“And while orders of factory automation equipment in China are yet to turn up, they have stopped deteriorating and early signs of credit and manufacturing activity improvements are increasingly clear.”
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