Thematic Investing from a Portfolio Manager’s Perspective
Expectations for innovation are constantly changing. Since the onset of the pandemic, and with the subsequent volatility in technology stocks, investors may feel challenged to identify themes with long-term staying power. This guide was developed for financial professionals with exactly that challenge in mind.
As innovation begets innovation, the COVID-19 pandemic has accelerated the adoption and use of important technologies spurring even more advancement. While the pandemic encouraged an increase, we think of this overarching trend as the continued shift from innovation to utility, where new technologies build on ideas that came before, turning the revolutionary into the day-to-day.
As workplaces regain normalcy, the tools utilized to keep us connected to one another during the pandemic look to have staying power, launching us into a “New Normal.”
The information contained herein is intended for financial professional use only. Any hypothetical model portfolios discussed are provided for illustrative purposes only. This information should not be relied upon for trading purposes or as investment advice, research, or a recommendation by Global X Management LLC (‘Global X’) regarding (i) any fund, (ii) the use or suitability of the model portfolios or (iii) any security in particular. Financial professionals are responsible for making their own independent judgment as to how to use this information.
Investors should carefully consider the investment objectives, risk factors, charges, and expenses of each fund that comprises the model portfolio before investing. For information regarding the funds that comprise the model portfolios, please refer to each funds’ currently available prospectus and statement of additional information. Read the prospectus carefully before investing.
The information presented is not definitive investment advice, should not be relied on as such, and should not be viewed as a recommendation by Global X generally or for any purpose outside of Global X’s model portfolios as of the date indicated. It is presented solely to illustrate Global X’s investment process in developing the model portfolios and its analysis and views of the funds that comprise the model portfolios as of the date indicated. Recommendations are subject to change continually and without notice of any kind and may no longer be true after the date indicated.
The information presented has been developed internally and/or obtained from sources believed to be reliable; however, Global X does not guarantee the accuracy, adequacy or completeness of such information. Predictions, opinions, and other information contained in this presentation are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Any forward-looking statements speak only as of the date they are made, and Global X assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those anticipated.
Home
AI & Robotics
Engineering Tomorrow
Artificial Intelligence (AI) and robotics were once the realm of futurist dreamers. Now, they're an essential part of our society. With the fourth industrial revolution well underway, what are the ramifications for consumers, investors and the way we interact with robots? Michelle Cluver, Portfolio Strategist at Global X ETFs, singles out one specific area that she considers particularly appealing from an investment perspective.
Unmanned Vehicles
and Drones
Self-driving or autonomous vehicles and drones for military, consumer, and commercial uses.
Industrial Robots
and Automation
Robots and robotic automation products and services with a focus on industrial applications, such as smart factories.
Non-industrial
Robotics
AI and robots used for non-industrial applications, such as health care, hospitality, and consumer uses.
Explore more
Rise of the Robots
What’s next for the automation boom?
Read the article
Explore more
Driving toward a lower emission future
MOBILITY
A Future in Green Transportation
The mobility industry is speeding ahead, fueled by a rising demand for cleaner, smarter and more autonomous solutions. Jon Maier, Chief Investment Officer at Global X ETFs, is convinced that electric cars are going to be the vehicles of the future. In certain countries, he says, people are going to have a choice: ‘You either have an electric car or you don't have a car at all.’
scroll to
explore
Visualizing the Market Opportunity
Explore more
A Foundation for
the 21st Century
Storage solutions put investors on cloud nine
Read the article
Navigating the Thematic Multiverse
Foundational Technology
A New Horizon
Cutting-edge digital innovations are making our world intimate, faster and better connected. Among the most promising opportunities is cloud computing – the delivery of IT services over the internet. Unsurprisingly, an increasing number of companies are moving terabytes of data online, potentially leaving themselves vulnerable to cyber threats. Michelle Cluver, Portfolio Strategist at Global X ETFs, delves into the pros and cons of the matter.
Visualizing the Market Opportunity
Global Social Media Revenue
*CAGR: Compound annual growth rate
Source: The Business Research Company data as of Feb 2022
Source: Gartner data as of April 2022
1. Source: Fortune Business Insights, Autonomous Cars Market Size, Share & COVID-19 Impact Analysis, By Type (Fully Autonomous and Semi-Autonomous), By Vehicle Type (Passenger Cars and Commercial Vehicles), and Regional Forecasts, 2021-2028, August 2021
2. Source: Fortune Business Insights, Electric Vehicle Market Size, Share & COVID-19 Impact Analysis, By Vehicle Type (Passenger Car and Commercial Vehicle), By Type (Battery Electric Vehicle (BEV), Plug-In Hybrid Electric Vehicle (PHEV), and Hybrid Electric Vehicle (HEV)) and Regional Forecasts, 2021-2028, September 2021
1. Industrial robots and automation — Robots and robotic automation products and services with a focus on industrial applications such as Smart factories.
2. Non-industrial robotics — Robots and AI used for non-industrial applications, such as health care, hospitality and consumer uses. The global consumer focused robotics space totaled $4.12 billion in sales for 2019. Revenues are expected to grow at a 30.7% CAGR, reaching $32.8 billion by 2027. North America is the largest market currently, due to accelerating adoption of household robots, such as robotic vacuums. Household robots are expected to be the largest market over the forecast period as the demand increases from the Asia-Pacific region.[ii] The market for medial robotics is even larger, valued at $8.31 billion in 2020 and expected to grow at a 22.18% CAGR to reach $28.34 billion by 2026. Robot-assisted surgery has become commonplace across the U.S. and Europe and will be a key driver of market expansion in the coming years.[iii]
3. Unmanned vehicles and drones — Self-driving or autonomous vehicles and drones for military, consumer and commercial uses. Overall, the global drone market generated approximately $22.5 billion in 2020 and is projected to grow at a 13.8% CAGR to reach $42.8 billion by 2025. The Energy industry is the largest commercial player by spend, utilizing the technology for remote monitoring of infrastructure, however transportation and warehousing is expected to be the fastest growing segment over the forecast period.[iv] Despite a growing range of commercial and consumer applications, the military segment still dominates the drone market and further military R&D spending should support near-term growth. The Department of Defense FY 2021 budget requested approximately $7.5 billion for unmanned systems.[v]
$94.83bn
32% CAGR* Growth
2025
2020
$309bn
Read the article
Cloud Application
Services
Cloud System Infrastructure Services
Cloud Application Infrastructure Services
Cloud Business Process Services
Cloud Management and Security Services
18.92%
34.29%
24.24%
7.31%
12.12%
Labels
$???bn
??% CAGR* Growth
2025
Expected to grow to
$80.5bn
Source: Grand View Research, Blockchain Technology Market Size, Share & Trends Analysis Report By Type, By Component, By Application, By Enterprise Size, By End-use, By Region, And Segment Forecasts, 2021 – 2028, March 2021
Source:
1. Grand View Research, 5G Infrastructure Market Size, Share & Trends Analysis Report By Component (Hardware, Services), By Spectrum (Sub-6 GHz, mmWave), By Network Architecture, By Vertical, By Region, And Segment Forecasts, 2021 – 2028, July 2021
2. Mordor Intelligence, Data Center Services Market – Growth, Trends, COVID-19 Impact and Forecasts (2021 – 2026), 2021
3. Mordor Intelligence, Internet of Things (IoT) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 – 2026), 2021
Read the article
Explore more
Finance,
reimagined
Looking into the future of FinTech
Expected Growth in the Internet of Things
49.8% CAGR Growth
13.69% CAGR Growth
10.53% CAGR Growth
82.4%
CAGR Growth
$3.7bn
$394.6bn
2028
2020
Visualizing the Market Opportunity
Fintech
Finance Meets Technology
The financial services industry is no stranger to disruptions. FinTech, one of the most recent breakthroughs, has taken the sector by storm. From Buy Now Pay Later (BNPL) to blockchain-based solutions and digital ledgers, the wealth of new possibilities is increasing on almost a daily basis. Jon Maier, Chief Investment Officer of Global X ETFs, believes this is just the beginning.
The global 5G infrastructure market was valued at
$2.64bn
2020
The global IoT market was valued at
$761.4bn
2020
Expected to grow to
$105.6bn
2028
Expected to grow to
$1,390bn
2026
Expected to grow to
$80.5bn
2028
The global data center services market was valued at
$48.9bn
2020
Data
Centers
5G
Infrastructure
Foundational Technology
FinTech
Mobility
AI & Robotics
$1.64bn
$309bn
31.3% CAGR Growth
2028
2021
$287.36bn
$1,318.22bn
24.3% CAGR Growth
2028
2021
Applications, technologies, and products that utilize artificial intelligence for data analysis, predictive analytics, or task automation.
Visualizing the Market Opportunity
Tapping into a monumental transformative force
13.8%*
14.1%*
29.8%*
*Expected CAGR Growth since 2020
Explore Global X ETFs’ model portfolio insights for
more information on navigating the thematic multiverse
40.2% CAGR Growth
$62.35bn
$997.8bn
2028
2020
Articles
Learn More
Digital Experiences
Global Cloud Computing Spending by Largest Segment
Big Data
Expected growth in blockchain
FinTech Data
Expected Growth in Digital Infrastructure ¹ ²
Connectivity
Expected Growth in Global Market ¹
Autonomous Cars
Expected Growth in Global Market ²
EV
Expected growth in billions
Artificial Intelligence
Expected growth in billions ¹ ² ³
Robotics
,
Read the article
Read the article
Read the article
Read the article
The EV Industry is Speeding Ahead
,
,
3
Terms
Privacy
Cookies
The information contained herein is intended for financial professional use only. Any hypothetical model portfolios discussed are provided for illustrative purposes only. This information should not be relied upon for trading purposes or as investment advice, research, or a recommendation by Global X Management LLC (‘Global X’) regarding (i) any fund, (ii) the use or suitability of the model portfolios or (iii) any security in particular. Financial professionals are responsible for making their own independent judgment as to how to use this information.
Investors should carefully consider the investment objectives, risk factors, charges, and expenses of each fund that comprises the model portfolio before investing. For information regarding the funds that comprise the model portfolios, please refer to each funds’ currently available prospectus and statement of additional information. Read the prospectus carefully before investing.
The information presented is not definitive investment advice, should not be relied on as such, and should not be viewed as a recommendation by Global X generally or for any purpose outside of Global X’s model portfolios as of the date indicated. It is presented solely to illustrate Global X’s investment process in developing the model portfolios and its analysis and views of the funds that comprise the model portfolios as of the date indicated. Recommendations are subject to change continually and without notice of any kind and may no longer be true after the date indicated.
The information presented has been developed internally and/or obtained from sources believed to be reliable; however, Global X does not guarantee the accuracy, adequacy or completeness of such information. Predictions, opinions, and other information contained in this presentation are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Any forward-looking statements speak only as of the date they are made, and Global X assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those anticipated.
Explore Global X ETFs’ model portfolio insights for
more information on navigating the thematic multiverse
Learn More
1. Industrial robots and automation — Robots and robotic automation products and services with a focus on industrial applications such as Smart factories.
2. Non-industrial robotics — Robots and AI used for non-industrial applications, such as health care, hospitality and consumer uses. The global consumer focused robotics space totaled $4.12 billion in sales for 2019. Revenues are expected to grow at a 30.7% CAGR, reaching $32.8 billion by 2027. North America is the largest market currently, due to accelerating adoption of household robots, such as robotic vacuums. Household robots are expected to be the largest market over the forecast period as the demand increases from the Asia-Pacific region.[ii] The market for medial robotics is even larger, valued at $8.31 billion in 2020 and expected to grow at a 22.18% CAGR to reach $28.34 billion by 2026. Robot-assisted surgery has become commonplace across the U.S. and Europe and will be a key driver of market expansion in the coming years.[iii]
3. Unmanned vehicles and drones — Self-driving or autonomous vehicles and drones for military, consumer and commercial uses. Overall, the global drone market generated approximately $22.5 billion in 2020 and is projected to grow at a 13.8% CAGR to reach $42.8 billion by 2025. The Energy industry is the largest commercial player by spend, utilizing the technology for remote monitoring of infrastructure, however transportation and warehousing is expected to be the fastest growing segment over the forecast period.[iv] Despite a growing range of commercial and consumer applications, the military segment still dominates the drone market and further military R&D spending should support near-term growth. The Department of Defense FY 2021 budget requested approximately $7.5 billion for unmanned systems.[v]
AI and robots used for non-industrial applications, such as health care, hospitality, and consumer uses.
Non-industrial
Robotics
Robots and robotic automation products and services with a focus on industrial applications, such as smart factories.
Industrial Robots
and Automation
Self-driving or autonomous vehicles and drones for military, consumer, and commercial uses.
Unmanned Vehicles
and Drones
Expected growth in billions ¹ ² ³
,
,
Robotics
40.2% CAGR Growth
$62.35bn
$997.8bn
2028
2020
Expected growth in billions
Artificial Intelligence
Applications, technologies, and products that utilize artificial intelligence for data analysis, predictive analytics, or task automation.
Visualizing the Market Opportunity
AI & Robotics
Engineering Tomorrow
Artificial Intelligence (AI) and robotics were once the realm of futurist dreamers. Now, they're an essential part of our society. With the fourth industrial revolution well underway, what are the ramifications for consumers, investors and the way we interact with robots? Michelle Cluver, Portfolio Strategist at Global X ETFs, singles out one specific area that she considers particularly appealing from an investment perspective.
Read the article
Tapping into a monumental transformative force
1. Source: Fortune Business Insights, Autonomous Cars Market Size, Share & COVID-19 Impact Analysis, By Type (Fully Autonomous and Semi-Autonomous), By Vehicle Type (Passenger Cars and Commercial Vehicles), and Regional Forecasts, 2021-2028, August 2021
2. Source: Fortune Business Insights, Electric Vehicle Market Size, Share & COVID-19 Impact Analysis, By Vehicle Type (Passenger Car and Commercial Vehicle), By Type (Battery Electric Vehicle (BEV), Plug-In Hybrid Electric Vehicle (PHEV), and Hybrid Electric Vehicle (HEV)) and Regional Forecasts, 2021-2028, September 2021
Expected Growth in Global Market ²
EV
$287.36bn
$1,318.22bn
24.3% CAGR Growth
2028
2021
Expected Growth in Global Market ¹
Autonomous Cars
$1.64bn
$309bn
2028
2021
31.3% CAGR Growth
Visualizing the Market Opportunity
MOBILITY
A Future
in Green Transportation
The mobility industry is speeding ahead, fueled by a rising demand for cleaner, smarter and more autonomous solutions. Jon Maier, Chief Investment Officer at Global X ETFs, is convinced that electric cars are going to be the vehicles of the future. In certain countries, he says, people are going to have a choice: ‘You either have an electric car or you don't have a car at all.’
Read the article
Source: Grand View Research, Blockchain Technology Market Size, Share & Trends Analysis Report By Type, By Component, By Application, By Enterprise Size, By End-use, By Region, And Segment Forecasts, 2021 – 2028, March 2021
Source:
1. Grand View Research, 5G Infrastructure Market Size, Share & Trends Analysis Report By Component (Hardware, Services), By Spectrum (Sub-6 GHz, mmWave), By Network Architecture, By Vertical, By Region, And Segment Forecasts, 2021 – 2028, July 2021
2. Mordor Intelligence, Data Center Services Market – Growth, Trends, COVID-19 Impact and Forecasts (2021 – 2026), 2021
3. Mordor Intelligence, Internet of Things (IoT) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 – 2026), 2021
Expected Growth in the Internet of Things
3
10.53% CAGR Growth
The global IoT market was valued at
$761.4bn
2020
Expected to grow to
$1,390bn
2026
Expected Growth in Digital Infrastructure ¹ ²
,
Connectivity
49.8% CAGR Growth
13.69% CAGR Growth
The global 5G infrastructure market was valued at
$2.64bn
2020
Expected to grow to
$105.6bn
2028
Expected to grow to
$80.5bn
2028
The global data center services market was valued at
$48.9bn
2020
Data
Centers
5G
Infrastructure
82.4%
CAGR Growth
$3.7bn
$394.6bn
2028
2020
Expected growth in blockchain
FinTech Data
Visualizing the Market Opportunity
Fintech
Finance Meets Technology
The financial services industry is no stranger to disruptions. FinTech, one of the most recent breakthroughs, has taken the sector by storm. From Buy Now Pay Later (BNPL) to blockchain-based solutions and digital ledgers, the wealth of new possibilities is increasing on almost a daily basis. Jon Maier, Chief Investment Officer of Global X ETFs, believes this is just the beginning.
Read the article
Source: Gartner data as of April 2022
Global Cloud Computing Spending by Largest Segment
Big Data
Global Social Media Revenue
Digital Experiences
$94.83bn
$309bn
32% CAGR* Growth
2025
2020
*CAGR: Compound annual growth rate
Source: The Business Research Company data as of Feb 2022
Visualizing the Market Opportunity
Foundational Technology
A New Horizon
Cutting-edge digital innovations are making our world intimate, faster and better connected. Among the most promising opportunities is cloud computing – the delivery of IT services over the internet. Unsurprisingly, an increasing number of companies are moving terabytes of data online, potentially leaving themselves vulnerable to cyber threats. Michelle Cluver, Portfolio Strategist at Global X ETFs, delves into the pros and cons of the matter.
Read the article
Navigating the Thematic Multiverse
As innovation begets innovation, the COVID-19 pandemic has accelerated the adoption and use of important technologies spurring even more advancement. While the pandemic encouraged a step up in use, we think of this overarching trend as the continued shift from innovation to utility, where new technologies build on ideas that came before, turning the revolutionary into the day-to-day.
As workplaces regain normalcy, the tools utilized to keep us connected to one another during the pandemic look to have staying power, launching us into a “New Normal” of technology.
scroll to
explore
Thematic Investing from a Portfolio Manager’s Perspective
Expectations for innovation are constantly changing. Since the onset of the pandemic, and with the subsequent volatility in technology stocks, investors may feel challenged to identify themes with long-term staying power. This guide was developed for financial professionals with exactly that challenge in mind.
Home
Foundational Technology
SECTIONS
ARTICLES
FinTech
Mobility
AI & Robotics
Explore more
A Foundation for
the 21st Century
Storage solutions put investors on cloud nine
Read the article
Explore more
Finance,
reimagined
Looking into the future of FinTech
Read the article
Explore more
The EV Industry is Speeding Ahead
Driving toward a lower emission future
Read the article
Explore more
Rise of the
Robots
What’s next for the automation boom?
Read the article
Growth in bllions
Foundational technologies are taking the world by storm, with cutting-edge digital innovations making our world intimate, faster, and better connected. Need some examples?
Artificial intelligence, the internet of things and Web 3.0 are already percolating all aspects of our life. And then there’s cloud computing, which encompasses the delivery of IT services like storage and databases over the internet.
According to Michelle Cluver, Portfolio Strategist at Global X ETFs, the transition to the cloud ‘completely changes the way work can happen.’ When Covid-19 heralded the great migration to remote working, thousands of companies needed to transition to storage solutions that were both dynamic and universally accessible. Cloud computing fits the bill.
‘The cloud creates a whole new world of possibilities,’ Cluver explains. ‘In ten years’ time, cloud computing will just be taken for granted.’
That’s one of the reasons why she sees cloud computing as a cornerstone position in a thematic portfolio: ‘We believe now is the time to have exposure. Adoption increases substantially, so it will just become part of the normal index.’
A Digital Foundation For the 21 Century
Foundational Technology
Global X ETFs’ Michelle Cluver reveals how investors can harness cloud computing and cybersecurity
But as companies are moving terabytes of data online, they’re also increasing their exposure to cyberthreats. Yet there are always two ways of looking at things. For Cluver, the growing focus on security will force businesses to strengthen their cyber defenses.
‘It’s an incentive,’ she says. ‘The worse it gets – be it in terms of the number of cyberattacks or the amount each attack is costing – the more companies will direct their attention towards risk management. It’s encouraging them to put the best cybersecurity practices in place.’
That’s translating into investment opportunities. Cybersecurity stocks have performed well over recent months, buoyed by extensive enterprise spend in the light of ransomware and supply chain attacks. It also helps that cybersecurity isn’t typically subject to discretionary spending.
Cluver believes that demand could be fueled by new regulations which, in turn, may mandate ever higher cybersecurity standards.
Hackers beware
– MICHELLE CLUVER
PORTFOLIO STRATEGIST AT GLOBAL X ETFs
“When you take cloud computing to the next level and pair it with artificial intelligence and robotics, you’re talking about innovation that can change the world.”
NEXT
FINTECH
PREV
HOME
The information contained herein is intended for financial professional use only. Any hypothetical model portfolios discussed are provided for illustrative purposes only. This information should not be relied upon for trading purposes or as investment advice, research, or a recommendation by Global X Management LLC (‘Global X’) regarding (i) any fund, (ii) the use or suitability of the model portfolios or (iii) any security in particular. Financial professionals are responsible for making their own independent judgment as to how to use this information.
Investors should carefully consider the investment objectives, risk factors, charges, and expenses of each fund that comprises the model portfolio before investing. For information regarding the funds that comprise the model portfolios, please refer to each funds’ currently available prospectus and statement of additional information. Read the prospectus carefully before investing.
The information presented is not definitive investment advice, should not be relied on as such, and should not be viewed as a recommendation by Global X generally or for any purpose outside of Global X’s model portfolios as of the date indicated. It is presented solely to illustrate Global X’s investment process in developing the model portfolios and its analysis and views of the funds that comprise the model portfolios as of the date indicated. Recommendations are subject to change continually and without notice of any kind and may no longer be true after the date indicated.
The information presented has been developed internally and/or obtained from sources believed to be reliable; however, Global X does not guarantee the accuracy, adequacy or completeness of such information. Predictions, opinions, and other information contained in this presentation are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Any forward-looking statements speak only as of the date they are made, and Global X assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those anticipated.
But the good news doesn’t end there. Both cybersecurity and cloud companies offer recurring revenue – or, the predictable part of a business’s revenue that is likely to continue. As Cluver puts it: ‘It’s a great type of revenue model when you’re looking at an investment.’
On the whole, she expects the increasing blur of our online and offline lives to create new opportunities.
‘On a consumer level, it’s just a little bit of fun. But when you take cloud computing to the next level and pair it with artificial intelligence and robotics, you’re talking about innovation that can change the world.’
Cornerstone for the future
Home
Foundational Technology
FinTech
Mobility
AI & Robotics
st
Terms
Privacy
Cookies
The information contained herein is intended for financial professional use only. Any hypothetical model portfolios discussed are provided for illustrative purposes only. This information should not be relied upon for trading purposes or as investment advice, research, or a recommendation by Global X Management LLC (‘Global X’) regarding (i) any fund, (ii) the use or suitability of the model portfolios or (iii) any security in particular. Financial professionals are responsible for making their own independent judgment as to how to use this information.
Investors should carefully consider the investment objectives, risk factors, charges, and expenses of each fund that comprises the model portfolio before investing. For information regarding the funds that comprise the model portfolios, please refer to each funds’ currently available prospectus and statement of additional information. Read the prospectus carefully before investing.
The information presented is not definitive investment advice, should not be relied on as such, and should not be viewed as a recommendation by Global X generally or for any purpose outside of Global X’s model portfolios as of the date indicated. It is presented solely to illustrate Global X’s investment process in developing the model portfolios and its analysis and views of the funds that comprise the model portfolios as of the date indicated. Recommendations are subject to change continually and without notice of any kind and may no longer be true after the date indicated.
The information presented has been developed internally and/or obtained from sources believed to be reliable; however, Global X does not guarantee the accuracy, adequacy or completeness of such information. Predictions, opinions, and other information contained in this presentation are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Any forward-looking statements speak only as of the date they are made, and Global X assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those anticipated.
NEXT
FINTECH
PREV
HOME
Global X ETFs’ Michelle Cluver reveals how investors can harness
cloud computing and cybersecurity
Foundational technologies are taking the world by storm, with leading-edge digital innovations making our planet smaller, faster, and better connected. Need some examples?
Artificial intelligence, the internet of things and Web 3.0 are already percolating all aspects of our life. And then there’s cloud computing, which encompasses the delivery of IT services like storage and databases over the internet.
According to Michelle Cluver, VP and Portfolio Strategist at Global X ETFs, the transition to the cloud ‘completely changes the way work can happen.’ When Covid-19 heralded the great migration to remote working, thousands of companies needed to transition to storage solutions that were both dynamic and universally accessible. Cloud computing fit the bill.
‘The cloud creates a whole new world of possibilities,’ Cluver explains. ‘In ten years’ time, cloud computing will just be taken for granted.’
That’s one of the reasons why she sees cloud computing as a cornerstone position in a thematic portfolio: ‘We believe now is the time to have exposure. Adoption increases substantially, so it will just become part of the normal index.’
But as companies are moving terabytes of data online, they’re also increasing their exposure to cyberthreats. Yet there’s always two ways of looking at things. For Cluver, the growing focus on security will force businesses to strengthen their cyberdefences.
‘It’s an incentive,’ she says. ‘The worse it gets – be it in terms of the number of cyberattacks or the amount each attack is costing – the more companies will direct their attention towards risk management. It’s encouraging them to put the best cybersecurity practices in place.’
That’s translating into investment opportunities. Cybersecurity stocks have performed well over recent months, buoyed by extensive enterprise spend in the light of ransomware and supply chain attacks. It also helps that cybersecurity isn’t typically subject to discretionary spending.
Cluver believes that demand could be fuelled by new regulations which, in turn, may mandate ever higher cybersecurity standards.
But the good news doesn’t end there. Both cybersecurity and cloud companies offer recurring revenue – or, the predictable part of a business’s revenue that is likely to continue. As Cluver puts it: ‘It’s a great type of revenue model when you’re looking at an investment.’
On the whole, she expects the increasing blur of our online and offline lives to create new opportunities.
‘On a consumer level, it’s just a little bit of fun. But when you take cloud computing to the next level and pair it with artificial intelligence and robotics, you’re talking about innovation that can change the world.’
Cornerstone for the future
Hackers beware
– Michelle Cluver
portfolio strategist at Global X ETFs
“When you take cloud computing to the next level and pair it with artificial intelligence and robotics, you’re talking about innovation that can change the world.”
A Digital Foundation For the 21 Century
st
Foundational Technology
Fintech is reshaping finance, with the pandemic having served as an accelerant. This includes transforming digital payments into social media, reimagining the possibilities of lending, and providing banking access to the previously underbanked – be it in developed or international markets.
Jon Maier, Chief Investment Officer at Global X ETFs, believes fintech is a disruptive force impacting the world by changing habits in payments, online banking, and alternative lending.
One of the fastest growing segments in the fintech space is Buy Now Pay Later (BNPL), a service that lets customers pay in instalments over time. According to Maier, BNPL has transformed online shopping.
‘The share of e-commerce transactions paid by BNPL continues to rise globally,’ he says.
If the economy weakens and consumers become more strapped, they may resort to this method even more, Maier believes.
He also expects blockchain-based solutions and digital ledgers to gain importance – not least because of their impact on the way payments are transmitted and money is managed, invested and lent.
‘There has been a growing overlap between blockchain technology and fintech solutions and we expect that to only increase over time,’ he says.
Why FinTech Might Be the Future of Finance
Fintech is reshaping the way we transfer, invest and manage money
Propelled by the pandemic, fintech is now moving into the mass adoption stage.
‘Covid-19 has put the adoption of financial technology into overdrive,’ Maier says. ‘It highlighted the need for cross-generational technological savviness, because if you aren’t connected, where are you?’
But even though fintech solutions require some level of technological understanding, they’re not restricted to the most computer-literate among us.
‘Fintech isn’t just for young people. It’s also for older generations who are increasingly being forced to use and becoming adept with these new technologies. Baby boomers, for example, are the fastest growing demographic for fintech,’ Maier points out.
Fintech also plays an important role in bridging geographic divides, he explains. ‘It’s helping emerging markets, which struggle with a lack of financial infrastructure, by providing an opportunity for underserved populations to access money and interact with the developed world.’
The disruptive potential, global reach and efficiency make fintech attractive to investors. Or, as Maier puts it: ‘By not having exposure to fintech, you may be missing out on some of the most transformational developments that are currently occurring within the financial services industry.’
Fintech is for everyone
– JON MAIER
CHIEF INVESTMENT OFFICER AT GLOBAL X ETFs
“By not having exposure to fintech, you may be missing out on some of the most transformational developments that are currently occurring in the financial services industry.”
FINTECH
The information contained herein is intended for financial professional use only. Any hypothetical model portfolios discussed are provided for illustrative purposes only. This information should not be relied upon for trading purposes or as investment advice, research, or a recommendation by Global X Management LLC (‘Global X’) regarding (i) any fund, (ii) the use or suitability of the model portfolios or (iii) any security in particular. Financial professionals are responsible for making their own independent judgment as to how to use this information.
Investors should carefully consider the investment objectives, risk factors, charges, and expenses of each fund that comprises the model portfolio before investing. For information regarding the funds that comprise the model portfolios, please refer to each funds’ currently available prospectus and statement of additional information. Read the prospectus carefully before investing.
The information presented is not definitive investment advice, should not be relied on as such, and should not be viewed as a recommendation by Global X generally or for any purpose outside of Global X’s model portfolios as of the date indicated. It is presented solely to illustrate Global X’s investment process in developing the model portfolios and its analysis and views of the funds that comprise the model portfolios as of the date indicated. Recommendations are subject to change continually and without notice of any kind and may no longer be true after the date indicated.
The information presented has been developed internally and/or obtained from sources believed to be reliable; however, Global X does not guarantee the accuracy, adequacy or completeness of such information. Predictions, opinions, and other information contained in this presentation are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Any forward-looking statements speak only as of the date they are made, and Global X assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those anticipated.
Home
Foundational Technology
FinTech
Mobility
AI & Robotics
NEXT
MOBILITY
PREV
Foundational Technology
Terms
Privacy
Cookies
The information contained herein is intended for financial professional use only. Any hypothetical model portfolios discussed are provided for illustrative purposes only. This information should not be relied upon for trading purposes or as investment advice, research, or a recommendation by Global X Management LLC (‘Global X’) regarding (i) any fund, (ii) the use or suitability of the model portfolios or (iii) any security in particular. Financial professionals are responsible for making their own independent judgment as to how to use this information.
Investors should carefully consider the investment objectives, risk factors, charges, and expenses of each fund that comprises the model portfolio before investing. For information regarding the funds that comprise the model portfolios, please refer to each funds’ currently available prospectus and statement of additional information. Read the prospectus carefully before investing.
The information presented is not definitive investment advice, should not be relied on as such, and should not be viewed as a recommendation by Global X generally or for any purpose outside of Global X’s model portfolios as of the date indicated. It is presented solely to illustrate Global X’s investment process in developing the model portfolios and its analysis and views of the funds that comprise the model portfolios as of the date indicated. Recommendations are subject to change continually and without notice of any kind and may no longer be true after the date indicated.
The information presented has been developed internally and/or obtained from sources believed to be reliable; however, Global X does not guarantee the accuracy, adequacy or completeness of such information. Predictions, opinions, and other information contained in this presentation are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Any forward-looking statements speak only as of the date they are made, and Global X assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those anticipated.
NEXT
MOBILITY
PREV
Foundational Technology
Fintech is reshaping the way we transfer, invest and manage money
Fintech is reshaping finance, with the pandemic having served as an accelerant. This includes transforming digital payments into social media, reimagining the possibilities of lending, and providing banking access to the previously underbanked – be it in developed or international markets.
Jon Maier, Chief Investment Officer at Global X ETFs, believes fintech is a disruptive force impacting the world by changing habits in payments, online banking, and alternative lending.
One of the fastest growing segments in the fintech space is Buy Now Pay Later (BNPL), a service that lets customers pay in instalments over time. According to Maier, BNPL has transformed online shopping.
‘The share of e-commerce transactions paid by BNPL continues to rise globally,’ he says.
If the economy weakens and consumers become more strapped, they may resort to this method even more, Maier believes.
He also expects blockchain-based solutions and digital ledgers to gain importance – not least because of their impact on the way payments are transmitted and money is managed, invested and lent.
‘There has been a growing overlap between blockchain technology and fintech solutions and we expect that to only increase over time,’ he says.
Propelled by the pandemic, fintech is now moving into the mass adoption stage.
‘Covid-19 has put the adoption of financial technology into overdrive,’ Maier says. ‘It highlighted the need for cross-generational technological savviness, because if you aren’t connected, where are you?’
But even though fintech solutions require some level of technological understanding, they’re not restricted to the most computer-literate among us.
‘Fintech isn’t just for young people. It’s also for older generations who are increasingly being forced to use and becoming adept with these new technologies. Baby boomers, for example, are the fastest growing demographic for fintech,’ Maier points out.
Fintech also plays an important role in bridging geographic divides, he explains. ‘It’s helping emerging markets, which struggle with a lack of financial infrastructure, by providing an opportunity for underserved populations to access money and interact with the developed world.’
The disruptive potential, global reach and efficiency make fintech attractive to investors. Or, as Maier puts it: ‘By not having exposure to fintech, you may be missing out on some of the most transformational developments that are currently occurring within the financial services industry.’
Fintech is for everyone
– Jon Maier
Chief Investment Officer at Global X ETFs
“By not having exposure to fintech, you may be missing out on some of the most transformational developments that are currently occurring in the financial services industry.”
Why FinTech Might Be the Future of Finance
FINTECH
Cleaner, smarter and more autonomous – is that where the mobility industry is heading? Jon Maier, Chief Investment Officer at Global X ETFs, certainly thinks so.
‘As the world becomes more environmentally aware, there will be a greater need to minimize carbon emission into the atmosphere. That is where electric vehicles [EV] come in,’ he says. ‘Every major car company has jumped on the bandwagon to create a line of electric vehicles.’
And that’s just the beginning. Maier says adoption rates in the EV space are rising and will continue to do so.
‘Many countries are recording EV sales in excess of 20% of all car sales. Norway and Iceland are already at 86% and 72% respectively.’
What’s more, several economies across the world have agreed on specific dates to outlaw combustion engines. For example, Norway and South Korea plan to ban gas cars by 2025. California and New York are also aiming to eliminate gas powered vehicles by 2035.
The EV industry may further benefit from policy support, be it in the form of incentive programs, tax credits to purchase electric vehicles or funding for necessary infrastructure including charging stations.
‘Top-down support is key to increase domestic demand, at least in the US,’ Maier says. ‘EV penetration in the US is around 5%, which is low compared to other countries. But that will drastically increase going forward.’
Buckle Up:
The EV Industry is Speeding Ahead
Mobility
Other advances might need more time. The probability of driverless cars zooming around city streets in the near future is low, Maier believes.
‘At some point we will have fully autonomous vehicles interacting with cars manned by drivers,’ he says. ‘With autonomous driving, you’re at the intersection of AI and sensor technology, and as those two technologies develop further, I think streets filled with autonomous cars is a realistic vision.’
But as Maier also points out, one can’t talk about electric cars without mentioning lithium, which powers batteries that serve as the power source for all EVs. Lithium prices have more than doubled over the past 12 months, with some even predicting a supercycle owing to supply deficits.
Electric vehicles may well turn out to be the harbingers of a revolution in the mobility sector, says Global X ETFs’ Jon Maier
Get behind the wheel
Does that means the EV revolution is at risk of losing steam? Absolutely not. In Maier's opinion, electric vehicles are the future of the auto industry – and that’s what makes the EV ecosystem so attractive from an investment perspective.
‘In certain countries, you’re going to have little choice,’ he says. ‘If you want to get around, you can buy an electric car or buy a ticket for the electric bus.’
“As the world becomes more environmentally aware, there will be a greater need to minimize carbon emission into the atmosphere. That is where electric vehicles come in.”
The information contained herein is intended for financial professional use only. Any hypothetical model portfolios discussed are provided for illustrative purposes only. This information should not be relied upon for trading purposes or as investment advice, research, or a recommendation by Global X Management LLC (‘Global X’) regarding (i) any fund, (ii) the use or suitability of the model portfolios or (iii) any security in particular. Financial professionals are responsible for making their own independent judgment as to how to use this information.
Investors should carefully consider the investment objectives, risk factors, charges, and expenses of each fund that comprises the model portfolio before investing. For information regarding the funds that comprise the model portfolios, please refer to each funds’ currently available prospectus and statement of additional information. Read the prospectus carefully before investing.
The information presented is not definitive investment advice, should not be relied on as such, and should not be viewed as a recommendation by Global X generally or for any purpose outside of Global X’s model portfolios as of the date indicated. It is presented solely to illustrate Global X’s investment process in developing the model portfolios and its analysis and views of the funds that comprise the model portfolios as of the date indicated. Recommendations are subject to change continually and without notice of any kind and may no longer be true after the date indicated.
The information presented has been developed internally and/or obtained from sources believed to be reliable; however, Global X does not guarantee the accuracy, adequacy or completeness of such information. Predictions, opinions, and other information contained in this presentation are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Any forward-looking statements speak only as of the date they are made, and Global X assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those anticipated.
Home
Foundational Technology
FinTech
Mobility
AI & Robotics
NEXT
Robotics
PREV
FINTECH
Terms
Privacy
Cookies
The information contained herein is intended for financial professional use only. Any hypothetical model portfolios discussed are provided for illustrative purposes only. This information should not be relied upon for trading purposes or as investment advice, research, or a recommendation by Global X Management LLC (‘Global X’) regarding (i) any fund, (ii) the use or suitability of the model portfolios or (iii) any security in particular. Financial professionals are responsible for making their own independent judgment as to how to use this information.
Investors should carefully consider the investment objectives, risk factors, charges, and expenses of each fund that comprises the model portfolio before investing. For information regarding the funds that comprise the model portfolios, please refer to each funds’ currently available prospectus and statement of additional information. Read the prospectus carefully before investing.
The information presented is not definitive investment advice, should not be relied on as such, and should not be viewed as a recommendation by Global X generally or for any purpose outside of Global X’s model portfolios as of the date indicated. It is presented solely to illustrate Global X’s investment process in developing the model portfolios and its analysis and views of the funds that comprise the model portfolios as of the date indicated. Recommendations are subject to change continually and without notice of any kind and may no longer be true after the date indicated.
The information presented has been developed internally and/or obtained from sources believed to be reliable; however, Global X does not guarantee the accuracy, adequacy or completeness of such information. Predictions, opinions, and other information contained in this presentation are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Any forward-looking statements speak only as of the date they are made, and Global X assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those anticipated.
NEXT
Robotics
PREV
FINTECH
Electric vehicles may well turn out to be the harbingers of a revolution in the mobility sector, says Global X ETFs’ Jon Maier
Cleaner, smarter and more autonomous – is that where the mobility industry is heading? Jon Maier, Chief Investment Officer at Global X ETFs, certainly thinks so.
‘As the world becomes more environmentally aware, there will be a greater need to minimize carbon emission into the atmosphere. That is where electric vehicles [EV] come in,’ he says. ‘Every major car company has jumped on the bandwagon to create a line of electric vehicles.’
And that’s just the beginning. Maier says adoption rates in the EV space are rising and will continue to do so.
‘Many countries are recording EV sales in excess of 20% of all car sales. Norway and Iceland are already at 86% and 72% respectively.’
What’s more, several economies across the world have agreed on specific dates to outlaw combustion engines. For example, Norway and South Korea plan to ban gas cars by 2025. California and New York are also aiming to eliminate gas powered vehicles by 2035.
The EV industry may further benefit from policy support, be it in the form of incentive programmes, tax credits to purchase electric vehicles or funding for necessary infrastructure including charging stations.
‘Top-down support is key to increase domestic demand, at least in the US,’ Maier says. ‘EV penetration in the US is around 5%, which is low compared to other countries. But that will drastically increase going forward.’
Other advances might need more time. The probability of driverless cars zooming around city streets in the near future is low, Maier believes.
‘At some point we will have fully autonomous vehicles interacting with cars manned by drivers,’ he says. ‘With autonomous driving, you’re at the intersection of AI and sensor technology, and as those two technologies develop further, I think streets filled with autonomous cars is a realistic vision.’
But as Maier also points out, one can’t talk about electric cars without mentioning lithium, which powers batteries that serve as the power source for all EVs. Lithium prices have more than doubled over the past 12 months, with some even predicting a supercycle owing to supply deficits.
Get behind the wheel
Does that means the EV revolution is at risk of losing steam? Absolutely not. In Maier's opinion, electric vehicles are the future of the auto industry – and that’s what makes the EV ecosystem so attractive from an investment perspective.
‘In certain countries, you’re going to have little choice,’ he says. ‘If you want to get around, you can buy an electric car or buy a ticket for the electric bus.’
“As the world becomes more environmentally aware, there will be a greater need to minimize carbon emission into the atmosphere. That is where electric vehicles come in.”
Buckle Up:
The EV Industry is Speeding Ahead
Mobility
– JON MAIER
CHIEF INVESTMENT OFFICER AT GLOBAL X ETFs
In New York, a speed-bakery called Panera Bread uses AI to take drive-thru orders¹. Meanwhile, in Shanghai, Swiss tech giant ABB is training robots to build other robots². And in California, marine scientists have developed a smart buoy that can warn ships of whales by listening for their sounds.
Ten years ago, AI and robotics were the realm of futurist dreamers. Now, they’re enmeshed in the fabric of our society. As labor costs soar due to staff shortages and falling productivity – according to the UK’s Office for National Statistics, nominal unit labor costs in Q4 2021 were nearly 10% up on 2019³ – the cost of these twin innovations is coming down, fast.⁴
And in a world facing mounting financial and environmental pressures, what once seemed luxury technologies are becoming commercial imperatives.
‘We’re starting to see more pressure on companies to think about how they create efficiencies,’ says Michelle Cluver, VP and Portfolio Strategist at Global X ETFs. ‘Robots and artificial intelligence are both ways where companies can really improve efficiencies, while also potentially looking at sustainability.’
‘COVID revealed that companies don’t necessarily have as good a grasp of their supply chains [as they could have]. This creates an opportunity where companies can look at reshoring to take better consideration of both economic and environmental costs, while reducing lead times and shortening supply chains.’
The Rise of Robots: How do Investors Keep Up?
robotics and ai
But investors shouldn’t jump on the AI and robotics bandwagon unless they know where it’s heading. And while the leading-edge innovations make for compelling stories, the real opportunities of the fourth industrial revolution may well be more prosaic: low-tech applications that automate repetitive tasks.
Cluver believes robots won’t phase out humans – at least not in our warehouses, factories or fast-food franchises. Instead, investors should emphasize automatons work alongside us.
‘The biggest opportunity, especially over the next decade, would be on the “cobot” side – a collaborative robot. They’re really good on tasks that are mundane and routine-oriented; they can help reduce your error rates, while also becoming more efficient.
And, because these cobots aren’t coming to take our jobs, they’re less likely to face regulatory crackdowns – one of the main risks that AI and robotics face right now.
The next wave
The information contained herein is intended for financial professional use only. Any hypothetical model portfolios discussed are provided for illustrative purposes only. This information should not be relied upon for trading purposes or as investment advice, research, or a recommendation by Global X Management LLC (‘Global X’) regarding (i) any fund, (ii) the use or suitability of the model portfolios or (iii) any security in particular. Financial professionals are responsible for making their own independent judgment as to how to use this information.
Investors should carefully consider the investment objectives, risk factors, charges, and expenses of each fund that comprises the model portfolio before investing. For information regarding the funds that comprise the model portfolios, please refer to each funds’ currently available prospectus and statement of additional information. Read the prospectus carefully before investing.
The information presented is not definitive investment advice, should not be relied on as such, and should not be viewed as a recommendation by Global X generally or for any purpose outside of Global X’s model portfolios as of the date indicated. It is presented solely to illustrate Global X’s investment process in developing the model portfolios and its analysis and views of the funds that comprise the model portfolios as of the date indicated. Recommendations are subject to change continually and without notice of any kind and may no longer be true after the date indicated.
The information presented has been developed internally and/or obtained from sources believed to be reliable; however, Global X does not guarantee the accuracy, adequacy or completeness of such information. Predictions, opinions, and other information contained in this presentation are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Any forward-looking statements speak only as of the date they are made, and Global X assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those anticipated.
But there are other risks, of course. No matter how smart they are, robots remain vulnerable to hacking – a point demonstrated by the high-profile breaches suffered by Tesla and others⁵. And there’s a wider geopolitical headwind, too.
‘In terms of the market for industrial robots, China remains the largest purchaser,’ Michelle says. ‘[But] the Chinese market has been weak the last year and a half and they’re currently facing a lot of challenges.
‘Obviously, as America re-shores, there has been increased demand from the US, but that hasn’t yet offset China.’
Nonetheless, the direction of travel is undoubtedly exciting. The development of autonomous systems that can mesh with other technologies – like the AI infrastructure being built in South Korea to enable robots and drones to work together – means the interest and use cases will only increase.
Cluver says that while AI and robotics is a ‘young theme’, it offers something completely unique.
‘It’s got a lot of Japanese names, as well as Chinese and US. And when thinking about it in a portfolio context, even a small amount of exposure can provide exposure to things you can’t get elsewhere.’
One thing is for sure: the robots are going to keep rising. And for investors who can sift through the hype, the rewards will too.
Risk factors
1. https://www.cnbc.com/2022/08/29/panera-bread-tests-artificial-intelligence-technology-in-drive-thru-lanes.html
2. https://www.chinadaily.com.cn/a/202209/02/WS63117049a310fd2b29e75a2e.html
3. https://www.ons.gov.uk/economy/economicoutputandproductivity/productivitymeasures/bulletins/
labourcostsandlabourincomeuk/2022
4. https://www.forbes.com/sites/joemckendrick/2022/09/17/economists-view-of-artificial-intelligence-beyond-cheaper-prediction-power/?sh=47aa90903f66
5. https://cset.georgetown.edu/article/hacking-poses-risks-for-artificial-intelligence/
Home
Foundational Technology
FinTech
Mobility
AI & Robotics
PREV
MOBILITY
Terms
Privacy
Cookies
The information contained herein is intended for financial professional use only. Any hypothetical model portfolios discussed are provided for illustrative purposes only. This information should not be relied upon for trading purposes or as investment advice, research, or a recommendation by Global X Management LLC (‘Global X’) regarding (i) any fund, (ii) the use or suitability of the model portfolios or (iii) any security in particular. Financial professionals are responsible for making their own independent judgment as to how to use this information.
Investors should carefully consider the investment objectives, risk factors, charges, and expenses of each fund that comprises the model portfolio before investing. For information regarding the funds that comprise the model portfolios, please refer to each funds’ currently available prospectus and statement of additional information. Read the prospectus carefully before investing.
The information presented is not definitive investment advice, should not be relied on as such, and should not be viewed as a recommendation by Global X generally or for any purpose outside of Global X’s model portfolios as of the date indicated. It is presented solely to illustrate Global X’s investment process in developing the model portfolios and its analysis and views of the funds that comprise the model portfolios as of the date indicated. Recommendations are subject to change continually and without notice of any kind and may no longer be true after the date indicated.
The information presented has been developed internally and/or obtained from sources believed to be reliable; however, Global X does not guarantee the accuracy, adequacy or completeness of such information. Predictions, opinions, and other information contained in this presentation are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Any forward-looking statements speak only as of the date they are made, and Global X assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those anticipated.
PREV
MOBILITY
In New York, a speed-bakery called Panera Bread uses AI to take drive-thru orders¹. Meanwhile, in Shanghai, Swiss tech giant ABB is training robots to build other robots². And in California, marine scientists have developed a smart buoy that can warn ships of whales by listening for their sounds.
Ten years ago, AI and robotics were the realm of futurist dreamers. Now, they’re enmeshed in the fabric of our society. As labor costs soar due to staff shortages and falling productivity – according to the UK’s Office for National Statistics, nominal unit labor costs in Q4 2021 were nearly 10% up on 2019³ – the cost of these twin innovations is coming down, fast.⁴
And in a world facing mounting financial and environmental pressures, what once seemed luxury technologies are becoming commercial imperatives.
‘We’re starting to see more pressure on companies to think about how they create efficiencies,’ says Michelle Cluver, VP and Portfolio Strategist at Global X ETFs. ‘Robots and artificial intelligence are both ways where companies can really improve efficiencies, while also potentially looking at sustainability.’
‘COVID revealed that companies don’t necessarily have as good a grasp of their supply chains [as they could have]. This creates an opportunity where companies can look at reshoring to take better consideration of both economic and environmental costs, while reducing lead times and shortening supply chains.’
But investors shouldn’t jump on the AI and robotics bandwagon unless they know where it’s heading. And while the leading-edge innovations make for compelling stories, the real opportunities of the fourth industrial revolution may well be more prosaic: low-tech applications that automate repetitive tasks.
Cluver believes robots won’t phase out humans – at least not in our warehouses, factories or fast-food franchises. Instead, investors should emphasize automatons work alongside us.
‘The biggest opportunity, especially over the next decade, would be on the “cobot” side – a collaborative robot. They’re really good on tasks that are mundane and routine-oriented; they can help reduce your error rates, while also becoming more efficient.
And, because these cobots aren’t coming to take our jobs, they’re less likely to face regulatory crackdowns – one of the main risks that AI and robotics face right now.
The next wave
But there are other risks, of course. No matter how smart they are, robots remain vulnerable to hacking – a point demonstrated by the high-profile breaches suffered by Tesla and others⁵. And there’s a wider geopolitical headwind, too.
‘In terms of the market for industrial robots, China remains the largest purchaser,’ Michelle says. ‘[But] the Chinese market has been weak the last year and a half and they’re currently facing a lot of challenges.
‘Obviously, as America re-shores, there has been increased demand from the US, but that hasn’t yet offset China.’
Nonetheless, the direction of travel is undoubtedly exciting. The development of autonomous systems that can mesh with other technologies – like the AI infrastructure being built in South Korea to enable robots and drones to work together – means the interest and use cases will only increase.
Cluver says that while AI and robotics is a ‘young theme’, it offers something completely unique.
‘It’s got a lot of Japanese names, as well as Chinese and US. And when thinking about it in a portfolio context, even a small amount of exposure can provide exposure to things you can’t get elsewhere.’
One thing is for sure: the robots are going to keep rising. And for investors who can sift through the hype, the rewards will too.
1. https://www.cnbc.com/2022/08/29/panera-bread-tests-artificial-intelligence-technology-in-drive-thru-lanes.html
2. https://www.chinadaily.com.cn/a/202209/02/
WS63117049a310fd2b29e75a2e.html
3. https://www.ons.gov.uk/economy/economicoutputand
productivity/productivitymeasures/bulletins/
labourcostsandlabourincomeuk/2022
4. https://www.forbes.com/sites/joemckendrick/2022/09/17/
economists-view-of-artificial-intelligence-beyond-cheaper-prediction-power/?sh=47aa90903f66
5. https://cset.georgetown.edu/article/hacking-poses-risks-for-artificial-intelligence/
Risk factors
The Rise
of Robots: How do Investors Keep Up?
robotics and ai
