Despite the rapid acceleration in technology, mankind has consistently fallen short of anticipating the consequences brought on by the massive shifts in the way humans interact with the world. In fact, according to a PEW Research Center study, even though 33 percent of Americans believe automation will replace most of the work done by humans, 80 percent don’t believe that their jobs will be affected. Most assume that job automation will result in some form of job loss, but most are probably under the impression that many of the jobs that will be displaced are ones that “no one really wants”. More and more, former high-skill jobs have become automated. Consider the high-frequency stock trading programs on Wall Street, capable of executing millions of trades per minute. So what’s a trader to do?
Whether it’s software that helps automate factory processes, or robots that conduct surgery, the robot uprising is real, and there’s an index that tracks it. The Indxx Global Robotics & Artificial Intelligence Thematic Index, composed of companies producing the less consumer-facing technology that’s used in automation and robotics.
Traders looking to leverage exposure to this index may consider (UBOT), the Daily Robotics, Artificial Intelligence & Automation Index Bull 3X Shares ETF. Traders with a desire to bet on the movement toward automation can gain exposure to companies creating the systems, hardware and software with the greatest potential of supplanting the need for human capital. Among companies like Mitsubishi Electric and the multinational Fanuc Corporation, which are the stalwarts of automation technology, there are other companies included in the index that have certain specializations across a number of industrial and technical fields.
As a graphics processing unit (GPU) manufacturer that is already heavily involved in providing processing power for self-driving cars and deep learning AI software, NVIDIA corporation holds the largest share of the index. However, the rest of the list is populated by robotics and specialty automation companies from around the world, many of which remain unlisted in the major U.S. exchanges.
Both Yaskawa Electric Corporation and Hyundai Heavy Industries specialize in producing modular software, hardware and ambulatory robotics systems for factory or heavy industrial use. As with most modern robotics operations, these systems largely focus on increasing speed and efficiency in dangerous or repetitive fabrication and assembly tasks. Hyundai, in particular, manufactures robotic systems used to fit pipes on oil rigs and build massive freighter ships.
Related fields such as factory automation and system optimization, which aim to make the robotic factory floor as efficient as possible are also represented in the index. Keyence Corporation, another major component of the index, caters almost exclusively to the broad and seemingly endless market of defining new productivity analytics and synthesizing solutions for gauging and improving an increasingly mechanized workflow.
Index data as of 6/15/2018. Source: Bloomberg. Index weightings and allocations are subject to change.
Last but not least, one of the most dramatic areas of mechanization is in healthcare. Unexpectedly, this is represented in the index by its second-largest component, Intuitive Surgical, Inc. which builds the leading robotic surgical system and has a global install base of 4,271 units. Japanese medical device maker Omron Corporation is also represented in the new index, although their products are primarily operational and extend beyond medicine, they produce equipment and electrical systems related to everything from patient care to system automation for prisons.
The panoply of corporations involved in laying the foundation of a new, less humane future, extend beyond the Apples, Googles and Microsofts of the world. UBOT is for those who are “all in” on that future.
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