ETF Securities says ROBO ETF surpasses $100m as investors embrace global opportunities
ETF Securities Australia today announced that ETFS ROBO Global Robotics and Automation ETF (ASX code: ROBO) has achieved inflows of $100 million since its launch in September last year.
This is the fastest growth of any ETF offered by ETF Securities since its founder and Australian philanthropist Graham Tuckwell launched the world-first GOLD product in 2003.
ROBO is the first exchange traded fund in Australia to provide investors with access to global companies focusing on robotics, automation and artificial intelligence (AI) technologies. It represents a partnership between ETF Securities Australia and US-based specialist robotics and automation index and research provider ROBO Global, tracking the ROBO Global Robotics and Automation Index.
“While Australian investors are often maligned for their failure to consider impressive opportunities in overseas markets, their response to ROBO is nothing short of outstanding and clearly shows that ETFs are becoming a core part of many portfolios,” said Kris Walesby, the Head of ETF Securities Australia.
“ROBO provides local investors with unique access to a global spread of transformational technologies and is the cheapest way of gaining access to RAAI, which has returned a hefty 18.76% in the year to May 31,” Mr Walesby said.
ETF Securities recently passed $1 billion in assets under management, with local investors able to choose from 15 traditional equity ETF products that provide exposure to ASX indices as well as thematic products such as ROBO and TECH, which has achieved returns of nearly 28% in the most recent 12 month period.
Richard Lightbound, the managing partner and chief executive for EMEA at ROBO Global who met Australian clients last week, said global investors no longer view robotics as a niche theme and now recognise the impressive growth prospects provided by companies that are at the forefront of technological advancement.
ROBO tracks the performance of 87 stocks from 12 high-growth sectors, focusing on particularly innovative small and mid-caps and avoiding more mature technology names which may lack innovation. The index captures both technology and application stocks from more than 15 countries, with North American companies accounting for some 45% of the Index as at May 31, followed by 32% in Asia and 23% in Europe.
To date, there are no local stocks in the index although Australia is one of ROBO Global’s coverage markets.
Mr Walesby said the robotics, automation and artificial intelligence industries are part of a global megatrend that is forecast to outperform the broader market in coming decades.
“Companies are increasingly investing in automation as they seek to improve productivity; reducing production costs and, in turn, increasing profitability. Already generating more than $200 billion annually, sales in the robotics and automation sectors are tipped to increase more than five-fold over the next decade,” he said.
Currently, more than two thirds of industrial robots are employed in the automotive, electronics and metal industries, but their use is likely to become more widespread as artificial intelligence systems develop further. Improvements in image and voice recognition, for example, as well as increasing usability of machine vision technology will enable robots to perform ever more complex tasks, widening their application and seeing them penetrate other industries,” Mr Walesby said.
“It is all too easy for Australian investors to miss out on some of the brightest current investment opportunities,” he said.
“Accessing pioneering companies with the greatest growth potential can be easier said than done, with small and mid-cap companies at the cutting edge of innovation in emerging industry sectors typically not well represented in traditional market cap weighted indices,” he said.
“ROBO and other thematic funds, such as TECH, allow investors to allocate capital towards sectors and companies that generate and maintain strong growth rates. Additionally, these products appeal to investors as their performance is often uncorrelated with economic cycles and other forces that drive mainstream equity and bond markets,” Mr Walesby added.