November 14, 2016
Investment themes such as robotics can help “future-proof” a portfolio.
The field of robotic machinery is advancing rapidly. The sophistication of sensors — which give robots the ability to see, hear and touch — as well as the software that powers them, has grown exponentially during recent years. As a result, highly autonomous systems from hundreds of companies around the globe are appearing to address a broad range of needs — ranging from Google’s Self-Driving Car Project, to home and farm robots in Japan, to entire European manufacturing lines that switch to a new product almost on a dime.
Investing in such a rapidly changing and turbulent investment stream can be a complex matter. “Trying to pick the one company that will benefit the most from an investment theme such as robotics is extremely challenging,” says Tom Hainlin, National Investment Strategist for Ascent Private Capital Management of U.S. Bank.
Indeed, in 2013, Google acquired eight different robotics companies in a span of just six months.1 Three years later, the company is already selling one of them: Boston Dynamics,2 maker of the rough-terrain robot “BigDog” — and arguably one of the industry’s highest-profile players.
Hainlin suggests a different approach, if appropriate for your risk tolerance and investment objectives. Identify key industries that are expected to benefit from the “rise of the robots” and then assemble a “basket” of publicly traded companies that have a high exposure to a robotics theme.