Those interested in the march of artificial intelligence into all aspects of our lives – for better or for worse – would devour Jo Callaghan’s novel on the subject: In The Blink Of An Eye.
It tells the tale of how Detective Chief Superintendent Kat Frank combines with Artificially Intelligent Detecting Entity Lock to solve the mysterious disappearance of several young men in Warwickshire.
Yet for those more interested in making money from artificial intelligence, there is a possible answer in the shape of investment fund Pictet Robotics.
Although robotics has played a key role in industry since the 1960s, the fifth-generation robots of today come armed with AI and are poised to revolutionise the workplace. Pictet’s fund is perfectly positioned to pick the winners from this 21st Century industrial revolution.
Pictet Asset Management, headquartered in Switzerland, has £54billion of theme-based funds under management: everything from funds specifically investing in premium brands, health and nutrition.
Bionic performance: Over the past five years, the Robotics Fund is up 143% and has returned 43% in one year
The Robotics Fund, launched eight years ago, has been a big success, attracting assets of £7billion from a global marketplace.
The performance numbers are impressive. Over the past five years, the fund has registered returns of 143 per cent. Over the past 12 months, it has generated profits of 42 per cent.
‘It’s an exciting but simple investment story,’ says Daegal Tsang who runs the fund along with Peter Lingen who has had a hand on the tiller since its early days. ‘Robots are increasingly performing the D-tasks, previously done by humans – dull, dirty, dangerous or difficult tasks. Those companies involved in this robotic revolution should benefit hugely.’
Three sub-themes underpin the fund – automation, enabling technologies and consumer and services applications. Lingen and Tsang then identify companies that are making waves – or are about to make waves – in these key areas.
So, for example, companies involved in automating factories through the production of industrial robotics (automation); businesses key to building robots that are AI fit for purpose (enabling technologies); and companies involved in bringing AI into the realms of health and the family home (consumer and services applications).
Tsang says the investment universe comprises about 250 stocks, from which 120 make it on to a ‘core’ list and 32 into the fund. They do not invest in companies that are the beneficiaries of using robotics in their business operations.
Nearly two thirds of the portfolio is made up of US companies – such as Alphabet (which has a thriving AI division called Google DeepMind) and software giant Salesforce. But robotics is most prevalent in Asia.
Tsang says the global average for the number of robots per 10,000 workers is 151, but 1,000 in South Korea. Key Asian company holdings include Japanese automation specialist Fanuc and robotics company Yaskawa. ‘Robotics is an investment theme that is not going away,’ says Tsang. ‘It’s driven by improving productivity across swathes of industry.’
From an investment point of view, the growth-focused companies that the fund invests in have share prices sensitive to short-term changes in the economic backdrop. But Tsang insists they are ‘great opportunities’ for long-term investors.
It is an opinion shared by Christopher Rossbach, managing partner of investment house J Stern & Co. He believes AI will have a farreaching impact across the global economy for years to come. ‘The companies that incorporate AI will succeed and those that ignore it will do so at their peril,’ he warns. Annual charges on the Pictet Robotics fund are 1.09 per cent.
