ETF Securities has partnered with ROBO-STOX to launch the first European ETF providing exposure the global robotics and automation sector. ROBO-STOX Global Robotics and Automation GO UCITS ETF has been listed on the London Stock Exchange. Europe’s first and global robotics and automation ETF will provide investors with a simple, liquid and cost effective way to gain access to this rapidly evolving new megatrend in industry sectors that are growing fast.
Howie Li, Co-Head of Canvas, ETF Securities comments: “We are delighted to partner with ROBO-STOX, the recognised leader in robotics and automation investment research, to launch this innovative ETF in an exciting growth sector that no other industry classification body has been able to separately identify to date. This investment solution will provide investors with a global portfolio of listed robotics and automation companies that capture activity from both emerging and established organisations that are highly diversified across countries, sectors and market capitalisation.”
Richard Lightbound, Partner & CEO, ROBO-STOX Partners Ltd., added: “We believe the world is in the early stages of a transformational new economic era, driven by the increasing adoption of sophisticated robotics and automation technologies across all aspects of industry and day-to-day life. ETF Securities’ unique CANVAS platform and the team’s experience in bringing innovative investment products to market will help us pioneer European investment in this fast growing sector.”
After the rise of the internet age, rapid advances in technology such as machine vision, motion sensors and image and voice recognition are enabling robots to perform increasingly sophisticated and delicate knowledge-based work. This widens their application to an incredible array of industries and applications, namely across sectors such as manufacturing, services, healthcare and exploration, in addition to the automotive industry where penetration of robotics is more advanced.
As labour costs rise and the price of automation falls, companies are approaching the tipping point for the rapid adoption of robotic technologies. Aging populations and shrinking workforces will accelerate this trend. There has been a sharp rise in robotics production and sales: In the last 10 years, the worldwide annual supply of industrial robots more than doubled from 80,000 units in 2003 to more than 170,000 in 2013.
Making Robotics and Automation Investable
For investors, the growth prospects of the robotics and automation sector are compelling. However, neither the traditional Global Industry Classification Standard (GICS) nor the Industry Classification Benchmark (ICB), each of which attempts to standardise the world’s industry classifications, recognises “robotics” and/or “automation” as an official sector classification.
By creating the ROBO-STOX Industry Classification, that gap in the market has been filled and investors and other interested parties can now better acquaint themselves with the corporate landscape of the robotics and automation industry.
To capture the full economic value of the robotics and automation industry, the ROBO-STOX Industry Classification has identified companies all along the production value chain. This ranges, for example, from companies that physically manufacture robots and automation machinery, to companies specialising in the types of software and technology that enable automation. This approach allows the ROBO-STOX Industry Classification to truly capture today’s and tomorrow’s “makers” within the robotics and automation industry.
The ROBO-STOX Global Robotics and Automation UCITS Index enables investors to track the sector in a highly diversified and dynamic way, ensuring it evolves with new growth trends as they emerge. The Index today comprises of 82 constituent companies involved in the global robotics and automation industry, spanning the world’s major regions. The Index constituents are selected from the ROBO-STOX Industry Classification by reference to a series of filters including that they must be listed on a recognised global stock exchanges and satisfy minimum criteria relating to market capitalisation and average daily value traded.
Within the Index, a two-tiered, equal weighting approach captures robotic ‘pure plays’ (so called “bellwethers”, currently 40% of the Index) and stocks with robotic segments (“non-bellwethers”, currently 60% of the Index). The constituents are reviewed and rebalanced on a quarterly basis.
The Index has appreciated more than four-fold, achieving an annualised rate of return of over 18% over the past ten years, substantially outperforming most major equity, tech and other asset class benchmarks. The diversified nature of the Index has contributed to its relatively low volatility over time, despite its high growth performance.
The ROBO-STOX Global Robotics and Automation GO UCITS ETF will be listed in three currency lines (GBP, EUR, US$) on the London Stock Exchange and registered for distribution in the United Kingdom, Ireland, France, Germany, the Netherlands, Italy, Norway, Denmark, Sweden, Finland, Spain and Luxembourg.