Christmas has come early for the bank’s shareholders with the decision to slightly increase the 2024 dividend – despite a single-digit decline in the net profit and cash earnings.
Beating the market benchmark is never easy, with 72 per cent of Australian actively managed global equity general funds trailing the S&P World Index in the six months to June 30, 2024. Domestic equity funds performed slightly better, albeit against a significantly lower bar set by the S&P/ASX 200 Index.
‘We’re just getting started’ in robotics and artificial intelligence
ETF Securities, one of Australia’s leading exchange-traded fund (ETF) issuers, says “we’re just getting started” when it comes to the robotics, automation and artificial intelligence boom. In its view, the sector is still in its infancy and this revolution will touch almost every corner of the world.
Director of research at index developer and research company ROBO Global, Jeremie Capron, says “the investment case for robotics, automation and artificial intelligence is much more diverse than most investors realise and is still in the early stages of what will prove to be a long-term trend”.
According to McKinsey & Company ‘the new wave of automation will be driven by the same things that first brought robotics and automation into the workplace: to free human workers from dirty, dull, or dangerous jobs; to improve quality by eliminating errors and reducing variability, and to cut manufacturing costs by replacing increasingly expensive people with ever-cheaper machines.’
With the next wave of automation, advanced technology will be capable of performing human-based tasks that have not been suitable for automation up until now. Technology has advanced so much so that entirely new sources of value have been created. The robots help with housekeepers, telling them which room to clean and tracking how quickly they do it. They drive trucks and earth-moving equipment in the mines without human intervention and detect inefficiencies that a human manager never could.
Automation has advanced to the point where it has the potential to transform sectors such as healthcare and finance, which involve substantial knowledge and skills. Speaking at a recent ETF Securities webinar, Capron said ‘Robotics is not a niche. It is a set of general-purpose technologies that can be applied to every market, every industry, very much like the internet over the past 20 years. We think we are in the early stages of a technology shift that offers tremendous investment opportunities.’
The fast-evolving and increasingly complex nature of the sector makes it hard not only to choose the right companies that benefit from this advanced technology, but to stay on top of developments as they occur. Capron notes the following recent events in this regard:
- Advances in sensing combined with precision technology has opened up the field of robotic surgery.
- In the near future, AI will be deployed to enhance diagnostics and analyse patient data and clinical trial data.
- The technology infrastructure system, 5G wireless, is leading to a number of “smart city” developments, such as cloud-based traffic control.
- In agriculture and food production, facial recognition systems are being tailored to analyse plants for their level of hydration and their need for fertiliser and pesticides.
- More advanced cleaning robots are playing an important role in supporting the aged.
- In the energy industry, robots have been developed to inspect and maintain power lines.
Australian investors can gain exposure to the sector through ETF Securities’ ETFS ROBO Global Robotics and Automation ETF (ASX: ROBO), which tracks the performance of one of ROBO Global’s indices, the Global Robotics and Automation Index. Since inception in September 2017, the fund has produced an average annual return of 17.2%.
As robots become cheaper to operate and increasingly versatile, their adoption increases exponentially across a much broader range of tasks. According to McKinsey and Company, over the next five to ten years, we can “expect a more fundamental change in the kinds of tasks for which robots become both technically and economically viable.” Advances in computing power as well as software enhancements and networking technologies have made it possible to link robots to wider production systems.
