Stick to the smaller companies for your clients’ tech investments, advised Lauren Hein, head of advisor relations at ROBO Global, a robotics, AI and automation ETF provider.
Amid the recent selloff of stockss, Hein said ROBO Global is not advising investors to get out of tech. Quite the opposite, she said in an interview. Advisors and their clients should be thinking of jumping into tech investments, if they are not already there, because tech has a huge future, she said.
ROBO Global is an index, advisory and research company focused on helping investors capture opportunities in robotics, artificial intelligence and healthcare technology companies around the world, according to the firm’s website. The ROBO Global Robotics and Automation Index ETF (ROBO) was launched in 2013. Since then, ROBO Global has added two more ETFs tracking the ROBO Global Artificial Intelligence Index (THNQ) and the ROBO Global Healthcare Technology & Innovation Index (HTEC).
Hein said advisors should be looking at some of the less obvious tech companies for their clients.
For example, there are several industrial-focused companies that are advancing technology, but are much lesser known, such as Teradyne—a manufacturer of "cobots," which are robots that can work alongside humans in manufacturing facilities. Another example is Japan-based Fanuc, a company that builds robots for Tesla. The company also offers backdoor exposure to Tesla, Hein added.
“We are super excited about these companies that might look like industrials. They provide a lot of opportunities for investors,” she said. For instance, robots are already in use that can bus tables at restaurants.
Another example is Cognex, a manufacturing company that uses machines for quality control. The machines can do internal quality control of machines and products, which humans cannot do.
For investors, 85% to 90% will stick with the robotics and automation investments that are part of established indexes, the other 10% will roam even further afield to find the rare, but promising, investment, Hein said. “In the last year, we have had more conversations with people looking outside the big tech firms for their investments” to companies like those included in the firm’s ETFs, she said.
The ROBO Global ETFs are evenly divided between domestic and international stocks.
“Tech should be a staple in investors’ portfolios,” said Hein.
Robotics, automation and AI are some of the most compelling investment opportunities of the 21st century, she said. “Daily media coverage of intriguing and widely adopted advancements in robotics attracts widespread interest in how these technologies are impacting our daily lives. Yet few investors are aware of the vast scope of these sectors and how their growth is accelerating across the supply chain,” ROBO Global said. “This multidecade technological transition is creating a unique opportunity for today’s forward-thinking investor looking to capture the tremendous growth to come for robotics companies globally”