ROBO Global on investing in the fastest-growing companies

Interviews

by Jessica Amir

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ROBO Global CEO of EMEA & Asia, Richard Lightbound discusses why robotics and automation are now mainstream, their importance and the opportunities for investing into the fastest-growing companies.

Jessica Amir: Hello I’m Jessica Amir for the Finance News Network. Today we’re talking about how businesses are evolving from adopting technology, robotics and AI to get that leading edge, and how these businesses are really outperforming others. So to get the latest word on the street, I’m joined by ROBO Global CEO of EMEA and Asia, Richard Lightbound. Richard, welcome to the Network.

Richard Lightbound: Thank you very much Jessica.

Jessica Amir: First up. How are you seeing companies really get that leading edge, adopting technology and AI into their businesses?

Richard Lightbound: We’ve got a very fortunate lens, as you look at what’s happening. And really what we see is a really interesting set of technologies, but it’s highly re-deployable. So we can use this technology in terms of robots in factories, we can use it in terms of surgical robots in hospitals. We can see precision agriculture, tools on farms, this is entering our homes, it’s in our cars, it’s going to be educating our children.

So it’s really it’s everywhere and if you want a couple of quick examples, you can look at a company like intuitive surgical, they have a robotic platform that assists with surgeries. They did 800,000 surgeries last year. You can then also look at companies like John Deere Manufacturing (NYSE:DE) a very established company. They make tractors, but again they’re incorporating all of this technology into their products and really becoming a precision ag company.

Jessica Amir: With robotics and automation very quickly becoming mainstream, their investments are outperforming too?

Richard Lightbound: You’re right Jessica, this is absolutely happening now, we’re probably about 10 per cent into the journey. But as you look at this theme and you compare it to what happened with the Internet. It took the Internet 20 years to become 10 per cent of the S&P 500, which is about $US2.4 trillion of market value, it’s not going to take robotics, automation and AI 20 years to have a similar value. This is much much broader.

We can see this flowing through, if you look at the industrial sub-sector that we cover. You’ve got companies like Fanuc Corp (TYO:6954) and Yaskawa Electric Corp (TYO:6506), they’ve got very high double-digit sales growth at the moment. Fanuc just reported sales growth at 30 per cent. You can look at other areas of this opportunity, we’ve got some of our surgical robot companies that have got 20 per cent sales growth. So this is clearly happening right now.

Jessica Amir: You’ve lived across the globe really, meeting some very inspirational minds. So what would you say are the most profound things that you’ve come across?

Richard Lightbound: I think what’s really interesting about this opportunity is this set of technologies that again, we’re seeing redeployed into different areas of society. It’s not for the benefit for that upper one per cent. It’s really going to be very widely adopted and it’s going to benefit everyone. We visited a private company recently and they’re using 3D printing technology, which is a part of our index. And they’re actually 3D printing prosthetic arms for children. And these arms are great because they’re light, they’re comfortable for the children. And then they’ve gone this extra step, where they can actually be designed as a superhero arm. It’s fantastic for the kids.

Jessica Amir: A lot of investors actually don’t know how to invest in this very fast moving space. So you’ve actually built an index, it’s being tracked right all over the globe, so people can invest in it. And one Fund, it’s called Robo ticker code ROBO, generated a return of over 30 per cent last year. Tell us about that?

Richard Lightbound: You’re actually right and that Fund ETF is actually traded here in Australia. But the index that we own and manage, you’re absolutely right, we’ve done the heavy lifting for investors, we’ve identified 87 companies from around the world that are involved in this revolution. And right now, there’s close to $US4 billion that’s tracking it.

Jessica Amir: How has the index been built?

Richard Lightbound: This really combines the best of both worlds. So we’ve got a group of research sell side analysts, who work very closely with some of the world’s leading robotics experts. We’ve got about 200 years of real robotics experience in the team. And it’s that group that really go out and identify well-established companies, with technology and market leadership. We’ve put them into the index, we weight them on a modified equal weighting scheme, because we want everyone to be able to contribute to growth. But we don’t want to be over concentrated, in terms of any particular stock. And we then rebalance that index four times a year.

Jessica Amir: What else should people know about the index?

Richard Lightbound: First of all I think it’s unique exposure. So if investors look at these 87 companies, they probably won’t recognise many of them and they won’t be holding them. This is companies like Fanuc and Yaskawa in Japan, it’s Cowon Systems Inc. (KOSDAQ:056000) in South Korea, it’s Mazor Robotics in Israel (NASDAQ:MZOR), it’s Renishaw PLC (LSE:RSW) in the UK. These are names they just won’t have exposure to, as I said it’s unique. These are also well-established companies, they have a strong track record and I think the most important message here is this theme is so important. It’s happening now, you can’t afford to ignore it, you need to get exposure.

Jessica Amir: Lastly Richard, you really have your finger on the pulse of the latest technological trends. So what will the future look like in five to 10 years from now?

Richard Lightbound: This is an era of dramatic change, I mean children born today are not going to be driving cars. If we look at how healthcare gets applied today, it’s going to seem absolutely archaic, but we suddenly arrive at ANE and they don’t even know who we are. We’re going to see drones delivering packages to our doorsteps. Again, this technology is just going to move into more and more areas of our daily lives.

Jessica Amir: Richard Lightbound, thank you so much for your time.

Richard Lightbound: Thank you very much Jessica.


Ends

Jessica Amir

Finance News Network
Jessica joined FNN in January 2017 with a passion for equities and funds management. As Head of News, she has been a broadcast journalist for over seven years, specialising in finance. She has been a journalist with Sky News Business, ABC 1, ABC's The Business and ABC24. She’s also worked as a TV reporter for regional Channel 7 and 9. She also previously worked as a financial planner and real estate agent.