Investors are constantly searching for the next big thing, but in the early stages, it can be hard to identify opportunities that are ripe for long-term growth.
While themes like the metaverse and blockchain are commonly viewed as the largest present growth opportunities, industry leaders are focused on digitization for the physical world — specifically, robots.
Mark Casey, portfolio manager at Capital International Investors, said on May 17 at the Morningstar Investment Conference that he thinks that digitization continues as a top investment theme but has distinct nuances.
“I think robots will start eating the world,” Casey said. “Robots sound science fiction-y, but there’s a few I really like. Self-driving cars is a form of robot that I think will be truly transformative on a 10 year basis — even if today, in the West, you can only take a drive in one in Phoenix or San Francisco.”
Casey also named drones as delivery vehicles as an industry ripe for growth.
“I bet drones will start delivering stuff to your house at some point in the next decade,” Casey said. “That’s only really happening in Texas, Australia, and a few other places [at the moment]. And there are other forms of robots…that I think could be a big deal.”
Christopher Lin, portfolio manager at Fidelity Investments, said that he thinks of robots as more of a general term. “It’s just kind of digitization for the physical world for a mechanical kind of replacement,” Lin said at the conference.
“I do think the framing is important, whereby robot doesn’t necessarily mean the T-1000 in the Terminator movie, robot is a far more general term,” Lin said. “In fact, we actually have robots really helping us today. The Amazon warehouses and fulfillment centers have a tremendous amount of robots.”
Investors looking to add exposure to companies that apply modern technologies and business practices to the development and production of transportation may look to the SmartETFs Smart Transportation & Technology ETF (MOTO).
The objective of MOTO is to produce results for safer, cleaner, or connected transportation, transportation as a service, or overall smart transportation. Companies must have more than 50% of their assets or revenues derived from these smart transportation objectives to be eligible for inclusion in MOTO, according to ETF Database.
MOTO also invests in technology companies whose products or services are used in transportation, including those involved in software, hardware, or autonomous vehicle development, making it well positioned to benefit from the growth opportunities and developments in the industry.
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