Artificial intelligence (AI) is one of the prime technologies leading the wave of disruption that is going on within the health care sector. Recent studies have shown that AI technology can outperform doctors when it comes to cancer screenings and disease diagnoses.
In particular, this could mean specialists such as radiologists and pathologists could be replaced by AI technology. Per an article by the Association of American Medical Colleges, “a New England Journal of Medicine article predicted that ‘machine learning will displace much of the work of radiologists and anatomical pathologists,’ adding that ‘it will soon exceed human accuracy.’ That same year, Geoffrey Hinton, PhD, a professor emeritus at the University of Toronto who also designs machine learning algorithms for Google (and who received the Association for Computing Machinery’s A.M. Turing Award, often called the Nobel Prize of computing, in 2019), declared, ‘We should stop training radiologists now.'”
Investment Opportunities in AI
AI is gaining widespread attention for its ability to be a disruptive technology that spans across a variety of sectors. In the financial space, AI can be used to perform risk-reward analysis, fraud detection and advisory services, but is it a smart idea to invest in AI-focused exchange-traded funds (ETFs)?
Whether society is ready for it or not, robotics, artificial intelligence (AI), machine learning, or any other type of disruptive technology will be the next wave of innovation. For investors who missed out on the bull market run of FAANG (Facebook, Amazon, Apple, Netflix, Google) stocks, they can look to capitalize on disruptive tech options in 2019 and beyond that.
Disruptive technology is not relegated to certain sectors as it will permeate into all industries in some form or fashion. For example, augmented reality is technology comprised of digital images superimposed over the real world, and its use is primed to drive industry growth–industries like real estate and manufacturing are already putting the technology to use in a variety of ways.
According to the Harvard Business Review, global firm Deloitte identified seven disruptive forces that leaders should understand and incorporate into their strategy for future growth:
- Internet of things (IoT): disrupting the labor market and forcing employees to be “tech fluent.”
- Continued growth of big data via analytics in organizations
- “Cyber-physical world” that focuses on efficiency and the automation of manual tasks
- Automation and higher-level value creation
- The concept of “career” is changing via technology, resulting in a 60-70-year work life with continuous learning and career shifts.
- An explosion in contingent work with a distributed talent pool that improves productivity and speed
- Diversity and generational change for the workforce
One ETF to consider is the ARK Innovation ETF (NYSEArca: ARKK). ARKK is an actively-managed fund that invests in domestic and foreign equity securities of companies that are relevant to the fund’s investment theme of disruptive innovation.
Another fund to consider is the Robo Global Healthcare Technology and Innovation ETF (HTEC). HTEC seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the ROBO Global Healthcare Technology and Innovation Index.
The fund will normally invest at least 80 percent of its total assets in securities of the index or in depositary receipts representing securities of the index. The index is designed to measure the performance of companies that have a portion of their business and revenue derived from the field of healthcare technology, and the potential to grow within this space through innovation and market adoption of such companies, products and services.
For more market trends, visit ETF Trends.