After slumping the ROBO Global Robotics & Automation Index ETF (NYSEArca: ROBO), the original robotics ETF, is getting its grove back and is higher by 20% this year. Short-term gains are nice, but many of the catalysts that could drive the robotics sector and ETFs like ROBO higher are long-term drivers.
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.
One of those drivers is artificial intelligence, also known as AI. AI, in particular, is gaining widespread attention for its ability to disrupt a variety of sectors. In the financial space, AI can be used to perform risk-reward analysis, fraud detection and advisory services, but how does the technology specifically serve ETFs?
Data suggest the global AI opportunity is massive.
“By one estimate, AI contributed a whopping $2 trillion to global GDP last year. By 2030, it could be as much as $15.7 trillion, ‘making it the biggest commercial opportunity in today’s fast changing economy,’ according to a recent report by PwC, reports ETF Daily News.
So Many Applications
AI’s impact is expected to be felt across scores of industries and everyday fields, including healthcare, technology and many more.
“First, it will deliver new goods and services, such as improved medical care – a focus of AI work at Google and IBM,” said ROBO Global in a recent note. “Second, it will make workers more productive, as new tools have always done, and thus lead to higher real incomes. And third, it will make work more engaging for most workers, as Amazon CEO Jeff Bezos predicted at the Bush Center’s Forum on Leadership in April.”
Financial services is another industry that will be transformed by AI. With the availability of AI and its capabilities now being filtered down to the masses, investors can use these tools to incorporate in their own research in order to filter out opportunities. Likewise, portfolio managers and advisors now have access to AI technology that can be built into the financial products, so that investment decisions are made easier by parsing out key points from complex data.
Companies are scrambling to capture AI-related intellectual property.
“AI patents have surged in the past five years alone, according to the World Intellectual Property Organization (WIPO). From 2013 to the end of 2017, the number of patents grew nearly three times, from 19,000 to more than 55,600,” according to ETF Daily News.
For more on innovative ETFs, please visit our Robotics & AI Channel.