INVEST IN THE FUTURE

THEY won’t be taking over the world with Terminators, but robots are seizing a growing slice of investment portfolios.

Injecting some of your money into robotics is increasingly being seen as a strategy to avoid missing out on the next big boom, and investors’ money is flowing into the sector.

Investment specialists say buying individual robotics shares is tricky because almost all are based overseas, the sector is changing rapidly, and volatility is high.

Australia’s best-known stock in the sector, Fastbrick Robotics, was trading at 8c a share a year ago, surged to 28c by August and was back at 17c last week. The company has created a world first “digital construction system” – in other words, robot bricklayers.

AMP Capital head of investment strategy Shane Oliver said the penetration of robotics was still relatively low in most industries.

He said the easiest way to invest in robotics was through exchange-traded funds such as ROBO Global, which gave investors a broad exposure “rather than worrying about individual stocks”.

“A lesson from the tech boom and bust was that picking stocks can be difficult,” Dr Oliver said.

A recent analysis by NAB found self-managed super funds were becoming more confident about investing overseas and were “prepared to take bets on new and innovative sectors such as robotics and aerospace using ETFs.”

Head of ETF Securities Kris Walesby said his company’s ROBO Global Robotics and Automation ETF launched in September with $1 million and now had $70 million.

“Investors genuinely believe that robotics and AI is the beginning of the next revolution, similar to the agricultural and industrial revolutions,” he said.

“Robotics and AI are changing how we exist. The future is very positive for these cutting-edge technologies, but with anything like that there will be ups and downs.

“We believe most people should invest through a fund rather than picking single stocks, because the technologies are so new and not particularly well understood by anyone other than experts.”

Mr Walesby said the global robotics industry’s total market capitalisation today was $60 billion and was expected to grow to $1.2 trillion by 2025.

AMP’s Dr Oliver said despite its strong growth potential, robotics was not a free lunch for investors.

“We saw with the technology boom and bust the potential was there – people have made lots of money from technology, but the market can get ahead of itself.”

“Getting in early makes some sense because you get long-term upside potential.”