17 februari 2018

ROBO ETP Impact Investment Rating©.

ROBO ETP gets a Hold / BUY Impact Investment Rating©.

BUY = INVEST in innovative basic needs & impact tech with disruptive change & global exponential growth goals.

HOLD = WAIT for (more) transparency on transformation ambition & progress towards more impact, ESG & SDG opportunities clearly embracing 'New Capitalism'.

ROBO ETP is 'Available, Affordable but invests in few basic needs sectors so it is less Attractive and gets HOLD.

Impact Sectors  add up to 25%. Health Robotics 8%, Food & Agriculture 6%, Energy 3% (?), 3D Printing 3%, Security & Surveillance 3%, Consumer Products 2%.
(?) Robo solar panel cleaning is a growth market.

NB Analyses of especially large caps (mixed activities) will show more health & impact activities. Eg. top holding Nvidea, (gamel)computers hardware, is active in deep learning & medical imaging analysis. More:

also gets BUY because of it's Impact Tech profile with ''disruptive innovation & inclusive growth'' potential & financial growth guestimates of Robotics & Artificial Intelligence (AI)

ROBOTICS is a thematic / macrotrend investment in a disruptive technology, not necessarily impact sectors (basic needs, underserved people) or impact (people, planet, place, process) with the exception of paradigm, disruptive change in the 5P's of impact as defined by Brian Treldstad in HBR. See visual.

The ROBO ETP portfolio is 50-50 allocated in Applications & Technology and according to Etfdbase in Artificial Intelligence, also a disruptive impact / megatrend.

Applications: Manufacturing & Ind. 16% Logistics Automation 9%, Healthcare 8% Food & Agriculture 6%, Energy 3%, 3D Printing 3%, Security & Surveillance 3%, Consumer Products 2%; Technology: Computing, Processing & AI 18%, Actuation 14%, Sensing 10% Integration 8%.

3Q2017 ROBO Global R&A Index + 49%
Total return by sub sector, year to date (%)

Actuation + 90% Industrial Manufacturing + 60%
Sensing + 57% Logistics Automation + 56%
Security & Surveillance + 54% Healthcare + 47%
Food & Agriculture + 47% Computing, Processing & AI + 45%
Integration + 33% 3D Printing + 19%
Consumer Products + 9% Energy - 26%

Listing in Amsterdam, London en op Nasdaq
Price about 13e of 41US$.
AuM: 2,2 Billion US$
ISIN: IE00BMW3QX54 & US3015057074
Dividend: –, de ETP reinvesting
Costs: 0.95%

Impressive financial performance, sustainability is average with 3 Globes.http://www.morningstar.nl/nl/ETP/snapshot/snapshot.aspx?id=0P0000Z9T7

ROBO has broad exposure with 89 holdings, equity stocks in less accessible stockmarkets & currency: Japan, Taiwan, China, Israel etc: 50%
(USA 40 and Eurozone, France & Germany 11%)

ROBO was the 1e Robotics ETP issued in 2013 by specialist ROBOGlobal.
In January it attracted 200 million US$ (+10%) reaching 2,2 billion US$ AuM. Because (rumor around the brand) or in spite of fierce competition by BOTZ newly launched in Sept 2017 and attracting 2 billion US$ in 4 months. (more below)

ROBO Asset Class Allocation according to ETFDbase* :micro caps16%, small 16%, mid 28% () & large cap 39% (). I regard this as extra attractive since I have had the QQQ Powershares ETP with 100 American Nasdaq listed largecaps Lost of Tech & Health no finance. (My return +78%). https://www.invesco.com/portal/site/us/investors/etfs/product-detail?productId=QQQ

ETFdbase offers ETP profilee with fast scan visuals, data pies and it adds asset class micro caps. Mn I like microcaps because the can be new young flexible companies, more disruptive & impact minded. Of course they can be bought by large caps or investment funds:)
Note that the ETFdbase data is a bit behind on new data from ROBO (and BOTZ) Factsheets (because of quarterly updates & changes).

7 ROBO holdings are listed in the 2017 RB50 benchmark: ABB, Fanuc, Intuitive Surgical, iRobot, NVIDIA, Omron & Yaskawa.

The impact potential of Robotics is huge
IBMs Watson is the basis of the 1e robo ETP Equbot AND delivers 90% diagnostic accuracy in lungcancer.

My interest in ROBO is sparked not only by the impact potential of Robotics & AI as such but applying it in healthcare. ROBO states 8% (pure) health sector holdings: o.a. Intuitive Surgical (ISR & Nasdaq at 400US$), Mazor Robotics (ISR) Cyberdyne (TYO), Jenoptik (Optiks & Lifescience) Germany, Advantech/healthcare MRI, X-Ray, ultrasound (Tai), Accuray (radiation robo arm (VS), Renishaw precision measurement & healthcare (6% revenue with operational loss), Tecan group automated workflow solutions for laboratories in the life sciences sector. …
NB A closer analysis of the holdings will reveal more impact (sub-sectors).

Eg in ROBO 3Q2017 report page 4 'AI is hot' NUANCE COMMUNICATIONS unveiled its Open AI Marketplace for diagnostic imaging for developers, data scientists, and radiologists. More than 20,000 radiologists already use its PowerScribe cloud-based reporting platform. http://roboglobal.com/system/pdf_attachments/documents/000/000/646/original/RoboGlobal_EarningsReport_3Q17.pdf?1512143147

ROBOGlobal: ''The 5 Ways Robotics will revolutionize health care*.
Real-time Applications: Hospital Logistics, Routine Surgeries, Rehabilitation, Elderly Care, Exoskeletons. Areas to Watch: Biotech**, Complex Surgeries, Nanobots.
**Biotech is often listed as Health Tech e.g. in iShares Exponential Technology ETP (199 holdings, 31% healthcare)

Medical Robotics Market Value: $11.4 billion by 2020, a CAGR of 22.2% (Source: MarketsandMarkets)

Medical Robotics & Computer-assisted Surgery: The Global Market
Published - May 2017| Analyst - Aneesh Kumar| Report Highlights
The global surgical robotics and computer-assisted surgery market reached nearly $3.5 billion in 2015. This market is expected to increase from $4.0 billion in 2016 to $6.8 billion in 2021 at a compound annual growth rate (CAGR) of 11.3% for 2016-2021. https://www.bccresearch.com/market-research/healthcare/medical-robotics-mrcas-market-hlc036g.html


Raven Industries VS (1,61% van de 6) presents itself as 'precision agriculture'' & 'Feeding a growing population by improving agricultural efficiency around the world' #SDG2. It has the Raven SmartYield Pro Harvest system.

Raven has a CSR webpage and an Impact Report 'Through our technology, products, and services, we help grow more food, produce more energy, protect our environment, and allow others to live safely. However, our purpose extends beyond creating these solutions — it defines our corporate behavior
.''... ''Pursuit of purpose is a key component to achieving success. At Raven, our purpose is to Solve Great Challenges. Through that purpose, we design and produce technology that positively affects people and societies from around the globe''.

No ESG KPI's only grants, volunteerism, scholarships...
Impact report 2017: https://cdn.ravenind.com/general-uploads/Raven-Impact-CSR-Report-2017-reduced.pdf

CSRHub Total 47,
Community 50, Employment 49, Environment 50, Governance 38. Below the average in electronic equipment & manufacturing.

Roboglobal mentions John Deere (Deere & Co, autonomous machinery: 0,96%) and Trimble (GPS systems and navigation technology that guide and help automated machinery such as tractors: 0.9%) as agriculture investments.
Roboglobal marketing: http://roboglobal.com/exploring-the-investable-space-of-agricultural-robotics

F&F Agriculture & Food Robots
Agricultural robots market Sep 2017, Allied Market Research, $3,840)
The global agricultural robots market is estimated to account for a market revenue of $2,927 million in 2016 and is expected to reach to $11,050 million in 2023.

Oct 2017, 203 pages, Meticulous Market Research, $4,175
Global Food Robotics Market is expected to reach $2.2 billion by 2022 supported by a CAGR of 12.5% during the forecast period of 2017 to 2022. Drivers include lack of skilled workforce, increasing food safety regulations, rising demand for advanced food packaging and growing demand to improve productivity.

I like top holding iRobot, 2% the consumer products, with home cleaning robots (dry & wet) It is global leader with an excellent distribution network, and stiff (price)competitors. Home robots support busy families, the elderly & disabled.

It won a robotics award in 2017 and it is active in core business acquisition & Venture Capital.

Impact DNA: iRobot 's Board member Mohammed Ali is also board member of Oxfam America.

In 2016 iRobot divested from Security & Defense. Robots have developed from lifesaving (mine/bomb detection, surveillance) to offensive, killer bots.

NB ROBO does not exclude Defense, in the prospectus it points out the regulatory risks for Defense contracting. ROBOs ETP competitor BOTZ (GlobalX) has Qinetiq a British manufacturer of Talon: an unmanned Robot for Security, Defense and Military. Qinetiq works for British & US government.

The Global Explosive Ordnance Disposal (EOD) Robot market is valued at $5.98 billion in 2016 and is expected to reach $8 billion by the end of 2022, growing at an annual CAGR of 4.6%. Source: http://roboglobal.com/30-new-research-reports-forecast-significant-growth-for-robotics-industry#

THEMA / MEGATREND Growth expectations
RoboGlobal Defining the Universe of Robotics & Automation for Investors (3Q2017 pdf 14 pag.) http://www.roboglobal.com/system/pdf_attachments/documents/000/000/429/original/ROBOGlobal_Q32017.pdf?1502394251

Growth Robotics 2013 – 2020 10% per annum to 80 Billion US$ & AI from 8.2 billion US$ in 2014 to 70 billion US$ in 2020. The GlobalX (BOTZ) infographic puts the financial sector, robo advisors lonely at the top with growth from 255 billion US$ AuM now, growing to 2.2 trillion US$ in 2020. https://www.globalxfunds.com/robotics-and-artificial-intelligence/

Resources Roboglobal: 30 industry reports

ROBO has a competitor since sept 2017: BOTZ (Global X issuer of 50 ETPs) with also over 2 Billion US$s AuM according to ETFdbase. BOTZ costs are a bit lower with 0,68% (ROBO 0,95%) it has only 29 large caps holdings.
Robotics is ''hot'' with investors, in January 2018 BOTZ raised 25%, 650 million US$. Note that investment funds have lost considerably to ETPs.
Personally I prefer ROBO to BOTZ because of the small sized portfolio (less diversification) with 29 large caps (more mixed activities & less impact as core activity). Etfdbase calls BOTZ an Industrial Equity versus ROBOs Technological Equity.

Intuitive Surgical (Isr) a health robotics corp and Robo RBB 50 benchmark is a top portfolio holding with 7.77%, compared to ROBO's at least 8% for health robotics.

ROBO & BOTZ share 25 holdings (of 29)
BOTZ (also) offers exposure to Japanese corporations (50%) no Chinese, Taiwanese and 1% Israel (so it buys Intuitive Surgical at Nasdaq) NB BOTZ holds 3.99% Aerospace & Defense in British Defense corp Qinetiq (USA supplier) compared to ROBOs 3% Security & Surveillance.
Again ROBO does not exclude Defense.

BOTZ performs well on information on long term market development with an excellent Infographic: https://www.globalxfunds.com/robotics-and-artificial-intelligence/
Blogger: Bit simple, no number of holdings comparison or asset class allocation.

ROBO ETP gets a Hold / BUY Impact Investment Rating©.

The ETP is 'Available, Affordable but less Attractive in impact sectors holdings: HOLD
BUY for 'disruptive innovation' & growth expectations for Robotics & AI and its allocation to Health Robotics 8%, Food & Agriculture 6%, Energy 3% (?), 3D Printing 3%, Security & Surveillance 3%, Consumer Products 2% = 25%
(?) Robo solar panel cleaning is a growth market.

I would prefer a ROBO & AI ETP with more health holdings & impact sectors. As Robotics & AI corporations have mixed business models adding corps with 50% or 33% health, agro etc is an option.

An impact (ambitions) analysis of ROBOs 89 holdings & more impact marketing can increase its impact rating. 
Robotics is seen as a technology trend that will change the nearby future and makes an attractive long term investment.
John 'PPP' Elkington describes its importance in his Breakthrough Forecast & Business Models just as Wheb Sustainable AM.

Robotics is #innovative & #efficient it wil lower resource consumption* en deliver better safer products by lowering ''human error risk''

Automobile (supply chain) is active with robotics, but that is also the largest investor in Clean Tech PLANET IMPACT. (Green Transition Scorecard).

Mn Manufacturing, Military & Defense en Transportation also Medicine & Agriculture will be disrupted according to GlobalX (BOTZ) 

 I focus on PEOPLE impact: robots doing physically hard or monotonous. Labor & refer to UN Sustainable development Goals #SDG8 innovation #SDG9 efficiency (descriptions below).
Robotics & automation will clearly cause loss of labor & employment in existing professions, but I am optimistic and a historian so I see job creation in new professions without underestimating risks, negative effects and a though transition and adaptation period.
Opportunities: economic growth, diversification and new professions such as robot designers, builders, maintenance repair & refurbishing and training (the trainers).

One of robotics leading nations is Japan that has to deal with both ageing & high labor costs megatrends at a fast pace.

Conflict Minerals, metals, are an (exclusie) issue in robotics to monitor. iRobot mentioned it in the SEC filings. 
Rare metals are a resource & costs ESG risk factor.

Health Artificial Intelligence: compliance & privacy

#SDG8: Promote inclusive and sustainable economic growth, employment and decent work for all

Roughly half the world’s population still lives on the equivalent of about US$2 a day. And in too many places, having a job doesn’t guarantee the ability to escape from poverty. This slow and uneven progress requires us to rethink and retool our economic and social policies aimed at eradicating poverty.

A continued lack of decent work opportunities, insufficient investments and under-consumption lead to an erosion of the basic social contract underlying democratic societies: that all must share in progress. The creation of quality jobs will remain a major challenge for almost all economies well beyond 2015.

Sustainable economic growth will require societies to create the conditions that allow people to have quality jobs that stimulate the economy while not harming the environment.

Job opportunities and decent working conditions are also required for the whole working age population.

Global unemployment increased from 170 million in 2007 to nearly 202 million in 2012, of which about 75 million are young women & men. Nearly 2.2 billion people live below the US$2 poverty line and that poverty eradication is only possible through stable and well-paid jobs.
470 million jobs are needed globally for new entrants to the labour market between 2016 and 2030.

Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries
  • Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors
  • Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services
  • Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation, in accordance with the 10-year framework of programmes on sustainable consumption and production, with developed countries taking the lead
  • By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value
  • By 2020, substantially reduce the proportion of youth not in employment, education or training (#NEET)
  • Take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by
  • Protect labour rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants, and those in precarious employment
  • By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products
  • Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all
  • Increase Aid for Trade support for developing countries, in particular least developed countries, including through the Enhanced Integrated Framework for Trade-Related Technical Assistance to Least Developed Countries
By 2020, develop and operationalize a global strategy for youth employment and implement the Global Jobs Pact of the International Labour Organization

#SDG9: Build resilient infrastructure, promote sustainable industrialization and foster innovation.

Investments in infrastructure – transport, irrigation, energy and information and communication technology – are crucial to achieving sustainable development and empowering communities in many countries. It has long been recognized that growth in productivity and incomes, and improvements in health and education outcomes require investment in infrastructure.

Inclusive and sustainable industrial development is the primary source of income generation, allows for rapid and sustained increases in living standards for all people, and provides the technological solutions to environmentally sound industrialization.

Technological progress is the foundation of efforts to achieve environmental objectives, such as increased resource and energy-efficiency. Without technology and innovation, industrialization will not happen, and without industrialization, development will not happen.

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