Robotic Investment Fund UK
Understanding the long waves of innovation
In the sixth wave of human productivity, it’s important to understand the long wave of innovation to predict the future.
Technology advancements, leading to increased efficiency and productivity in various industries. Robots and automated systems will become more intelligent, flexible, and adaptable, enabling them to perform more complex tasks with increased accuracy and speed.
This can help reduce labour costs and increase the accuracy of production processes, leading to higher profits. It can also reduce the amount of time needed to complete certain tasks, freeing up more time for people to focus on higher-level tasks. As a result, automated systems could revolutionise the way we work, creating a more efficient and productive workforce.
Technology is constantly changing industries and reshaping our lives and automation and robotics are at the forefront of this transformation. In Britain, the first factory emerged during the first wave of the industrial revolution. In the second wave of railway development, railway networks proliferated and greatly influenced cities and trade. A third wave of car manufacturing began in the early 1900s when Henry Ford introduced the assembly line, which revolutionized car manufacturing. As a result of this fourth wave of development, the aviation industry gained mass adoption on a global scale. This provided a lever for economic integration on a global scale.
Source: Visual Capitalist
The fifth wave was the Internet age which disrupted everything from media to retail. In 1990, 2.3 million people used the Internet. However, by 2023 the figure reached 5.6 billion which is 64% of the world population.
We are now in the sixth wave where climate challenges intensify. Clean tech and artificial intelligence are expected to solve climate challenges, increase human productivity and make humans superhuman.
The sixth wave is focused on leveraging the advances made in the fifth wave to help tackle the climate challenges. This wave is expected to bring about a revolution in technology that will help increase both efficiency and sustainability in many aspects of life. It is anticipated that the use of technology will help to reduce carbon emissions, increase energy efficiency, and create a more sustainable future.
Why robotics and automation funds are worth considering
Technological innovations boosted economic growth and improved living standards. However, disruption also provides a competitive advantage as companies benefit from first mover advantage as Harvard Business described its firm’s ability to be better off than its competitors as a result of being first to market in a new product category.
The big tech companies such as Google in the search business and Amazon in e-commerce have greatly benefited from the first mover advantage. For instance, Google’s first mover advantage in the search engine space has enabled them to establish a large user base and a dominant market share, allowing them to easily expand into other businesses such as digital advertising and cloud computing.
The key to dealing with the future lies in knowing where you are, even if you can’t know precisely where you’re going. As Mark Twain once said history doesn’t repeat itself but it often rhymes. Knowing the present is the first step to understanding the future and making sound investment decisions. By understanding the current trends and the historical context, investors can make informed predictions about the future and make wise decisions on how to invest.
One of the main advantages of investing in automation and robotics is to generate capital growth in the long run. As technology continues to advance and automation will become more integrated into several industries as a result the demand for their products or services will increase. In the next few years, we expect to see more adoption of automation across wide industries such as manufacturing, healthcare, logistics and agriculture. Automation is expected to take a huge market share and disrupt the traditional way of conducting business.
As legendary investor Ray Dalio once stated, diversification is the holy grail of investing. If you diversify your investment among 10-15 uncorrelated asset classes you can reduce your risk by up to 80% without reducing your return. Therefore, risk reduction is the key to long-term investing because if you invest in one of the best ideas, if you are wrong it often knocks you out of the game. The ability to make it through downturns is critical when risking your capital to survive an unfavourable period and still be around when the winner shows up. Spread the risk among multiple asset classes and you will be able to weather any downturns in the market. This will ensure that you stay in the game and can maximise your returns over the long term.
Steve Maraboli, an American author, once said “The future is greatly different to your life now, the actions that you take must also be greatly different. You cannot do the same thing and expect something different.” By investing in the YFS Intelligent Wealth Fund, you gain access to the potential of the future and the ability to diversify your investments across seven sectors, including cutting-edge technologies, automation and robotics, and companies with different market capitalisations and geographical exposure.
Awet Ghirmay, Head of Investment Research
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More information about the fund can be found here: Hargreaves Lansdown or AJ Bell
Risk warnings
*The value of investments and the income derived from them may fall as well as rise. You may not get back what you invest. This communication is for general information only and is not intended to be individual advice. You are recommended to seek competent professional advice before taking any action. All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs practice. Levels and bases of tax relief are subject to change. This blog is based on my own observations and opinions.
