Wednesday marked the fifth anniversary of the launch of the ROBO Global Robotics & Automation Index, the world’s first benchmark index to track global companies that focus on robotics, automation and artificial intelligence. And, its growth has been explosive.
Since its inception in 2013, the index has returned a compound annual 19%, comfortably outperforming other benchmarks. The ROBO index is now used as a performance benchmark for funds and market growth and financial institutions use it as a basis for exchange-traded funds, also known as ETFs.
The ROBO Global management team was at the New York Stock Exchange (NYSE) Wednesday for a day-long investor event to mark the five-year anniversary of the ROBO index.
“Our mission remains the same as it was five years ago — to provide investors turnkey access to the transformative power of robotics, automation and artificial intelligence,” said Travis Briggs, CEO of ROBO Global US.
A bell-ringing 'bot
Long-limbed UR5e, made by Universal Robots and sporting a two-fingered gripper from Robotiq, rang the closing bell at the NYSE to honor the five-year anniversary of ROBO Global. It became the first cobot, or collaborative robot, to ring the NYSE closing bell. A cobot can safely work alongside humans in a shared workspace.
“We have long admired Universal Robots as a pioneer and global leader in the collaborative robotics market,” said Briggs. “Since acquiring Universal Robotics in 2015, Teradyne has been a key growth driver in the ROBO Global Index. We are thrilled that Teradyne ((NYSE:TER) generously agreed to join the ROBO Global team for this one-of-a-kind NYSE bell ringing."
Investors can buy directly into the popular ROBO ETF based on the benchmark index comprised of 87 top robotics, automation and AI companies.
Five years ago, when the ROBO Global team partnered with Exchange Traded Concepts to launch the ROBO Global Robotics & Automation Index ETF (NYSEArca:ROBO), it marked the first time such an investment strategy was available.
The increased investor appetite for exposure to robotics, automation and artificial intelligence (RAAI) stocks is reflected in the size of the ETF, which crossed $2.08 billion in assets under management in September 2018.
The fund, which has delivered a 68.85% cumulative return since inception, invests in 87 top robotics, automation and AI companies across the globe.
“The reason we invest in the ETF is the high active share which utilizes in-depth research which is implemented in a particular way,” said Michael Venuto, chief investment officer at TOROSO Investments.
From inception to investment
Half the index is made up of companies that are linked to the enabling technologies of robotics and automation. Those enabling technologies include sensors, processors, machine vision, computing, AI and actuation, which is a set of components that allow robots to move.
“We want to get investors from point A to point B in a least turbulent air space as possible which is why we have the construction of the index like we do,” said ROBO Global CIO and president William Studebaker. "It gives global exposure to the value chain of RAAI companies, across 14 countries in developed and emerging markets."
To create the index, ROBO Global tapped into a panel of experts, mainly Ph.Ds, who are entrepreneurs, academics and rock stars in the RAAI universe. Today, there are 10 advisors who augment a full-time team that goes out and identifies potential stocks for the index.
Kiva Systems co-founder Raffaello D'Andrea is on the advisory board and has strong street cred — he sold Kiva to Amazon.com Inc (NASDAQ:AMZN) in 2012. Kiva's robots automate the picking and packing at Amazon warehouses. The robots — 16 inches tall and almost 320 pounds — can move at 5 mph, hauling packages that weigh up to 698 pounds.
D'Andrea’s Zurich-based indoor drone company Verity Studios might be the only robotics company that can say it has toured with Metallica, Canadian rapper Drake and performed with Cirque du Soleil. Miniature autonomous drones made by D'Andrea’s Verity Studios have created stunning lighting and stage effects for sold-out concert spectaculars.
“At Kiva, our business model called for having more than 1,000 mobile robots loose in a warehouse, running 24/7. The challenge was that in 2003, when we started Kiva, we had to figure out how to make a large multi-robot system super-reliable using inexpensive components,” D'Andrea said at the ROBO Global anniversary event.
“We had to overcome a similar challenge at Verity Studios. Our flying machines have logged more than 30,000 flights, most of them above people. Ensuring that our autonomous drones perform reliably night after night was a key priority for us, as was safety. As a result, we have developed some extremely powerful, and cost-effective, failsafe technology,” said D'Andrea.
Jeremie Capron, director of research at ROBO Global, moderated a panel discussion on emerging trends in robotics and asked what the future holds for robotics given the rapid pace of change in the field as well as in associated areas such as machine learning and artificial intelligence.
“One way to accelerate robot development is to create robots that can build themselves — and reconfigure themselves into whatever shape is best for performing the task at hand,” said well-known roboticist Daniela Rus, the director of MIT’s groundbreaking Computer Science and Artificial Intelligence Lab (CSAIL).
Rus said that robot cells created at MIT can assemble themselves into different shapes. With no human controlling them, these dice-sized blocks can climb atop one another, assembling themselves into various patterns. Rus predicted that we will soon be able to create smaller, more sophisticated cells that can assemble themselves into a snakelike robot that can slither through small places, then reassemble itself into a slinky that can climb stairs.
She also talked about how we would be able to use robots to perform surgery with no incision, no risk of infection, and no pain with the help of an ingestible origami robot. She demonstrated the concept for the audience with a video of simple stomach surgery performed by a tiny robot inside an artificial stomach.
ROBO Global recently expanded its advisory board to include Rus as one of its advisers.
“We are surrounded by opportunity and those opportunities are only going to get greater as we utilize robotics and AI,” said Rus.
Contact Uttara Choudhury at [email protected]
-- Updates with panel discussion details and quotes --