What do you see, Miroki?’ asks Jerome Monceaux, co-founder of humanoid robot maker Enchanted Tools. Miroki and Jerome are facing me in a room at the Royal Institution in London’s Mayfair, headquarters of a charity dedicated to connecting people with science – and I’ve come to say hello to Miroki and his inventor.
‘I see a person in a light grey jacket,’ responds Miroki, a 4ft robot with bulging eyes that stare into my soul and remind me of Tweety Bird in Looney Tunes. ‘They are writing in a notebook.’
I’m impressed – I am indeed scribbling away – although my jacket is more dark blue than grey.
‘Spin,’ asks Jerome, and Miroki gleefully spins round three times on his omnidirectional wheels. I’m emboldened. I ask Miroki to fist pump me and he does so with his left hand, comprising three chunky fingers and a thumb. I want to hug him, but I resist.
Miroki is multilingual and, if you ask him politely, he will speak with an ‘antiquated English’ accent. But he’s more about the future than the past, because Jerome hopes to launch Miroki – and sister Miroka – on the world at the end of next year. His target? Some 10,000 sales in 2027 with a price tag per Miroki/Miroka of around €30,000 (£25,590, give or take a pound or two).
Jerome, co-creator of earlier (and cruder) humanoid robots Nao and Pepper, is confident that the robots will be a big success for Enchanted Tools.
Helping hand: Jeff Prestridge fist bumps AI robot Mirokai, which could eventually be used in healthcare
‘They can interact, answer questions and take instructions,’ he says. ‘They can move around, pick up a basket, a glass of wine or a plate.’ He believes they will be used across healthcare – in hospitals, for example – and as home help.
The Mirokais are not the only humanoid robots on the march: rivals include China’s Tiangong, which can run at a steady six kilometres per hour (3.5mph), and Tesla’s Optimus.
More broadly, robotics, automation and artificial intelligence (AI) are increasingly impacting on the workplace and our daily lives.
Last weekend saw the launch of Tesla’s robotaxis – driverless ride-hailing cars – in Austin, Texas, with one analyst describing this chapter as ‘one of the most important for founder Elon Musk and Tesla in its history as a company’.
The launch, confirming Tesla’s potential in robotics and autonomous vehicles, caused its share price to move upwards.
Yet there are other companies ahead of the curve, including Waymo (part of US tech giant Alphabet); China’s Baidu and its Apollo Go cabs; and UK private company Wayve, a leader in autonomous driving technology. But automation and robotics are not confined to cars. A few days ago, restaurant chain German Doner Kebab confirmed it was rolling out ‘smart’ kitchens, including robotic meat shavers, to boost productivity and counter the National Insurance tax raid on UK businesses which began in April.
Robots, robotics, AI, automation everywhere. Earlier this year, Swiss investment house Pictet Asset Management identified ‘advancements in robotics and automation’ as one of seven ‘megatrends’ shaping the world.
These, it predicted, would act as catalysts for long-term economic growth and give rise to new business opportunities – and, by implication, new investment opportunities.
Daegal Tsang is a senior investment manager at Pictet and part of the team which oversees £6 billion fund Pictet Robotics. It invests in businesses involved in robotics: be it in the production of sensors, voice recognition, data processing or other components.
He says: ‘When we launched the fund nearly ten years ago, robotics was something confined to most people’s imaginations. Today it is used in everything from agriculture to medical procedures and search and rescue. Consumer robots, so called cobots [the Mirokais of this world], are also being developed to help with domestic chores and assist in the provision of home care.’
Tsang adds: ‘I grew up in the era of Star Wars and robots R2-D2 and C-3PO, so I would love cobots to be part of home life in the next two years. That won’t happen, but maybe in the next ten to 15 years.’
Jason Hollands, a director of fund platform Bestinvest, believes the inter-related themes of automation, advancements in robotics, and AI ‘are about as exciting as it gets, but also quite scary’.
Scary because vast numbers of jobs are being made redundant by such technologies – from computer programmers through to accountants and those in the legal profession.
Exciting because of the jobs they will create and the transformative impact they will have on the lives of many people (a report from Lloyds Bank entitled ‘the future of free time’ suggests AI and automation could help us reclaim up to 110 minutes of free time every day).
These themes, says Hollands, provide exciting opportunities for investors – along with the risk of bubbles, as shares in new-wave companies are driven skywards by over-exuberant investors.
Last week, Wealth asked a panel of experts to identify the best way for investors to benefit from the robotics and automation ‘mega- trend’ that Pictet claims will change the world.
TAKE A LOOK AT YOUR INVESTMENT PORTFOLIO
You might not know it, but your Isa or self-invested personal pension may already have exposure to the investment themes of AI, robotics and automation.
Dzmitry Lipski, head of funds research at investing platform Interactive Investor, says most global equity funds have a lot of exposure to companies operating in these areas – especially the so-called magnificent seven US tech stocks. These are Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. For example, Tesla has its robots and driverless taxis, while Alphabet is involved in AI systems through its subsidiary Google DeepMind, as is Meta.
Microsoft customers can use its AI companion Copilot, while Amazon employs hundreds of thousands of robots across its business. Investment trust Scottish Mortgage, a constituent of the FTSE 100 Index, has just short of 10 per cent of its £14 billion of assets invested in Amazon and Meta.
F&C, also part of the FTSE 100, has nearly 12 per cent of its £6 billion of assets held in magnificent seven stocks. Only Tesla is absent from the trust’s top 20 stocks.
Many investors, says Lipski, will be comfortable with such exposure to AI, robotics and automation. Others may want to add to it.
BUY A ROBOTICS AND AUTOMATION FUND
For investors who would like more focused exposure to robotics, automation and AI, several funds invest exclusively in this investment theme.
They fall into two groups: those actively managed and funds which track a specific related index.
Pictet Robotics and Robocap sit in the first camp. Pictet’s Tsang says its Robotics fund holds 35 stocks, most of which are listed
in the US. Only two of the magnificent seven, Nvidia and Alphabet, make it into the portfolio on ‘purity grounds’. Tsang says: ‘We only want to invest in companies which are generating a big chunk of their revenues from making robots, the associated software and hardware and the supporting AI.’
The fund’s performance numbers are good. Over the past one and five years, it has registered returns of 2.2 and 79.1 per cent, respectively. Ongoing charges are a tad over one per cent.
Robocap, launched nine-and-a-half years ago, is the creation of London-based Jonathan Cohen. He is passionate about robotics and, when he is not running the fund, meeting investible companies and marketing the fund to potential investors (I met Miroki at an investor event he had organised), he builds drones.
Cohen is ruthless about the companies he invests in. They must be listed businesses and at least 40 per cent of sales must be theme-related. He says 250 companies are on his radar, but only 30 make it into the fund. ‘We buy the companies that provide robotic solutions rather than the businesses which benefit from them.
‘So, we would rather buy shares in Symbotic, an American warehouse automation company, than stock in Walmart which is using Symbotic to automate processes across its retail business.’
The fund’s biggest holding is AI giant Nvidia. Other key holdings include electronic design automation company Synopsys and Procept BioRobotics, which specialises in robotic surgery. Available via the AJ Bell investing platform, the fund’s annual charges total 1.44 per cent. Returns over the past one and five years are 4.4 and 46.7 per cent, respectively.
There is also a raft of exchange-traded funds which track the performance of a basket of companies involved in robotics, automation and AI. They include iShares Automation & Robotics, which tracks the performance of the Stoxx Global Automation and Robotics Index – and L&G Robo Global Robotics and Automation, which tracks the Robo Global Robotics and Automation Index.
Respective annual charges are 0.4 and 0.8 per cent – and can be bought via investing platform Hargreaves Lansdown.
AJ Bell’s Dan Coatsworth says such funds are a ‘neat way to cast your net far and wide’.
Food for thought: Robotics, automation and artificial intelligence are increasingly impacting on the workplace and our daily lives
ADD EXPOSURE THROUGH GENERAL TECH FUND
An alternative approach is to invest in a tech fund that blends exposure to robotics, automation and AI with other exciting areas.
Coatsworth singles out Polar Capital Global Technology as a fund that ‘contains a mix of companies which are enabling the AI revolution while using the tech to improve their own business models’. He says that Meta, the fund’s second-biggest holding behind Nvidia, uses AI to direct relevant content to its social media users. Over the past one and five years, the fund has registered returns of 10.3 and 79.8 per cent. Annual charges total 1.11 per cent.
Bestinvest’s Hollands singles out investment trust Allianz Technology. He says: ‘Its shares stand at a near 10 per cent discount to the trust’s assets – an attractive entry point for investors.’
One and five-year returns are 7 and 86.9 per cent respectively. Annual charges total 0.8 per cent.
Joseph Hill, senior investment analyst at Hargreaves Lansdown, opts for Baillie Gifford American, a £2.6 billion fund with around 37 per cent exposure to tech stocks. One and five-year returns are 19.7 and 19.3 per cent, and annual charges total 0.52 per cent.
AND FINALLY, A GENTLE WARNING
Although the world of robotics, automation and AI is exciting, it’s not without risk for investors.
Sam North, a market analyst at trading platform eToro, says: ‘The global robotics market was valued at $80 billion in 2022 and is projected to reach $280 billion by 2032. Yet, as with any high-growth sector, company valuations can become elevated, leading to significant price corrections.
‘Invest? Yes, but with a long-term perspective, and diversify your portfolio to mitigate any volatility.’ It’s probably the answer Miroki would give.