Bill Studebaker, CIO of ROBO Global and creator of the EXCHANGE TRADED/ROBO GLB ROBOTICS & (NYSE: ROBO), joined Benzinga’s PreMarket Prep morning show Wednesday. Studebaker discussed how 2018 was a tough year for robotics investors — and why he still believes it's a tremendous long-term investing opportunity.
Tough Year For Automation
Like the rest of the market, the ROBO ETF got off to a hot start in 2018, but is on track to finish the year on a low note, down 24.1 percent year-to-date compared to just a 10.4-percent drop by the SPDR S&P 500 ETF Trust (NYSE: SPY).
“From a performance standpoint, it would be remiss for me to say I’m not at least a little bit disappointed in the actual performance, but I think it’s important in knowing where we’ve come from and where we’re going,” Studebaker said.
“When we launched our index five years ago, we had believed in anticipation that robotics and AI were disruptive capabilities ... fast forward now five years later, and we couldn’t be more convicted in where the world is going.”
The key to long-term growth for companies and alpha for investors is innovation and disruption, Studebaker said.
“The market is not good at pricing exponential growth, and this is what we’re seeing in robotics and AI."
An example of the type of company the ROBO ETF holds is Zebra Technologies Corp. (NASDAQ: ZBRA), which specializes in automated sensor and scanning technology.
“When you look at Zebra, if you order anything from Amazon.com, Inc. (NASDAQ: AMZN) over the holidays, chances are that Zebra Technologies was involved in your order,” Studebaker told the PreMarket Prep hosts.
The ROBO ETF also holds some more unconventional automation plays, such as Deere & Company (NYSE: DE).
“Over 60 percent of their tractors have autonomous mobility capabilities,” Studebaker said.
The biggest problems in the world today represent opportunities for AI and robotics companies in the long-term, Studebaker said.
“AI technologies and applications are becoming central to every industry, and I think now is the time to focus on investing,” he said.
Studebaker compared the impact that automation and AI will have on the business world to the impact the internet has had in the last two decades.
“As we look out the next three, five, ten years, investors I think are going to look back at this opportunity and say ‘Why did I miss it?’”
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