Thematic Investing in AI, Blockchain, Robotics, and More
Our Technology Enablers portfolio allows you to invest in the “invisible” technologies that can change the world.
How can entire workforces work from home during the COVID-19 pandemic? How is it possible to transact securely with cryptocurrencies and receive personalised feeds on your social media?
Some of the conveniences we take for granted today are only possible with technological developments that often go unnoticed by consumers, such as artificial intelligence (AI), blockchain, cloud computing, robotics, and semiconductors. These technologies are fast becoming crucial in enabling new ones to emerge and transform the world.
How can investors get exposure to these technologies’ growth potential? Investing in single company stocks is one way - but this approach can be expensive and time consuming. Without dedicated portfolio management, short-term volatility across even just a few stocks could expose your portfolio to more risk than you’re prepared for.
Another way to invest in these technologies is through our Thematic Portfolios: Our Technology Enablers portfolio gives investors diverse exposure to the below technologies, or sub-themes.
Here’s more on these technologies and why we believe they’ll grow:
Recent advancements in algorithmic development, data proliferation, computing power, and storage allow AI to simulate human intelligence in machines. Through deep learning, AI is already impacting our daily lives by powering large-scale internet search and social media and video recommendations.
And, the industry is likely to grow significantly: ETF manager ARK Invest believes that deep learning will add $30 trillion USD to equity market capitalisations during the next 15 to 20 years¹.
With computers getting better at reacting to complex environments, the prospects for deploying AI across multiple sectors is getting more exciting. By 2024, the AI market is expected to grow to beyond $500 billion USD from $327.5 billion USD in 2021, with a 5-year compound annual growth rate (CAGR) of 17.5%².
Blockchain is a decentralised, or distributed, public ledger of all transactions across a peer-to-peer network. Each “block” of information is corroborated by the network, assigned a unique identity, and then added to the ledger.
These characteristics allow for many use cases for blockchain beyond cryptocurrencies, especially in sectors that can benefit from maintaining transparent, verified transactions and immutable data records, such as the healthcare and supply chain sectors.
Global X, a fund manager specialising in blockchain investments, estimates the total expenditure on blockchain solutions to reach $19 billion USD by 2024 from $6.6 billion USD in 2021, a CAGR of 48%³.
The COVID-19 global pandemic has accelerated cloud computing's rapid adoption. As millions of employees around the world work from home, there's been a surge in internet penetration, data consumption, and demand for real-time collaborative tools from anywhere the user is located.
According to ETF manager First Trust, consumer and business demand will likely continue to drive the technology's widespread growth and adoption⁴. Moreover, the International Data Corporation estimates that worldwide cloud computing spending will rise from $706.6 billion USD in 2021 to $1.3 trillion USD by 2025, a CAGR of 16.9%⁵.
Automated machines are becoming more sophisticated:
- Major hospitals around the world, including in Singapore and Hong Kong, have started using surgical robots to conduct highly-precise and delicate operations.
- In the UAE, AI-powered robots are cleaning metro stations.
- In the US, businesses are deploying robots on farms to pick strawberries.
The possibilities don't stop there. As energy and labour costs rise, many companies require increased automation, better safety mechanisms, and improved energy efficiency in their production lines. These demands are driving advances in robotics, with the global industrial robotics market expected to reach US$40.75 billion by 2024, at a CAGR of 14.11% from US$18.05 billion in 2018⁶.
Semiconductors power many of the cutting-edge digital devices that we use today and form the backbone for the development of any piece of emerging technology. From AI-reliant smartphones to using the Internet of Things in production lines, these chips power technologies that benefit consumers' daily lives and make businesses run more efficiently.
Even though the semiconductor industry experienced supply chain disruptions during the COVID-19 pandemic, the semiconductor industry has held out well. More investments are now pouring into the sector to meet growing demand, and the pandemic is driving technology advances that rely heavily on semiconductors, such as cloud computing and 5G telecommunications.
ETF manager VanEck believes that semiconductor demand is robust and shows no signs of abating any time soon⁷. According to the IDC, the semiconductor market is likely to grow to US$600 billion by 2025. This growth is a CAGR of 5.3% from 2021, which is higher than the typical 3-4% mature growth seen historically⁸.
Invest in game-changing tech without exposing your money to unnecessary risk
Our Technology Enablers portfolio gives investors diverse exposure to the trends that can change the world and grow in the long term with AI, blockchain, cloud computing, robotic, and semiconductor ETFs from leading fund managers, including Global X, Ark Invest, and VanEck.
Thematic investing can generally be risky. That’s why, to address this risk, we build our thematic portfolios with a mixture of themed and balancing assets. This approach allows each investor to tailor their portfolio based on their risk appetite according to the StashAway Risk Index, maximising their exposure to themed assets without exceeding their chosen risk level.
Find out more about our Thematic Portfolios →
You may also be interested in:
¹"Why invest in the Next Generation Internet?", ARK Investment Management LLC, published June 30, 2021.
²"IDC Forecasts Improved Growth for Global AI Market in 2021", IDC, Feb. 23, 2021.
³"Introducing the Global X Blockchain ETF", Mirae Asset, July 14, 2021.
⁴"First Trust Cloud Computing ETF Investor Guide", First Trust, September 2021.
⁵International Data Corporation (IDC), September 2021.
⁶"Industrial Robotics Market - Growth, Trends, and Forecast (2019 - 2024)", Market Reports World, March 1, 2019.
⁷"SMH: Question & Answer", VanEck, Aug. 26, 2021
⁸"Semiconductor Market to Grow By 17.3% in 2021 and Reach Potential Overcapacity by 2023, IDC Reports", IDC, Sept. 19, 2021.
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