Big data, AI, even robotics – technological mega-trends are ensuring that increasingly disruptive innovations are having a lasting impact on the market. They are also fast becoming an economically important factor in production and competition, allowing companies which recognise the signs of the times to tap into previously undreamed-of potential. And an edge on the competition frequently goes hand in hand with higher share prices. Reason enough, then, for investors to take a look at this sector. The experts at Morningstar have done this on a professional scale, identifying nine technology themes which they expect to generate exponential economic benefits. These are big data and analytics, nanotechnology, networks and computer systems, energy and environmental systems, medicine and neurosciences, robotics, 3D printing, bioinformatics and innovation in financial services.
The Morningstar Big Data & Robotics Index was developed on the basis of these forward-looking themes. It only considers companies which operate in the big data, analytics and robotics sectors. Within big data and analytics, the businesses in question are those which have such large and complex data sets that they can no longer be processed using standard methods. Among the related sub-themes are the Internet of Things, machine learning and artificial intelligence. Strict rules are also applied for the robotics segment: only companies which are involved in the design, construction, operation and application of robots make it into the index. All of them must also meet minimum criteria for liquidity and market capitalisation. Finally, a top 50 is selected from the qualifying equity pool. From an industry perspective, the information technology sector starts as the heavyweight in the pack with a 45.8% share, followed by healthcare at 26.6%.
In addition to the concerns already mentioned, Amazon, Fanuc and Intuitive Surgical, the two big players Meta Platforms and Nvidia are also on board, for instance. While the former will be putting out feelers in the direction of virtual reality in the future, digital progress would be much slower without Nvidia's high-performance processors. The company manufactures what are known as GPUs, which are much more powerful than conventional CPUs. According to Nvidia, GPUs are set to accelerate a thousandfold by 2025. From Switzerland, ABB is another to have made it onto the Morningstar Big Data & Robotics Index. The group counts among the world's leading suppliers of industrial robots and robot software alongside Fanuc and Yaskawa. In the first quarter of 2022 the number of orders in this business line increased by 60 per cent. At present, healthcare company Merck is refining “Elenoide”, the humanoid robot built in Japan in 2018, in order to conduct research into how humans react to this human-robot interaction. Palantir, meanwhile, is a true data specialist. The US group helps government agencies and institutions, for example, analyse huge volumes of data in order to combat criminality, among other uses. The company is also active in business, however: Palantir recently announced a partnership with a world-leading automotive group, for instance.
Investors can now bring all these highly promising future themes into their portfolio with a single investment thanks to the newly issued tracker on the Morningstar Big Data & Robotics Index. Denominated in Swiss francs, the participation product follows the performance of the underlying on a 1:1 basis. Only a management fee of 1.10% p.a. is deducted. In return, Morningstar ensures that the index is always kept up-to-date, reviewing the composition annually and adjusting it as required. In addition, all index components are weighted equally in the rebalancing. The open-ended structure of the tracker reflects the long-term approach that the mega-trends demand. Another plus point is that PostFinance is the guarantor of the certificate, which is issued by Leonteq. The leading position of the financial group makes it a system-relevant bank, and it enjoys a respectable AA rating from ratings agency Standard & Poor’s.
Management Fee: 1.10% p.a.
Index Sponsor: Morningstar Inc.
Issuer: Leonteq Securities AG, Guernsey
Guarantor: PostFinance AG, Bern, Switzerland
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