A new way to profit from the rise of the robots

Are robots really about to fulfil the potential to change our lives that we’ve been hearing about for decades? And can you profit if they do?

From the fictional androids of TV shows such as Lost in Space and Buck Rogers to the labour-saving gadgets helping around the house featured onTomorrow’s World, a breakthrough in robotics seems to have been perpetually just around the corner.

Now, though, confidence is higher than it’s ever been that a step-change in robotics really is here.

This is thanks to recent technological developments, but also to our growing need for the work robots can do.

These developments have prompted investment group Pictet Asset Management to add to the small number of funds that enable investors to back the companies that will gain from the rise of the robots.

“We are facing a problem of productivity,” said Karen Kharmandarian, a senior investment manager at Pictet.

“We have to find new ways to maintain economic growth as our population ages, particularly in the developed world, and robots have the potential to fill the gap.”

We are not talking, of course, about butler-style humanoids, but rather giant industrial factory lines, driverless cars, crop-spraying drones and unmanned lawn mowers and vacuum cleaners.

High-profile examples include Google’s driverless cars and Amazon’s delivery drones.

Mr Kharmandarian explained that the real breakthroughs were coming in the computer processors needed to make sophisticated robots, as well as in power storage and efficiency.

Machines can work with less supporting infrastructure and they can be made less power-hungry, which makes them cheaper and safer for humans to work alongside, because, for example, they emit less heat.

Lower costs allow a greater variety of businesses to make use of robotics, allowing them to meet a greater number of needs for the same investment of capital. A robotic production line, for instance, can be reprogrammed to make products with a greater number of specifications.

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This has led forecasters at Boston Consulting to predict that the robotics sector will grow by 10pc a year for the next 10 years.

The fund, Pictet-Robotics, is Luxembourg-based and will invest in companies from around the world. At launch half come from the US, a quarter from Japan and the rest from Europe and emerging markets.

The annual management fee is 0.8pc, although other costs mean that the total you pay is likely to be higher than this.

The ride from such a specialised area is likely to be bumpy so a fund that invests in it is strictly for sophisticated investors. More general exposure can be gained through technology funds.

The best performer in the tech fund sector is a tracker, the Close FTSE TechMark fund, which has an ongoing charge of 0.79pc.

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