Partner Insight: Cobots', or collaborative robots, are cheaper than employing somebody to do relatively menial tasks, write Alex Illingworth and Rosanna Burcheri, managers of the Artemis Global Select Fund
Which ‘clusters' or themes look more attractive at the moment?
Alex: One area we are particularly interested in is automation. The ever-decreasing cost of a robot means the ever-greater ubiquity of robots within general manufacturing. On top of that, there are a number of new industries which benefit from investment in robotics, from food production to surgery to self-driving vehicles. There are also further branches of robotics. There is this concept of ‘cobots', which are collaborative robots. They are cheaper than employing somebody to do relatively menial tasks. Then there's laser cutting and warehouse automation. There are a whole host of areas that, regardless of GDP, require investment. So we're particularly interested in this area of automation and most of the best robotic companies are based in Japan. Given the current economic environment, we think it's increasingly important to find companies that are not just piggy-backing on GDP growth.
It's interesting. We assume that the US lead the world in automation because of Silicon Valley and so on, but on that specific area of robotics it's not the US
Rosanna: For a simple reason: Japan has an older population so the country has to look for a structural way to improve productivity with fewer human bodies around. They invested to
solve the problem early on. What's more, in certain areas of the world we see companies at the onset of wage inflation which can create a problem if you don't have pricing power. So the solution for these companies is to invest and automate their production line as much as possible.
Alex: One of our largest positions in automation is Daifuku, which started its life in baggage reclaim. It's now a global leader in factory warehouse automation.
Finally, why do you think an adviser should consider this fund at this point in the cycle?
Alex: We've designed a fund for all seasons, a fund where we can get you through an economic cycle, and one which pays very strong adherence to valuation and understands balance sheet value as well as cashflow value.
Rosanna: Whilst conservative, the fund isn't boring. It's very much skewed to medium-size companies rather than the large caps that everybody knows. You will find names in there that are different to our peers. Like Daifuku, that you won't find in a lot of other global funds.
Alex: I would add that we are later in the economic cycle and live in volatile times. So we believe that you increasingly need companies that can look after themselves. We continue to find plenty of companies whose growth or asset backing justify their valuation. We have exposure to some of the strongest global growth trends but we also naturally build in some defensiveness to the portfolio. As such, we have a process, and in particular a set of valuation tools, that can deal with the changing demands of an economic cycle.
to learn more about the Artemis Global Select Fund, whose sixty stocks are selected on their potential to grow and prosper, even in periods of economic contraction