As its having a greater impact on our lives should it have a bigger impact on your investment portfolio? In the coming weeks we will be taking a look at the key topics and debates within the technology sector to help you find the opportunities and make the most of them.
We wanted to start by sharing a piece written and published by our partners iShares BlackRock.
The rapid pace of technological change
Technological change is sweeping through industries, overhauling business models, reducing traditional jobs and limiting inflation. The number of people employed in US manufacturing has fallen by almost 30% since 2000, even as manufacturing output has increased over the same period.
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Sources: BlackRock Investment Institute, Federal Reserve and US Bureau of Labor Statistics, November 2016. Note: the base year (100) for manufacturing production is 2012.
Advances in artificial intelligence could have an even bigger impact on better-paying white-collar jobs in services industries such as finance. And fossil fuel companies risk being upended by renewables once energy-storage technologies improve.
The implications are broad-based. We see technological innovation keeping a lid on price increases, not just in manufacturing but also in some services. Technological change − coupled with globalisation − is also making many people fear for their futures. This is not new; machines and the steam engine replaced textile workers and horses during the Industrial Revolution. Yet horses don’t vote; people do. Innovations today are being adopted at an increasingly rapid pace. This is feeding into a forest fire of populist politics around the world − and likely voter disappointment as technological change is unlikely to decelerate.
The rapid pace of technological change is causing disruption across industries and displacing jobs − and is arguably fuelling populist politics.
For those investors looking to gain exposure to this theme within in a portfolio, you could consider an ETF. The iShares Automation & Robotics UCITS ETF (RBOT) seeks to track an index of companies which are generating revenues from specific sectors associated with the development of automatic and robotic technology.
Or you could consider the ROBO Global Robotics and Automation GO UCITS ETF.
These are the views of the analysts at iShares BlackRock and not of TD Direct Investing
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy.
Exchange Traded Products (ETPs) including ETFs, ETCs and ETNs track a wide variety of underlying investments, some of which may be complex in nature and involve leverage, shorting or a high degree of volatility. It is therefore important that you read the Prospectus or Fact Sheet (available on the issuers’ websites) prior to investing and ensure that you understand how it is structured and the associated risks.
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