2Q 2021 bonds: where are the opportunities as inflation looms?
We explore the bond themes and opportunities 2Q 2021 as inflation picks up.
The world we live in today is undergoing rapid digital transformation, and the world we live in tomorrow will become increasingly connected with widespread technology adoption.
Over the past few years, IoT has emerged to connect everyday objects such as home appliances and vehicles to the internet via sensors or software embedded in them. A network of physical objects is formed in which data can be shared for real-time analytics and even machine learning, and thus enabling concepts like automation.
In this article we consider the growth opportunities in two of the most widely used IoT applications:
Robotics density in the manufacturing industry1
Autonomous vehicles aim to help improve safety on the road
Number of motor deaths and fatal crashes in the US2
IoT is driving evolution across various sectors. While disruption presents new opportunities for some companies to emerge stronger, there are also players that struggle. In a rapidly changing world, bottom-up active management is essential to identify winners and losers from long-term structural changes, enabling overweights and underweights to maximise opportunities.
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The broader adoption of IoT in our everyday life is expected to continue and we see growth potential particularly in manufacturing and transportation.
As global manufacturers are striving for operational efficiency, there is a huge potential market size for increased automation content in robotics (e.g. robot density, robots and cobots with enhanced flexibility), vision (e.g. vision penetration, 3D vision) and laser processing (e.g. laser penetration, ultra-high power lasers).
Elsewhere, autonomous driving is expected to be a game changer. We expect mass market adoption of autonomous vehicles could markedly improve road safety and reduce traffic congestion and carbon dioxide emissions, enhancing the quality of lives of many. We are seeing exciting developments in automotive technology, with heavy investments from major automaker companies and technology giants.
As IoT continues to evolve and bring about rapid changes with lasting impact, a bottom-up active strategy with low active risk could be an optimal approach to seek structural growth opportunities while avoiding those companies less able to adapt to change. In both the industrial automation and autonomous vehicles industries, we have already seen the emergence of companies that are disruptors in these markets.