Going Global: Mapping the index
Inside the Index
The goal of ROBO Global is to provide an accessible, intelligent, and diversified platform to track this next megatrend. Our management team and strategic advisory board is comprised of senior leaders from both the academic and financial research world. This index is global, deliberately broad and built for the long term. The best approach for an industry in its early stages is to be as inclusive as possible as there will be tremendous creative destruction to come. Including all players in a proportionate and equally weighted fashion ensures that we capture the overall growth trend while minimizing company-specific risk.
ROBO Global has established the first benchmark industry classification system for identifying robotics and automation companies. This industry analysis framework for investment research, portfolio management and asset allocation currently has 12 sub-sectors which fall under either Technology or Applications.
In order for a system to exhibit autonomy, it must be able to sense its environment, in addition to determining its own internal state. For human beings, these are called exteroception and proprioception. Sensing is important for the same reasons that our exteroceptive senses (sight, sound, etc.), and our proprioceptive senses (ability to know where our limbs are and what they are doing without directly observing them) are important for human beings. For robotic systems, however, we are not limited to the standard senses. Almost anything that can be measured can be made into a sensor.
The manufacturing of items is incomplete without the material handling and distribution channels that bring the objects to their intended users. The many economic advantages to speedy and error-free distribution, such as operating with low-inventory and being responsive to customer demands, is a significant growth area for robotics and automation. This is continually reducing the costs for end-users, both businesses and consumers.
The index is maintained by a team of financial and robotics experts to ensure that it remains a leading indicator of the robotics and automation market. Index components are selected from a proprietary database of companies that derive all or a portion of revenues from robotics, automation, and related technologies.
AeroVironment is a leading manufacturer of unmanned aerial solutions (UAS) and missile defense systems. Its UAS are now commonly used for reconnaissance missions of remote locations, by law enforcement agencies, in search and rescue operations, and for helping fire fighters fight, monitor, and control fires.
The Index is made up of “bellwether” (40%) and “non-bellwether” (60%) companies. Bellwether companies (BWs) are well established leading players, whose core business is directly related to robotics & automation. Non-bellwether companies (NBWs) have a distinct portion of their business and revenue in robotics & automation and have the potential to grow through innovation and/or market adoption of their products and/or services. Within BW and NBW each constituent is equally weighted. This approach avoids the large capitalisation and “buy high, sell low” biases of market capitalization indices and ensures that the Index provides exposure to companies in the early stages of new innovation and technologies as well as the more established players. The 40/60 weighting results in each BW having roughly twice the weight of each NBW. Index constituents are initially selected from the ROBO Global Classification in accordance with predetermined rules and objective criteria including minimum market capitalization and average daily value traded. At each quarterly rebalance the Index constituents are reweighted and any additions or deletions are made as determined by the Advisory Index Committee at ROBO Global™.