The result is that, like Husselbee, Lowcock currently holds no AI, robotics or tech funds in his arsenal. He prefers to play the theme through the underlying regional funds, in the US, Japan and a small amount in emerging markets.
Deus ex machina
One tech manager who believes the hype around AI is justified is Josh Spencer, manager of the T Rowe Price Global Technology Equity Fund.
“With its rapid development, AI, which involves programming machines to efficiently provide solutions, is permeating into a wide range of fields, from healthcare to financial services to security,” says Spencer. “It is the kind of disruptive technology we are always looking to take advantage of as investors.”
While AI might not yet be replicating itself in robots around the home just yet, or indeed the replicants that were created from the mind of Philip K Dick, author of the novel that Blade Runner was based on, it is in more places than you might expect.
For example, it is embedded in a number of sophisticated mobile devices and digital personal assistants, including Amazon’s Alexa and Apple’s Siri. It is also empowering enhanced search functions from Google and Baidu, Tesla’s innovation in autonomous driving and more targeted customer recommendations from Netflix and Amazon.
According to Axa’s Riley, this is what distinguishes today’s technology from the ‘bluesky’ tech of the ’90s.
“Compared with the market’s price/earnings ratio of 16 times, the P/E of the companies held in our portfolio is 20 times,” he says. “Meanwhile, the revenue growth coming out of the robotics industry is 10%, compared with 4% from the broader market. “The proof of the story is the strong corporate results, and we expect this to continue in the future.”
For Spencer, as the technology required for AI becomes cheaper and more accessible, those corporations seeking greater insights from data are increasingly investing in AI. For this reason it is a theme he is playing within his tech fund.
He says: “We believe AI technology has become so impactful that companies that do not recognise the benefits or the threat of potential disruption risk being on the wrong side of change.”
