DISRUPTIVE TECHNOLOGY. FOR PROFESSIONAL INVESTORS MARKETING COMMUNICATION PAM HEGARTY London, 3 October 2017

Transcription

1 DISRUPTIVE TECHNOLOGY FOR PROFESSIONAL INVESTORS MARKETING COMMUNICATION PAM HEGARTY London, 3 October 2017

2 Disruptive technology Agenda Disruptive technology themes Stock examples Investing in the themes 2

3 Disruptive technology themes

4 Themes Innovative technology is enabling significant transformation across the global economy Technology themes Cloud computing Artificial intelligence/ data analytics Automation/ robotics The Internet of Things Augmented and virtual reality Sector implications Industrials automation/ robotics, 3D printing, predictive maintenance Healthcare advanced genomics, health monitoring, predictive analytics Financial services digitisation, fraud prevention, payments technology, block chain Consumer e-commerce, home automation, autonomous driving Energy seismic data analysis, predictive maintenance 4

5 Themes (2) Foundational technologies The internet Mobile computing smartphones/ 4G and 5G networks Semiconductor advances Moore s Law, materials science, parallel processing Enabling low-cost processing, sensors and storage Cybersecurity Large data sets - generated by social media services and connected devices Opportunities Digital transformation of business models Energy and resource efficiency Improved safety automotive (assisted/ autonomous driving), physical security Faster drug discovery and targeted therapies Equitable access to communication technology, education and healthcare Risks Declining demand for human labour in some professions; structural unemployment Data ownership and privacy Disintermediation/ disruption of traditional business models 5

6 Themes are interrelated and based on foundational technologies IoT Robotics AI/ Data analytics Cloud computing Internet, mobile computing, cybersecurity, parallel processing, big data

7 Cloud computing Cloud computing enables: Efficient use of computing resources and pay-as-you-go IT spending Simplified new company formation Development and proliferation of innovative consumer services Rapid deployment of software including upgrades and enhancements Morgan Stanley, Public cloud revenues expected to triple by

8 Artificial intelligence / data analytics Artificial intelligence is enabled by (1) big data and (2) low cost computing; uses include: Natural language processing and speech recognition (Google Translate, Apple s Siri, Amazon Alexa) Image and facial recognition (augmented reality, iphone X Face ID) Fraud identification and prevention and cyber security Autonomous driving and other automated and robotic systems Source: Legaltechnology.com, Artificial Intelligence in Law The State of Play in 2015?, 3 rd November

9 Automation / robotics Bank of America Merrill Lynch, Bank of America Merrill Lynch,

10 Automation / robotics (2) Bank of America Merrill Lynch, McKinsey Global Institute, Where machines could replace humans and where they can t (yet) July

11 The Internet of Things (IoT) IoT applications include: Consumer - home automation, home security, fitness monitoring Commercial/ industrial supply chain/ asset tracking, telematics, factory automation Government and utilities public transit, smart cities, utility metering Source: Goldman Sachs Global Investment Research, The Outsiders Emerging Ecosystems, July 12,

12 Augmented and virtual reality AR and VR not just for games: Ikea Place an app that enables you to see how furniture looks in your room (for ios 11) Ford using Microsoft HoloLens technology in automotive design process to augment 3D models Cubit ruler app measures the size of and distance between real life and digital objects Night Sky identify stars, planets, constellations, and satellites with an ios device Bank of America Merrill Lynch, Photo source: Three Augmented and Virtual Reality Apps for Design and Construction, Architect Magazine; August 27, Bank of America Merrill Lynch,

13 Stock examples

14 Stock examples Apple leading provider of integrated smartphone platforms Augmented reality toolkit is enabling a host of new applications Artificial intelligence powers the new facial recognition technology (Face ID) Levered to the Internet of Things (Watch, home automation) Dexcom innovative medical device company Provides continuous glucose monitoring for diabetics Enables better control of insulin dosing and communicates real-time alerts to caregivers SAP leading provider of enterprise resource management software Levered to cloud computing provides software-as-a-service Developing a platform, Leonardo, to manage the Internet of Things Splunk indexing engine (software) for logging and searching machine data Enabler of big data analytics, the Internet of Things, and cybersecurity Splunk s software processes the real-time information produced by websites, applications, servers, networks and mobile devices 02/10/

15 Investing in the themes

16 Investing in the themes Identify transformative technology themes that enable new business models or improve efficiency Industrials Focus on long-term opportunities Identify and invest in companies that are enabling or adopting one or more disruptive technologies Energy Healthcare Avoid companies that are threatened by the forces of change Technology Integrate ESG analysis Cross-sector approach technology innovation is occurring across the economy Financials Consumer We believe companies that enable or adopt innovative technologies and business models will produce superior long-term growth and returns on invested capital, and that a portfolio of these stocks should outperform over the long term 16

17 Investing in the themes (2) Adhere to a repeatable, disciplined investment process Top-down analysis of themes to identify stock ideas Active, fundamental bottom-up stock research Long term investment horizon: 3+ years Concentrated global all-capitalisation equity portfolio of 40 to 60 stocks Collaborate with BNP Paribas AM global investment resources to manage the fund Portfolio manager runs the fund in collaboration with US sector specialist colleagues in cooperation with the Global Specialist and Thematic Equity Team and supported by BNP Paribas AM s Asian and Emerging Markets equity teams 17

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