As the BOJ continues to load up on Nikkei ETFs in hopes that the rest of the market will be faked out and buy Japanese equities, Mrs. Watanabe continues to be a nemesis.
In addition to being in the market for DM government bonds, Japanese investors are also piling into Nikko Asset Management's Global Robotics Equity Fund, which would be fine with the BOJ, except that only a third of the fund is allocated to Japanese equitites. As the FT reports, the fund's assets are divided up roughly in thirds among the US, Japan and Europe, holding a portfolio of 41 stocks relating to robotics and automation. The fund's top holdings are Japanese factory automation group Keyence, and US-based Rockwell Automation.
The fund launched on August 31, 2015 with assets of about $1 billion, however that has now swelled to nearly $5 billion being driven by retail investors who like a yen-based fund that diversifies into six other currencies including the USD, Euro, and Swiss Franc. Since inception, the fund has gained only .6%, however thanks to the BOJ and its maniacal pursuit of negative interest rates, a .6% return doesn't appear all that bad to investors (especially since the fund's benchmark Nikkei 225 is down more than 10% over that same time period).
"When we originally thought up this fund, we thought this was going to attract young, male investors. Actually, our distributors are telling us that women and older investors are buying strongly. You have to remember that Japan is a country where people are very familiar with robots." said Naofumi Chiba, the fund's creator, adding that Japanese investors can see that not only are companies such as Google, Amazon and Facebook pouring money into robot companies, but they can already see the effects of a shrinking population at home.
So the older generation of savers are choosing to diversify away from Japanese equities and JGBs, causing further head scratching for Abe and Kuroda. Funny how that works, central planners cannot simply control every decision made by individuals, yet it is tried every single time by the smartest people in the room.
The fund, with its bet on the future of self-driving cars, helper automations, artificially intelligent drones and human-free factories may have started at just the right time. Recall that China has already made a plan to become more dependent on robotics in order to overtake the likes of Germany, Japan, and the US in terms of manufacturing sophistication, which means that the rest of the world won't be far behind in that effort (WalMart drones replacing humans in its distribution centers for example). Also, the size of the global robot and AI market is set to grow to $153 billion by 2020 according to BAML, with robots performing 45% of manufacturing tasks by 2025.
We'll leave readers with this interesting video, which shows how the Japanese have embraced cutting-edge robotics. This is a prototype of the Smart Cyber Operating Theater (SCOT), which helps surgeons track a patient's condition in real time.
From the Japan Times
Currently designed for brain tumor surgery, SCOT helps surgeons to track a patient’s condition in real-time by displaying on a computer monitor information such as the grade of tumors and the level of nervous system damage — information for which, until recently, surgeons have had to rely on their experience and intuition.
Surgical skill is still the most important part of an operation, but the project aims to improve surgical precision and patient safety with the help of the online system.
Surgery has long employed cutting-edge technology. But in many cases, the information provided by various devices hasn’t been available in an organized format, Muragaki noted.
In smart surgery, on the other hand, information from each medical device is consolidated in real-time, reducing the burden on doctors and shortening surgical time, a project member said.
The information collected during surgery can also be shared online, allowing experienced doctors to advise their less-experienced counterparts remotely during operations.
The stored data can also be studied by medical students and inexperienced doctors so they can improve their technique. In the event of a surgical error, the data can be used to analyze mistakes and avoid them in the future.
The standard version of SCOT, which essentially displays a patient’s real-time information, has been in operation at Hiroshima University hospital since May. The “hyper” version, which has additional functions such as remote control of robotics based on the real-time information, will start operating at Tokyo Woman’s Medical University by summer 2019.
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via http://ift.tt/1V95ku5 Tyler Durden