As we reach the midpoint of 2023, it’s clear that the year has brought unexpected challenges and volatility. What began as a bear market rally has now led some to believe that a new bull market may be emerging on a global scale. Despite this, there is still uncertainty about how long the current market conditions can be sustained, especially in the US where inflation has been decreasing, employment remains strong, and economic growth continues. With the Federal Reserve’s ongoing involvement, the market’s future remains uncertain as we approach the Fourth of July holiday in the US.
One standout performer this year has been the tech sector, which has experienced strong returns despite a high-rate environment. After a difficult 2022, equity investors have seen steady returns, with all of the ROBO Global Indexes benefiting from the strength in technology.
ROBO Global Healthcare Technology & Innovation Index (Ticker: HTEC)
The ROBO Global Healthcare Technology and Innovation Index (HTEC) has underperformed compared to the equity market this year, with a 4.38% increase in the first half of 2023. Investor interest in healthcare has waned due to the lasting effects of Covid disruptions and underperforming healthcare equities. However, it is expected that companies focused on cutting-edge technologies in healthcare, including medical devices, lab process automation, and various areas of healthcare innovation, will benefit from an acceleration in elective procedures in the second half of 2023.
The performance of subsectors within the HTEC index has been mixed, with the Medical Instruments subsector posting a 13.4% return, while other subsectors have seen less positive results.
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ROBO Global Artificial Intelligence Index (Ticker: THNQ)
The ROBO Global Artificial Intelligence Index (THNQ) saw a 36% increase in the first half of 2023, with an 11% return in Q2. The AI ecosystem has shown signs of recovery after a challenging 2022, and investors are beginning to recognize the rapid adoption of generative AI. While many are focused on the largest cap companies, there is also potential for growth in other areas of AI applications.
Most of the subsectors within the THNQ index posted positive returns, with strong performances from Business Process and Semiconductors.
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ROBO Global Robotics & Automation Index (Ticker: ROBO)
The ROBO Global Robotics & Automation Index returned 26.1% in the first half of 2023, with a 7.1% increase in Q2. The index has consistently outperformed global equities, despite foreign currency headwinds. Standout performers included the Logistics & Warehouse Automation and Computing & AI subsectors, while other subsectors, such as Healthcare and Food & Agriculture, lagged behind.
Looking ahead, there are growth opportunities in the Manufacturing & Industrial Automation subsector, as an increasing need for automation solutions arises in the context of rising costs and labor shortages.
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