Bill Studebaker, CIO of ROBO Global, the creator of the world's first robotics and automation ETF (ROBO - Get Report) , says FANG is yesterday's trade and the next big thing is in robotics, automation, and artificial intelligence, or RAAI.
"In a world where growth becomes starved, people are going to put their hands in their pocket. Capital spending will dry up inevitably and then people have to do what? Get back to managing their business," he explained. "That's improving productivity, cutting costs, generating growth. That's automation. In a world where growth is abundant, the only way to meet the demand is with automation. So I'm really optimistic about the future."
His bullish sentiment is backed up by tech titans like Alphabet (GOOGL - Get Report) CEO Sundar Pichai and Microsoft (MSFT - Get Report) founder Bill Gates who have both called out the transformational shift these new technologies hold for the country, the economy, and investors as they become increasingly ubiquitous.
"[Automation] is happening everywhere. I mean, these are not niche technologies.," Studebaker said. "Rather they're foundational technologies that are being applied to all industries, all markets, and it's happening now."
Studebaker cited healthcare (HTEC) as a massive opportunity for innovation and automation that his firm is now targeting.
He added that the shift has led to an arms race not only among companies, but among nations, and those well-positioned in each lens stand to profit in a big way.
To be sure, among ESG-focused investors there has been a modicum of concern on automation and its potential elimination of millions of logistics, data entry, and even investment and banking roles. For example, on Sunday Deutsche Bank (DB - Get Report) announced it would cut thousands of jobs in part to focus on technology investment and automation.
However, Studebaker sees the long term prospects as promising for job creation as well, assuaging some of those fears.
"If automation is stealing our jobs, they're doing a bad job of it," he said. "If you look at countries that have the highest utilization of automation have the lowest unemployment rates...think about the Amazon example. Amazon of its purchase of Kiva Systems, which is the 200,000 robots that do the fulfillment, Amazon has not reduced employment, they've actually accelerated employment because they've created new demand."
He added that 25% of the jobs that exist today did not exist 25 years ago, providing precedence for a shift in the labor market, rather than an elimination of employment opportunities.
For more of Studebaker's thoughts on the emerging technologies, the trade war's impact on the nascent industries, and why passive investing is the best play at this point.
Watch the full interview below.