innovation day - lyxor etf · martin ford, author “rise of the robots: technology and the threat...

Document title

Robotik, KI, ESG

16. Oktober, Frankfurt

Innovation Day

Teil 1: 09:30-11:30

Robotik-/KI-Frühstücksbriefing

Document title

Willkommen

Heike Fürpaß-Peter,

Head of Sales Germany & Austria, Lyxor ETF

François Millet,

Head of ETF and Index Product Development, Lyxor ETF

Document title

Präsentationsunterlagen auf:

www.lyxorETF.de/InnovationDay

WITH THE “RISE OF THE ROBOTS” INDEX

TIME TO INVEST IN ARTIFICIAL INTELLIGENCE (AI)

D A N I E L F E R M O N

H E A D O F S G T H E M A T I C R E S E A R C H

C L A S S I F I C A T I O N

O C T O B E R 2 0 1 8

With thanks to:

Martin Ford, Author “Rise of the Robots: Technology and the Threat of a Jobless Future”

Societe Generale (“SG”) does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that SG may have a

conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment

decision. PLEASE SEE APPENDIX AT THE END OF THIS REPORT FOR THE ANALYST(S) CERTIFICATION(S), IMPORTANT DISCLOSURES AND

DISCLAIMERS. ALTERNATIVELY, VISIT OUR GLOBAL RESEARCH DISCLOSURE WEBSITE

https://insight.sgmarkets.com/go/compliance/equity

5TIME TO INVEST IN ARTIFICIAL INTELLIGENCE (AI) │ 12/10/2018 │

AI: FROM DREAM TO REALITY

Source: SG Cross Asset Research/Thematic


AI MAIN TRENDS

AUTOMATION AND ROBOTICS

▪ Field of study that creates programs able to complete tasks automatically.

▪ It reduces or eliminates the intervention of humans.

▪ Revenues in 2016e: $250-600m.

IMAGE RECOGNITION

▪ Field of study that gives a machine the ability to process, understand, and recognise what it is seeing.

▪ Revenue in 2016e: $100-250m.

MACHINE LEARNING

▪ "Field of study that gives computers the ability to learn without being explicitly programmed” A. Samuel.

▪ Revenue in 2016e: $150-350m.

SPEECH RECOGNITION

▪ Field of study that teaches to machines how to communicate with humans.

▪ Revenue in 2016e: $150-300m.


AI AN EXPONENTIAL GROWTH MARKET

Source: SG Cross Asset Research/Thematic, Statista

AI is widely perceived as a promising

market: revenues are likely to grow

exponentially.


KEY TECHNOLOGIES: DEEP LEARNINGTHE PRIMARY FOCUS OF CURRENT AI RESEARCH AND DEVELOPMENT

Neural Networks

Dramatic breakthroughs over the

past decade

No investment in dedicated chip architectures

Significant opportunities for future innovation


KEY TECHNOLOGIES: ROBOTICSROBOTS ARE BECOMING MORE DEXTROUS, FLEXIBLE AND AFFORDABLE

Industrial Perception

3D Machine Vision, Dexterity

Moves up to 1 box every second

Never tires; no injuries


KEY TECHNOLOGIES: SOFTWARE AUTOMATIONDRAMATIC SAVINGS IN WHITE COLLAR LABOR & FEWER ERRORS

Source: Hackett Group, Wall Street Journal


AI CHALLENGES: DEEPENING INEQUALITIESU.S. PRODUCTIVITY VS COMPENSATION

Source: US: Economic Policy Institute; UK: HM Treasury & Office of National Statistics


AI CHALLENGES: DEEPENING INEQUALITIESLABOR’S SHARE OF NATIONAL INCOME

Source: Loukas Karabarbounis and Brent Neiman and Louis Morel (Bank of Canada)

United States Japan

China Germany

Canada


AI CHALLENGES: DEEPENING INEQUALITIESU.S. JOBLESS RECOVERIES AND POLARIZATION

Source: Bureau of Labor Statistics, St. Louis Federal Reserve

U.S. Recessions – Months for Employment to Recover


AI CHALLENGES: DEEPENING INEQUALITYMACROECONOMIC IMPACT / CONSUMER DEMAND

Machines do not consume

Only people and governments provide final

demand for the economy

Secular stagnation?

Challenges to top-line growth may increase the

incentive to invest in efficiency-improving

technologies, make the AI/robotics sector relatively

attractive


AI CHALLENGES: SECURITY, TRANSPARENCY AND PRIVACYAUTONOMOUS SYSTEMS WILL PRESENT NEW TYPES OF RISK

Security

Autonomous systems, such as self-driving vehicles, could be susceptible to cyber attack or hacking. The same is

true for critical infrastructure that relies increasingly on AI. Securing these systems against attack will require the

development and deployment of powerful AI-based security solutions. In other words, “white hat” AI will need to

be better than “black hat” AI. This will create a massive opportunity for innovation and investment.

Transparency

Machine learning systems (especially deep learning neural networks) typically operate as “black boxes.” Even the

engineers who create these systems cannot necessarily understand how they arrive at conclusions. This is a major

problem in areas like regulation, criminal law or employment decisions, where a fair, transparent process is essential. If

bias exists in the data processed by a machine learning algorithm, it can manifest in outcomes. Research is underway to

build AI systems that can explain how they reach conclusions; this also represents a significant opportunity.

Privacy

AI is already being used by authoritarian governments to monitor and repress public speech. Large technology companies

also collect vast amounts of data on individuals, and this inevitably leads to privacy concerns. It is likely that political and

regulatory challenges will arise in the near future.


AI OPPORTUNITIES: ADVANCES IN SCIENCE AND TECHNOLOGYINTELLIGENCE IS THE ULTIMATE RESOURCE

Advancing artificial intelligence will be deployed across the board and will likely result in new breakthroughs in science and

medicine, as well as in critical technology areas like energy and transportation. Ultimately, it should help us to solve some of

humanity's most pressing challenges, including climate change and an ageing population.

AI and robotics can improve business efficiency and management decision-making, and lead to higher profitability, as well as

lower-cost products and services, and entirely new markets.


"Our goal is to first solve intelligence, and

then use that to solve everything else.“

- Demis Hassabis, founder Google DeepMind

THE RISE OF THE ROBOTS INDEX

An effective way of investing in AI

Daniel Fermon

Head of SG Thematic Research


WHO COULD BENEFIT MOST FROM AI

Source: SG Cross Asset Research/Thematic, PwC

The $15.7tn that AI could bring to the global economy by 2030 is likely to be allocated as shown below:

North

America: + $3.7

trillion

DevelopedAsia: + $0.9

trillionLatin America:

+ $0.5 trillion

China:

+ $7 trillion

Southern Europe: + $0.7

trillion

Northern Europe: + $1.8

trillion

Africa, Oceania and other Asian Markets

+ $1.2 trillion


AI IS MAINLY CONCENTRATED IN NORTH AMERICA


Geographic distribution of AI companies (2018e)


AI ACTORS: TECHNOLOGY GIANTS CLEARLY LEAD THE MARKET

According to CB Insights, 250 companies

working on AI have been bought by tech giants

since 2012.

That trend seems to have accelerated lately,

with numerous deals closed between 2016

and 2017.

Last year alone, Apple bought Lattice Data (AI)

for $200m, Intel acquired Mobileye for $15.3bn,

and Facebook bought Ozlo.

Source: SG Cross Asset Research/Thematic, CB Insights, TechCrunch


A UNIQUE STOCK SELECTION PROCESS FOR THE RISE OF THE ROBOTS INDEX (1)


We track the development of AI thanks to:

1. Big data research

2. Martin Ford’s knowledge of the most recent

developments in AI and robotics

We have selected 210 companies that fit with this thematic. Thus, we

offer the largest investment universe compared with alternatives focused

on AI and robotics.

Employing this large sample, we have developed an algorithm based on three criteria that

balance small but promising companies with larger, more established names. Our index

thus offers strong diversification across AI/robotics leaders of all sizes and growth stages.


STOCK SELECTION PROCESS (2)


R&D Expanditureson net sales

SystematicSelection of Top Score Companies

3 Years Sales

Growth

Return on Invested Capital

150 Companies

Artificial Intelligence:

The Rise of Robots Index

Fundamental Step

QuantitativeStep: Z-Score


STOCK SELECTION PROCESS (3)


First criterion: R&D expenditures/net sales

We selected companies that invest heavily in R&D.

▪ Rationale: we consider R&D to be essential to sustained leadership in the fields of AI and robotics. Therefore, we

concentrated on companies that dedicate a large part of their profit to R&D.

Second criterion: return on invested capital

We focus on return on invested capital (ROIC).

▪ Rationale: we want to invest in companies that have demonstrated the ability to deliver real results.

Third criterion: 3y sales growth

AI being relatively recent, we try to identify companies with growing businesses.

▪ Rationale: we believe top-line growth is due partly to AI-related initiatives within the companies selected in our

universe and that robust growth will facilitate the continued R&D investment that is critical to AI/robotics innovation.

Systematic selection of 150 companies.

Out of a universe of 210 companies, 150 are selected and weighted depending on their Z-Score* to form the index.

We also included an ADV (average daily volume) filter.

* A Z-Score measures the distance between a value and the mean of the observed population.


RISE OF THE ROBOTS PERFORMANCE (BACKTEST) VS EXISTING ETF ON AI


RISE OF THE ROBOTS PERFORMANCE VS EXISTING ETF ON AI (SINCE INCEPTION)


RISE OF THE ROBOTS INDEX COMPONENTS (TOP 25 COMPONENTS)*

*Weight at the last rebalancing in April 2018, Source: SG Cross Asset Research/Thematic

Bloomberg ticker Rank Ticker Company name RD/sales ROIC Sales growth Weight* Country FB UQ equity 1 FB UQ Facebook Inc 19% 25% 48% 1.03962% UNITED STATES

NVDA UQ equity 2 NVDA UQ NVIDIA Corp 18% 42% 29% 1.02798% UNITED STATES

7779 JT equity 3 7779 JT CYBERDYNE Inc 55% -2% 56% 1.00265% JAPAN

MZOR UQ equity 4 MZOR UQ Mazor Robotics Ltd 13% -14% 47% 0.98836% ISRAEL

INTU UQ equity 5 INTU UQ Intuit Inc 19% 47% 7% 0.94805% UNITED STATES

700 HK equity 6 700 HK Tencent Holdings Ltd 7% 19% 45% 0.92471% CHINA

6324 JT equity 7 6324 JT Harmonic Drive Systems Inc 5% 12% 32% 0.92057% JAPAN

CAVM UQ equity 8 CAVM UQ Cavium Inc 38% -3% 40% 0.90522% UNITED STATES

MU UQ equity 9 MU UQ Micron Technology Inc 9% 34% 13% 0.89916% UNITED STATES

BABA UN equity 10 BABA UN Alibaba Group Holding Ltd 9% 7% 49% 0.88751% CHINA

AMS SW equity 11 AMS SW ams AG 20% 7% 39% 0.87397% AUSTRIA

ADBE UQ equity 12 ADBE UQ Adobe Systems Inc 17% 19% 21% 0.87004% UNITED STATES

WDAY UQ equity 13 WDAY UQ Workday Inc 42% -13% 40% 0.86834% UNITED STATES

6414 TT equity 14 6414 TT Ennoconn Corp 9% 8% 97% 0.85610% TAIWAN

2382 HK equity 15 2382 HK Sunny Optical Technology Group Co Ltd 5% 34% 39% 0.85080% CHINA

3443 TT equity 16 3443 TT Global Unichip Corp 13% 21% 21% 0.84780% TAIWAN

ALGN UQ equity 17 ALGN UQ Align Technology Inc 7% 23% 25% 0.83608% UNITED STATES

CDNS UQ equity 18 CDNS UQ Cadence Design Systems Inc 41% 13% 7% 0.82955% UNITED STATES

6723 JT equity 19 6723 JT Renesas Electronics Corp 16% 12% -2% 0.82749% JAPAN

MANH UQ equity 20 MANH UQ Manhattan Associates Inc 10% 67% 7% 0.82256% UNITED STATES

6920 JT equity 21 6920 JT Lasertec Corp 8% NA 9% 0.81298% JAPAN

2379 TT equity 22 2379 TT Realtek Semiconductor Corp 27% 7% 10% 0.80780% TAIWAN

IPGP UQ equity 23 IPGP UQ IPG Photonics Corp 7% 19% 23% 0.80400% UNITED STATES

CY UQ equity 24 CY UQ Cypress Semiconductor Corp 15% -3% 54% 0.80283% UNITED STATES

NXPI UQ equity 25 NXPI UQ NXP Semiconductors NV 17% 6% 20% 0.79309% NETHERLANDS


CONCLUSION: WHY OUR ETF CAPTURES AI BETTER THAN OTHERS

SG Cross Asset Research/Thematic

Three ETFs on AI and Robotics have already been in existence

since 2016

However, our approach brings many advantages:

More stocks: We hold at least half as many stocks again as our

major peers. We won’t hold more as this would risk diluting the

theme

More appropriately diverse: We capture AI’s spread beyond

Industrials & IT, but we don’t ignore the benefits & growth

prospects of hardware

More flexible: We add retail giants like Amazon and Alibaba to

capture AI’s impact on consumers, making this product unique

The Rise of the Robots Index is:

Better balanced

Better able to capture change

Better suited to evolve over time


APPENDIX

Report completed on 2 Oct, 2018 17:25 CET

ANALYST CERTIFICATION

The following named research analyst(s) hereby certifies or certify that (i) the views exp ressed in the research rep o rt accu r a te ly reflect his or her or their personal views about any and all of the subject securities or issuers and (ii) no part of his o r he r o r the ir

compensation was, is, or will be related, directly or indirectly, to the specific recommendations or views exp ressed in this repo rt :

Daniel Fermon

The analyst(s) who author research are employed by SG and its affiliates in locations, including but not limited to, Paris , London ,

New York, Hong Kong, Tokyo, Bangalore, Frankfurt, Madrid, Milan, Geneva, Seoul, Warsaw and Moscow


APPENDIX

All pricing information included in this report is as of market close, unless otherwise stated.

MSCI DISCLAIMER: The MSCI sourced information is the exclusive property of Morgan Stanley Capital International Inc. (MSCI). Without

prior written permission of MSCI, this information and any other MSCI intellectual property may not be reproduced, redisseminated or

used to create any financial products, including any indices. This information is provided on an “as is” basis. The user assumes the

entire risk of any use made of this information. MSCI, its affiliates and any third party involved in, or related to, computing or compiling

the information hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular

purpose with respect to any of this information. Without limiting any of the foregoing, in no event shall MSCI, any of its af filiates or any

third party involved in, or related to, computing or compiling the information have any liability for any damages of any kind. MSCI,

Morgan Stanley Capital International and the MSCI indexes are service marks of MSCI and its affiliates or such similar language as may

be provided by or approved in advance by MSCI.


APPENDIX - DISCLAIMER

FOR DISCLOSURES PERTAINING TO COMPENDIUM REPORTS OR RECOMMENDATIONS OR ESTIMATES MADE ON SECURITIES OTHER THAN THE PRIMARY SUBJECT OF THIS RESEARCH REPORT, PLEASE VISIT OUR GLOBAL

RESEARCH DISCLOSURE WEBSITE AT https://www.sgmarkets.com/go/equity/compliance or call +1 (212).278.6000 in the U.S..

European Specialty Sales

If a European specialist sales personnel is listed on the cover of research reports, these employees are in SG’s Global Markets division responsible for the sales effort in their sector and are not part of SG’s Cross-Asset Research Department.

Specialist Sales do not contribute in any manner to the content of research reports in which their names appear.

SG has mandatory research policies and procedures that are reasonably designed to (i) ensure that purported facts in research reports are based on reliable information and (ii) to prevent improper selective or tiered dissemination of research reports.

The analyst(s) responsible for preparing this report receive compensation that is based on various factors including SG’s total revenues, a portion of which are generated by investment banking activities.

Non-U.S. Analyst Disclosure: The name(s) of any non-U.S. analysts who contributed to this report and their SG legal entity are listed below. U.S. analysts are employed by SG Americas Securities LLC. The non-U.S. analysts are not

registered/qualified with FINRA, may not be associated persons of SGAS and may not be subject to the FINRA restrictions on communications with a subject company, public appearances and trading securities held in the research analyst(s)’

account(s): Daniel Fermon Société Générale Paris

IMPORTANT DISCLAIMER: The information herein is not intended to be an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities and has been obtained from, or is based upon, sources believed to be reliable but is not

guaranteed as to accuracy or completeness. Material contained in this report satisfies the regulatory provisions concerning independent investment research as defined in MiFID. Information concerning conflicts of interest and SG’s management of

such conflicts is contained in the SG’s Policies for Managing Conflicts of Interests in Connection with Investment Research which is available at https://insight.sgmarkets.com/go/compliance/equity or https://insight.sgmarkets.com/go/compliance/credit

SG does, from time to time, deal, trade in, profit from, hold, act as market-makers or advisers, brokers or bankers in relation to the securities, or derivatives thereof, of persons, firms or entities mentioned in this document and may be represented on

the board of such persons, firms or entities. SG does, from time to time, act as a principal trader in equities or debt securities that may be referred to in this report and may hold equity or debt securities positions or related derivatives. Employees of

SG, or individuals connected to them, may from time to time have a position in or hold any of the investments or related investments mentioned in this document. SG is under no obligation to disclose or take account of this document when advising

or dealing with or on behalf of customers. The views of SG reflected in this document may change without notice. In addition, SG may issue other reports that are inconsistent with, and reach different conclusions from, the information presented in

this report and is under no obligation to ensure that such other reports are brought to the attention of any recipient of this report. To the maximum extent possible at law, SG does not accept any liability whatsoever arising from the use of the

material or information contained herein. This research document is not intended for use by or targeted to retail customers. Should a retail customer obtain a copy of this report he/she should not base his/her investment decisions solely on the basis

of this document and must seek independent financial advice.

The financial instruments discussed in this report may not be suitable for all investors and investors must make their own informed decisions and seek their own advice regarding the appropriateness of investing in financial instruments or

implementing strategies discussed herein. The value of securities and financial instruments is subject to currency exchange rate fluctuation that may have a positive or negative effect on the price of such securities or financial instruments, and

investors in securities such as ADRs effectively assume this risk. SG does not provide any tax advice. Past performance is not necessarily a guide to future performance. Estimates of future performance are based on assumptions that may not be

realized. Investments in general, and derivatives in particular, involve numerous risks, including, among others, market, counterparty default and liquidity risk. Trading in options involves additional risks and is not suitable for all investors. An option

may become worthless by its expiration date, as it is a depreciating asset. Option ownership could result in significant loss or gain, especially for options of unhedged positions. Prior to buying or selling an option, investors must review the

"Characteristics and Risks of Standardized Options" at http://www.optionsclearing.com/about/publications/character-risks.jsp or from your SG representative. Analysis of option trading strategies does not consider the cost of commissions. Supporting

documentation for options trading strategies is available upon request.

IMPORTANT DISCLOSURES

https://www.sgmarkets.com/go/equity/compliance

https://insight.sgmarkets.com/go/compliance/equity

https://insight.sgmarkets.com/go/compliance/credit

http://www.optionsclearing.com/about/publications/character-risks.jsp

https://insight.sgmarkets.com/go/IR?icid=387bf472-8d69-4e7c-b9d6-0f60ed903e2f


APPENDIX - DISCLAIMER

Notice to French Investors: This publication is issued in France by or through Societe Generale ("SG") which is authorised and supervised by the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and regulated by the Autorité des Marchés

Financiers (AMF).

Notice to U.K. Investors: Societe Generale is a French credit institution (bank) authorised by the Autorité de Contrôle Prudentiel (the French Prudential Control Authority) and the Prudential Regulation Authority and subject to limited regulation by

the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority, and regulation by the Financial Conduct Authority are available from us on

request.

Notice to Swiss Investors: This document is provided in Switzerland by or through Societe Generale Paris, Zürich Branch, and is provided only to qualified investors as defined in article 10 of the Swiss Collective Investment Scheme Act (“CISA”)

and related provisions of the Collective Investment Scheme Ordinance and in strict compliance with applicable Swiss law and regulations. The products mentioned in this document may not be suitable for all types of investors. This document is

based on the Directives on the Independence of Financial Research issued by the Swiss Bankers Association (SBA) in January 2008.

Notice to Polish Investors: this document has been issued in Poland by Societe Generale S.A. Oddzial w Polsce (“the Branch”) with its registered office in Warsaw (Poland) at 111 Marszałkowska St. The Branch is supervised by the Polish Financial

Supervision Authority and the French ”Autorité de Contrôle Prudentiel”. This report is addressed to financial institutions only, as defined in the Act on trading in financial instruments. The Branch certifies that this document has been elaborated with

due diligence and care.

Notice to U.S. Investors: For purposes of SEC Rule 15a-6, SG Americas Securities LLC (“SGAS”) takes responsibility for this research report. This report is intended for institutional investors only. Any U.S. person wishing to discuss this report or

effect transactions in any security discussed herein should do so with or through SGAS, a U.S. registered broker-dealer and futures commission merchant (FCM). SGAS is a member of FINRA, NYSE and NFA. Its registered address at 245 Park

Avenue, New York, NY, 10167. (212)-278-6000.

Notice to Canadian Investors: This document is for information purposes only and is intended for use by Permitted Clients, as defined under National Instrument 31-103, Accredited Investors, as defined under National Instrument 45-106, Accredited

Counterparties as defined under the Derivatives Act (Québec) and "Qualified Parties" as defined under the ASC, BCSC, SFSC and NBSC Orders.

Notice to Singapore Investors: This document is provided in Singapore by or through Societe Generale ("SG"), Singapore Branch and is provided only to accredited investors, expert investors and institutional investors, as defined in Section 4A of

the Securities and Futures Act, Cap. 289. Recipients of this document are to contact Société Générale, Singapore Branch in respect of any matters arising from, or in connection with, the document. If you are an accredited investor or expert

investor, please be informed that in SG's dealings with you, SG is relying on the following exemptions to the Financial Advisers Act, Cap. 110 (“FAA”): (1) the exemption in Regulation 33 of the Financial Advisers Regulations (“FAR”), which exempts

SG from complying with Section 25 of the FAA on disclosure of product information to clients; (2) the exemption set out in Regulation 34 of the FAR, which exempts SG from complying with Section 27 of the FAA on recommendations; and (3) the

exemption set out in Regulation 35 of the FAR, which exempts SG from complying with Section 36 of the FAA on disclosure of certain interests in securities.

Notice to Hong Kong Investors: This report is distributed or circulated in Hong Kong only to “professional investors” as defined in the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (“SFO”). Any such professional

investor wishing to discuss this report or take any action in connection with it should contact SG Securities (HK) Limited. This report does not constitute a solicitation or an offer of securities or an invitation to the public within the meaning of the SFO.

Notice to Japanese Investors: This publication is distributed in Japan by Societe Generale Securities Japan Limited, which is regulated by the Financial Services Agency of Japan. This document is intended only for the Specified Investors, as

defined by the Financial Instruments and Exchange Law in Japan and only for those people to whom it is sent directly by Societe Generale Securities Japan Limited, and under no circumstances should it be forwarded to any third party. The products

mentioned in this report may not be eligible for sale in Japan and they may not be suitable for all types of investors.

Notice to Korean Investors: This report is distributed in Korea by SG Securities Korea Co., Ltd which is regulated by the Financial Supervisory Service and the Financial Services Commission.

Notice to Australian Investors: Societe Generale is exempt from the requirement to hold an Australian financial services licence (AFSL) under the Corporations Act 2001 (Cth) in respect of financial services, in reliance on ASIC Class Order 03/824,

a copy of which may be obtained at the web site of the Australian Securities and Investments Commission, http://www.asic.gov.au. The class order exempts financial services providers with a limited connection to Australia from the requirement to

hold an AFSL where they provide financial services only to wholesale clients in Australia on certain conditions. Financial services provided by Societe Generale may be regulated under foreign laws and regulatory requirements, which are different

from the laws applying in Australia.

Notice to Indian Investors: Societe Generale Global Solution Center Pvt. Ltd (SG GSC) is a 100% owned subsidiary of Societe Generale, SA, Paris. Societe Generale SA is authorised and supervised by the Autorité de Contrôle Prudentiel et de

Résolution (ACPR) and regulated by the Autorité des Marchés Financiers (AMF). Analysts employed by SG GSC do not produce research covering securities listed on any stock exchange recognised by the Securities and Exchange Board of India

(SEBI) and is not licensed by either SEBI or the Reserve Bank of India.

http://www.sgcib.com. Copyright: The Societe Generale Group 2018. All rights reserved.

This publication may not be reproduced or redistributed in whole in part without the prior consent of SG or its affiliates.


SG LEADER IN CROSS ASSET RESEARCH

A global footprint

Single names research

Strong expertise in all corporate debt

from IG to HY with highly experienced

team members (# 1 or 2 Euromoney)

A team of 80+ equity sector analysts,

with 20 years of experience on average

Cross Asset Research 2018

#5 Overall Research House

Cross Asset Research

2018

#1 Multi Asset Strategy

#1 Global Strategy

Multi-Asset

Asset Allocation

Technical Analysis

ETF Research

Alternative View

Economics

Europe

Asia

Americas

UK

Fixed Income

Rates & Forex Strategy

Credit Sectors

Credit Strategy

EM Strategy

Quantitative

Cross Asset Quant

Equity Index

Equity Quant

Commodities

Strategy

Agricultural

Metals

Oil & Products

Equity

Sector Research

Thematic and SRI

Equity Derivatives

Equity Strategy

2018

#6 Global Economics

2018

#7 Equity Sectors Research

9 Sectors in the top 5

17 Sectors in the top 10

2018

#1 Quantitative/ Database Analysis

#1 Index Analysis

#2 Overall Credit Research

#2 Overall Trade Ideas

Best Overall Commodity Research


EquityCommodities

Fixed IncomeMacro & Strategy

SG LEADER IN GLOBAL CROSS ASSET RESEARCH

2018

#1 Multi Asset Research

#1 Global Strategy

#1 Quantitative/Database Analysis

#1 Index Analysis

#2 Overall Credit Strategy

#2 Overall Trade Ideas

#1 Non-Bank Financial Institutions / #1 TMT

#1 General Industries / #1 Corporate Hybrid Bonds

2018

#1 Best Overall Commodity Research

#1 Research in Base Metals

#1 Research in European Oil & North America Oil

#1 Research in North American Natural Gas

#1 Research in Soft Commodities

#1 Research in Precious Metals

#7 Equity Sector Research

9 sector teams in the Top 5

17 sector teams in the Top 10

The Lyxor

Robotics & AI

ETF

35

October 29, 2018

Introducing a new industry classificationHow we define the starting universe

Industrials

Aerospace & Defence,

Electrical Equipment,

Industrial

Conglomerates,

Machinery

3 main sectors

~1,400 companies

identified*

Information

Technology

Healthcare

Healthcare Equipment

& Supplies,

Life Sciences Tools

& Services

*As at December 2017.

Starting

universe

210 stocks*

Big data analysis

Scans for most relevant

companies

(188) e.g.

Amazon,

Schlumberger,

J.P. Morgan…

Exceptions from other

sectors added

Human touch

Annual quality control by

SG Thematic Research

and renowned futurist and

AI specialist, Martin Ford

(22)

Societe Generale’s classification of

Robotics & AI companies uniquely

recognises the broader impact of AI on

business and consumers

36

October 29, 2018

The Rise of the Robots IndexHow the index works


R&D

expenditure

on net sales

Return on

invested

capital

3-year

sales

growth

ADV filter

► Stocks weighted

according to their

Z-scores

► Rules-based and

process-driven

► Rebalanced quarterly,

reviewed annually

Systematic approach, with

stocks scored for…Starting universe

210 stocks*Rise of the

Robots Index

Top 150 stocks

Z-scoring

37

October 29, 2018

More emphasis on AI than other like-for-like ETFsThe right balance could help future-proof your portfolio

Source for all data: Lyxor International Asset Management, as at 20/06/2018.

The Rise of the Robots Index

contains…

...giving you more access to the

megatrend and its

effects than other

like-for-like products

…& their

beneficiaries

Robotics

developers &

manufacturers

AI-focused

companies,

► In our view, a well-balanced exposure to robotics and AI can help future-proof

your portfolio because the application of AI offers greater return potential than

traditional robotics alone

► Our index is weighted more towards AI leaders (notably in the US and China) and

less towards robotics manufacturers (Japan and South Korea) than other like-for-

like products

► But we don’t ignore the benefits of robotics. After all, it is still a key growth engine

Geographical breakdown

38

October 29, 2018

More capable of capturing the impact of changeOur greater diversification takes you further than like-for-like products

Source for all data: Lyxor International Asset Management. Data as at 20/06/2018. The two peer indices

chosen are based on similar robotics and automation ETFs available in Europe

► More stocks : We hold at least half as many stocks again as our major peers.

We won’t hold more as it risks diluting the theme

► More appropriately diverse: We capture AI’s spread beyond Industrials & IT,

but we don’t ignore the benefits & growth prospects of hardware

► More flexible: We add retail titans like Amazon or Alibaba to capture AI’s

impact on consumers, making this product unique

Rise of the Robots Index

(BBG ticker: SGIXROBO)

iSTOXX FactSet Automation & Robotics Index

(BBG ticker: IXAROBU)

ROBO Global Robotics and Automation UCITS Index

(BBG ticker: ROBOT)

# stocks 150 102 87

% large caps 48.25% 26.79% 24.95%

% mid caps 26.83% 42.62% 29.52%

% small caps 24.93% 30.09% 45.11%

Of the 225 stocks found across the three like-for-like indices, 64 are unique to

the Rise of the Robots Index

Sector breakdown

39

October 29, 2018

Why choose Lyxor for Robotics & AI?3 reasons to buy

1Source: Lyxor International Asset Management, as at 02/10/2018.

More likely

to evolve

Industry expertise ensures our

ETF won’t get left behind

More capable of capturing

change

We look for the best AI stories,

but we don’t ignore hardware

UCITS ETF Bloomberg tickers Trading currencies Replication type AuM1 TER1

Lyxor Robotics & AI ROAI GY, ROAI IM, ROAI LN EUR, USD Synthetic €51m 0.40%

Better

balanced

The blend of robotics and AI helps

future-proof your portfolio

40

October 29, 2018

Important informationDisclaimer


This communication is exclusively directed and available to Institutional Investors as defined by the 2004/39/EC Directive

on markets in financial instruments acting for their own account and categorised as eligible counterparties or professional

clients. This communication is not directed at retail clients. This document is issued by Lyxor International Asset

Management.

Some of the funds described in this brochure are sub-funds of either Multi Units Luxembourg or Lyxor Index Fund, being

both investment companies with Variable Capital (SICAV) incorporated under Luxembourg Law, listed on the official list of

Undertakings for Collective Investment, and have been approved and authorised by the CSSF under Part I of the

Luxembourg Law of 17th December 2010 (the “2010 Law”) on Undertakings for Collective Investment in accordance with

provisions of the Directive 2009/65/EC (the “2009 Directive”) and subject to the supervision of the Commission de

Surveillance du Secteur Financier (CSSF). Alternatively, some of the funds described in this document are either (i) French

FCPs (fonds commun de placement) or (ii) sub-funds of Multi Units France a French SICAV, both the French FCPs and

sub-funds of Multi Units France are incorporated under the French Law and approved by the French Autorité des marchés

financiers. Each fund complies with the UCITS Directive (2009/65/CE), and has been approved by the French Autorité des

marchés financiers.

Société Générale and Lyxor AM recommend that investors read carefully the “risk factors” section of the product’s

prospectus and Key Investor Information Document (KIID). The prospectus and the KIID are available in French on the

website of the AMF(www.amf-france.org). The prospectus in English and the KIID in the relevant local language (for all the

countries referred to, in this document as a country in which a public offer of the product is authorised) are available free of

charge on lyxoretf. com or upon request to client-services-etf@ lyxor.com. The products are the object of market-making

contracts, the purpose of which is to ensure the liquidity of the products on NYSE Euronext Paris, Deutsche Boerse (Xetra)

and the London Stock Exchange, assuming normal market conditions and normally functioning computer systems. Units of

a specific UCITS ETF managed by an asset manager and purchased on the secondary market cannot usually be sold

directly back to the asset manager itself. Investors must buy and sell units on a secondary market with the assistance of an

intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net

asset value when buying units and may receive less than the current net asset value when selling them.Updated

composition of the product’s investment portfolio is available on www. lyxoretf.com. In addition, the indicative net asset

value is published on the Reuters and Bloomberg pages of the product, and might also be mentioned on the websites of

the stock exchanges where the product is listed. Prior to investing in the product, investors should seek independent

financial, tax, accounting and legal advice.It is each investor’s responsibility to ascertain that it is authorised to subscribe, or

invest into this product. This document together with the prospectus and/or more generally any information or documents

with respect to or in connection with the Fund does not constitute an offer for sale or solicitation of an offer for sale in any

jurisdiction (i) in which such offer or solicitation is not authorized, (ii) in which the person making such offer or solicitation is

not qualified to do so, or (iii) to any person to whom it is unlawful to make such offer or solicitation. In addition, the shares

are not registered under the U.S Securities Act of 1933 and may not be directly or indirectly offered or sold in the United

States (including its territories or possessions) or to or for the benefit of a U.S Person (being a “United State Person” within

the meaning of Regulation S under the Securities Act of 1933 of the United States, as amended,and/or any person not

included in the definition of “Non-United States Person” within the meaning of Section 4.7 (a) (1) (iv) of the rules of the U.S.

Commodity Futures Trading Commission.). No U.S federal or state securities commission has reviewed or approved this

document and more generally any documents with respect to or in connection with the fund. Any representation to the

contrary is a criminal offence. This document is of a commercial nature and not of a regulatory nature. This document does

not constitute an offer, or an invitation to make an offer, from Société Générale, Lyxor Asset Management (together with its

affiliates, Lyxor AM) or any of their respective subsidiaries to purchase or sell the product referred to herein.These funds

include a risk of capital loss. The redemption value of this fund may be less than the amount initially invested. The value of

this fund can go down as well as up and the return upon the investment will therefore necessarily be variable. In a worst

case scenario, investors could sustain the loss of their entire investment. This document is confidential and may be neither

communicated to any third party (with the exception of external advisors on the condition that they themselves respect this

confidentiality undertaking) nor copied in whole or in part, without the prior written consent of Lyxor AM or Société

Générale. The obtaining of the tax advantages or treatments defined in this document (as the case may be) depends on

each investor’s particular tax status,the jurisdiction from which it invests as well as applicable laws. This tax treatment can

be modified at any time. We recommend to investors who wish to obtain further information on their tax status that they

seek assistance from their tax advisor. The attention of the investor is drawn to the fact that the net asset value stated in

this document (as the case may be) cannot be used as a basis for subscriptions and/or redemptions.The market

information displayed in this document is based on data at a given moment and may change from time to time.

Authorizations: Lyxor International Asset Management (Lyxor AM) is a French management company authorized by the

Autorité des marchés financiers and placed under the regulations of the UCITS (2009/65/EC) and AIFM (2011/61/EU)

Directives.Société Générale is a French credit institution (bank) authorised by the Autorité de contrôle prudentiel et de

résolution (the French Prudential Control Authority.

Document title

Fragen?

innovation day - lyxor etf · martin ford, author “rise of the robots: technology and the threat...

Documents