Check out what’s happening in the world this week, plus what it means for you and your investments. (4:14 min read)

This information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.

 

1. Google launches Duplex

Google debuted their latest digital assistant innovation at the company’s annual developer conference Google I/O.

CEO Sundar Pichai showcased Duplex, an extension of the existing Assistant technology, which can carry out phone conversations with humans.

Duplex can initiate and conduct a conversation without the person on the other end realising they’re talking to a robot – it pauses, speaks, and interacts like a human.

What does this mean if you are invested in Alphabet (Google’s parent company)?

Google, Apple and Amazon are all investing heavily in developing and rolling out their digital assistants to as many users as possible, as they see AI-powered voice assistants as the next major battleground since the smartphone.

If Duplex is anything to go by, Google appears to be leading the AI race.

However, Amazon remains a strong competitor in the digital assistance space given their digital assistant Alexa can help users shop online without lifting a finger.

What does this mean if you’ve invested money with AtlasTrend?

We believe AI voice technology has a high growth potential going forward. The technology is just scratching the surface of what is possible from a consumer and business user perspective.

However, companies like Google will have to tread carefully in relation to the ethics of voice technology. There are already suggestions some people are against digital assistants pretending to be human because it blurs the line between human and non-human interactions.

Google has since said transparency of this technology is important, and will ensure their artificially intelligent voice assistant is appropriately identified when conducing conversations.

 

2. AMP in your investment portfolio

If you are invested in an Australian passive index fund that tracks the S&P/ASX 200 stock market index, chances are some of your hard-earned money is exposed to AMP and the other big banks.

In case you missed it, AMP has been at the centre of Royal Commission revelations regarding financial practices among Australia’s biggest financial institutions.

Will my passive Australian S&P/ASX 200 index fund investment continue investing in AMP?

In short, yes. Despite astonishing revelations of highly unethical behaviour by AMP, passive index funds typically cannot all sell their AMP shares.

The only factor that determines whether a passive index fund tracking the S&P/ASX 200 will invest in or divest from the company, is whether AMP is one of the largest 200 listed companies in Australia.

For now, AMP remain among the top 200.

The fact AMP’s share price has fallen dramatically since the Royal Commission findings, or whether or not you’re comfortable having your money invested in companies that don’t align with your beliefs has no impact on a passive index funds’ decision to remain invested in AMP shares.

 

What does this mean if you’ve invested money with AtlasTrend?

We are active investment managers with a focus on developed stock exchanges outside of Australia. Therefore, our managed funds do not own any AMP shares, or shares in any Australian banks for that matter.

We believe a situation like AMP reiterates the value of active management in an investment portfolio.

Smart, active fund managers would have sold some or all their AMP shares already since it is highly probable AMP faces years of litigation, much tougher government regulations, and an uphill battle to rebuild customer trust.

 

3. Netflix’s clever content

Netflix is watching you while you are watching it. The streaming service cleverly utilises data to not only improve the watching experience, but determine what content to produce and whether it will be a hit.

The company’s Chief Content Officer spoke to the platforms predictive capabilities:

“In addition to predicting what types of audiences are most likely to watch and enjoy particular shows, we can also broadly forecast how popular a film or series will be.”

What does this mean if you’re invested in Netflix?

Netflix has been a good investment over the past few years, with the share price doubling in the last 12 months alone.

It has been driven by a growing subscriber base and subscription price increases.

An important factor to keep this growth up is producing original content that more people want to watch. In this respect, the company’s clever use of data to track what and how users watch Netflix shows is becoming a major asset for the company.

What does this mean if you’ve invested money with AtlasTrend?

None of AtlasTrend’s managed funds are currently invested in Netflix shares.

While we believe Netflix has done a good job building its subscriber base, it is a very expensive business to run. In particular, creating and buying new content for the platform costs billions of dollars a year.

The key concern we have is Netflix may take quite a number of years before it can start generating material positive cash flow for the company and shareholders.

 

  

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About Kent Kwan

Kent Kwan is a Co-Founder of AtlasTrend, an online investment platform that makes it easy for anyone to learn and invest in trends transforming our world. Kent has over 15 years experience in financial markets including as Chief Investment Officer at Arowana International Limited, and roles at JP Morgan and Macquarie.