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Pro Analysis

President Trump is not going to like what's behind this winning trade since the election

Artificial intelligence robots
iLexx | Getty Images

One of the best performing trades since the election of Donald Trump is an exchange-traded fund that capitalizes on the further destruction of the depleted manufacturing workforce that helped elect him.

In what has to be one of the more counterintuitive bets that have worked since the election, the ROBO Global Robotics and Automation Index ETF is up 16 percent since the businessman spouting protectionist policies was swept into power, much better than the 10 percent return of the S&P 500 (returns through Tuesday's close).

So what gives?

Jack Ablin, the astute chief investment officer at BMO Private Bank, notes the following in his latest outlook missive to clients:

"President Trump's pledge to bring America's jobs back home may carry an interesting side effect, the rise of robotics. A U.S. corporate tax rate cut, should it come to pass, would reduce the cost of doing business in the United States, but it would do nothing to curtail labor costs giving U.S. employers increased incentive to invest in labor-saving technology. Allowing accelerated depreciation on capital investments, as he's proposed, would only serve further push business leaders toward robots."


It makes sense. Trump strong-arms companies to keep factories open at home so they agree and get the friendly "Made in America" press coverage, but meanwhile they aggressively invest in automation to lower costs of operating the plant. United Technologies is basically doing that with the Carrier factory it was pressured to keep in Indiana by the president.

This automation boom is not a long-term thing either. Check out the expected surge in robot usage expected in the next two years: