"Nearly every management team I've recently met has highlighted their company's digital and services capabilities, which to me speaks to the vitality of the industrial internet of things (IIoT) as an important driver of the industrials sector that isn't going away, regardless of market direction," says Janet Glazer, portfolio manager of Fidelity® Select Industrials Portfolio (FCYIX).
Following are Glazer's 5 things to know about the industrial internet of things:
- IIoT involves networking industrial devices to enable systems that can monitor, collect, exchange, and analyze data like never before, delivering valuable new insights in the process, according to Glazer.
- It's not far into the future. In fact, it is here today: Glazer says many industrial companies are already involved in IIoT, such as artificial intelligence, and she expects this to accelerate in the near and long term.
- Despite these changes, data security is an acute concern, she says, especially as the number of connected devices increases and network infrastructure grows.
- Progress on the IIoT front could accelerate in coming years, due to 5G wireless networks.
- Industrial companies making early moves to take advantage of opportunities with IIoT could generate meaningful economic value for customers, in Glazer's view.
As of February 29, the fund held several companies employing IIoT initiatives, including Roper Technologies (ROP), Honeywell (HON), Fortive (FTV), AMETEK (AME), and Xylem (XYL).
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As of this date, Roper Technologies composed 7.90% of fund assets; Honeywell composed 5.37% of fund assets; Fortive composed 5.37% of fund assets; AMETEK composed 5.95% of fund assets; and Xylem composed 0.57% of fund assets.
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