Lead-Lag Live
Lead-Lag Live is your front-row seat to unscripted, real-time conversations with the sharpest minds in finance, economics, and investing.
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Lead-Lag Live
Hype vs Deployment: Derek Yan on Humanoid Robotics, KOID ETF, and the Global AI Arms Race
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In this episode of Lead-Lag Live, I sit down with Derek Yan, Senior Investment Strategist at KraneShares, to discuss whether humanoid robotics is a real commercialization story or just the next overhyped thematic trade.
From factory deployment by Tesla, BMW, and Amazon to China’s aggressive industrial push, Yan explains why embodied AI may represent the next structural shift in automation — and how the KraneShares Global Humanoid and Embodied Intelligence ETF $KOID captures the full ecosystem beyond mega-cap names like Nvidia and Tesla.
In this episode:
– Why humanoid robotics is already entering commercialization
– How equal weighting avoids mega-cap concentration
– What Morgan Stanley’s trillion-dollar projections really mean
– Why China exposure is a feature, not a bug
– The key milestones that signal mass deployment is coming
Lead-Lag Live brings you inside conversations with the financial thinkers who shape markets. Subscribe for interviews that go deeper than the noise.
#HumanoidRobotics #EmbodiedAI #ArtificialIntelligence #ThematicInvesting #EmergingTech #ETF
Setting The Humanoid Stage
SPEAKER_01I think one, um, the holdings in COID is not actually listed in the US, it's mostly listed in Hong Kong or mainland China. So there's uh less delisting risk compared to other ADRs. Um, second, uh, I think like ignoring China is more at risk uh uh in the humanoid space, right? If think about like China uh is probably um the biggest one of the biggest markets for humanoid deployment uh uh uh together with US. You think like US is really good at the AI, the models, the brain technologies, right? SAMEs, but China is really good at making uh very cost-efficient um manufacturing, uh especially around robotics.
SPEAKER_00So it's my birthday, and this year I'm celebrating by giving a special gift away to one of you. And to officially wish a happy my birthday to you, I've had this tote with a few surprises from our signature True merch portfolio. And it's not just random merch. Inside, you'll find some items that really at least signal you know exactly what you're doing in these markets. And the tote, well, it won't hedge your portfolio, but it will make you look smarter than anyone pretending they know what risk on means at the grocery store. If you want it, here's what you need to do. Follow Lead Leg Report on X, follow Mela underscore Schaefer on X, subscribe to Lead Leg Media on YouTube, and like and share this video. Only one person gets the toe, but since everyone gets our content, it's really a happy my birthday to all of you. I'm your host, Melanie Schaefer. Welcome to Lead Leg Live.
Why Humanoids Aren’t Just Hype
SPEAKER_00Now, today we're talking humanoid robotics, and the headlines have gotten a lot more real lately. In the last week alone, routers highlighted how Chinese humanoid robot makers are using the Lunar New Year programming to showcase scale and capability. And the Wall Street Journal detailed how aggressively China is funding and industrializing humanoid robots to compete globally. My guest today is Derek Yan, senior investment strategist at Crane
Birthday Giveaway And Housekeeping
SPEAKER_00Shares. Derek, it's always great to have you here.
SPEAKER_01Thank you for having me. Good to see you again.
SPEAKER_00So, to get right into it, the humanoid robotics theme is generating a lot of excitement. But I mean, but advisors have seen thematic ETFs launch at the peak before. Clean energy in 2021, metaverse in 2022. What makes you confident that iHumanoids aren't just the next overhyped theme and that and that COID, that K-O-I-D, isn't arriving too early or even too late?
SPEAKER_01Yeah, I think like that's like fair hesitate by advisors who've been investing to some hypers before, right? Like think about like either clean tech, but like uh I think more metaverse is really something never happened or just happened a little bit. Um I think it's different for humanoid because one, you see like so many companies start to deploy in the real factories like Tesla using it for um this like auto factories, you have like Benz, you have BMW, uh you have like Amazon using in the logistics. So all those companies are showing this technology is more than just like technology, is actually starting in the commercialization phase. So once those revenue generating uh become like scalable, um, this is gonna become uh a thematic. I think like investors start to recognize. So investing in the humanoid industry right now is actually quite early, um, but it's good because um usually when the investor, uh the main audience of the Wall Street recognized the theme, it's already like went up a lot. Um uh and I think like compared to just like metaverse, right? Think about like persuading people to put like metaverse headset, you don't need to really persuade a lot of factory or enterprise owners um to buy humanoid because like there's constant labor shortage, you you've interviewed a lot of like business owners, that's the issue for decades. And if humanoid can solve this problem, I think that's where it's sustainable uh structural change for a lot of factories and a lot of enterprises.
Equal Weighting The Humanoid Ecosystem
SPEAKER_00Talking Derek about the strategy, uh quite uses an equal weight method methodology across about 50 holdings rather than being market cap weighted. Can you walk us through why that matters for advisors? What does equal weighting capture in this space that a cap weighted approach would probably miss?
SPEAKER_01Yeah, when we look at a portfolio, right? Like, so there's think about like ecosystem or humanoid, there's like brains. Um brain means like AI companies or semiconductor companies. Um that's like trillion dollar, right? Like, like those are like huge market cap. Um if you just do um market cap weighted, you're gonna be dominated by those players, right? Like I think like for investors today or the financial advisors for their clients, uh like Nvidia or Tesla is already heavily owned by a lot of investors. Um, so we don't want that, right? We don't want like not a fund just like being overly weighted to the AI and the semis. So that's why EcoWay to give you more diversified approach towards the other component of the ecosystem, uh, like the body, right? The the actuators, um, the sensors like can make the robot see to fill. Uh actuators make the robot move, and you have the rare earths, you have a lot of like components. That's really critical for the manufacturing, for the whole supply chain of humanoid. Uh, and you have integrators who assemble and deploy um the humanoid um that's really competing with the like Teslas globally, right? So when you have a theme that's happening outside of the US as well, in China, in Japan, in Europe, you want an eco-weighted and global diversified basket that actually is very good for photo construction.
Sizing The Opportunity And Milestones
SPEAKER_00Yeah. And so talking about all the critical things that go into the production of just one uh humanoid, Morgan Staley is projecting another billion, there'll be a billion humanoids and five trillion in revenue by 2050. And I think Goldman sees a 40% um kegger over the next decade. Those are staggering numbers, Derek. How should advisors think about those projections when setting client expectations and what has to go right in order for that uh forecast to play out?
SPEAKER_01Yeah, those forecasts and projections definitely were exciting. Those are big numbers. But I think for uh like investors, they should see that more as directional. Um the directional is really uh like a mega trend, right? So uh you you you have you can be five trillion or you can be eight trillion or it can be three trillion, but like just think about now, that market is it doesn't exist. So it's growing from zero to one to something, uh even say very conservatively, uh the market is like $500 billion. Well, that's a huge market, right? If you think about it by by the time like Morris Danny projected, like it can be much bigger compared to the auto industry, right? If you have an industry that's going from zero to bigger than the auto industry, I don't know how many companies are gonna make um a lot of like revenue and earnings from this mega trend. So for that directional trend to happen, I think now we're in the early stage, right? Technology is really breaking through. You have AI foundational models making the robotics uh getting smarter every day. And you have like commercialization by like older companies, by like a lot of big tech companies, logistic companies, and that trend is accelerating, right? So we're gonna we have, as you said, you have government, you have big companies supporting this, you have news, you have announcements every day. I think um just monitor that trend, and you have um seeing a lot of um um kind of like companies give a big milestone. Um, that's kind of like the thing people one should watch uh as the humanoid industry continue to evolve.
SPEAKER_00Yeah, and I mean uh what what you're speaking about is sort of a global uh movement, and and Kuwait has significant exposure to Chinese companies alongside US and Japanese
China’s Role And Risk Framing
SPEAKER_00names. But for advisors whose clients may have concerns about a China risk, I mean, regulatory geopolitical delisting, even how do you make the case that China exposure is a feature and and not a bug, especially in this uh particular theme?
SPEAKER_01Yeah, I think that's a fair uh concern. Uh, as like there's a lot of like geopolitical risk right now, right? So I think one, um, the holdings in COID is not actually listed in the US, is mostly listing Hong Kong or mainland China. So there's uh less listing risk compared to other ADRs. Um second, uh I think like ignoring China is more at risk at uh in the humanoid space, right? If think about like China uh is probably um the the biggest, one of the biggest uh hum markets for humanoid deployment uh uh uh together with US. If you think of like US is really good at the AI, the models, the brain technologies, right, SAMEs. But China is really good at making uh very cost-efficient um manufacturing, uh especially around robotics. So um you have like a lot of Chinese uh humanoid uh unit like IPO coming, I think this year, like uh talking about like Unitree, the AGI bot, the Gal bot. Um that way for IPO create creates some opportunity for investors as well. So ignoring China in the humanoids like ignoring China in the like clean tech back in like say uh years ago, right? Like if if you miss the China like boom in the in the cleantech space, um you kind of like missed a big part of the the ecosystem. So adding China um to the portfolio is kind of like a must. Um but China's exposure is also managed. Um think about like adding like 30% uh exposure to China uh in uh in a uh global portfolio, uh, is where like if you think about sizing the COID as a like a satellite allocation or just like a 5% allocation in your portfolio, that's something is very manageable, I think, for the client what it is take.
SPEAKER_00Yeah, and I think even with single stocks advisors know that there's China risk involved in anything to do with tech. And as you mentioned, uh the analogy with clean tech
Beyond Nvidia And Tesla Exposure
SPEAKER_00in the past. But Derek, for an advisor listening, you know, carrying on with this idea right now, that probably already owns in NVIDIA and Tesla in client portfolios, what does COID give them that they don't already have through those megacap positions? And I guess what I want to know is how do you think about overlap versus additive exposure?
SPEAKER_01Yeah, so I think that's a good question because first, um, we acknowledge that like um like the clients is, oh, I already own this theme, right? Like humanoid, I own like Tesla, I know, and video, and video is the platform for the model training. Tesla is uh like doing the optimus. But I think like what's important to acknowledge that is you're missing out at the whole ecosystem. As I said, the brain, there's more like uh like AI technology, there's more models, there's more like semiconductors involved in the ecosystem. Then uh more importantly, I think the body, the body is important. Like, for example, like the harmonic drive, they're doing the precision gears that all the humanoid companies can need, right? Whether it's in the US, in the China, in Japan, like if we don't know who's gonna be the winner, right? Like it's hard to say Tesla is gonna be the humanoid company that every every country can, every factory can use. Uh, it's hard to say that. Um, there's other integrators, right? In say Unitry AGI bot or in China, or there's like um uh other companies like uh in in Japan or like in Europe, in in South Korea. There's so many players out there that they're gonna require a lot of components in actuators, in rare earth, in those materials. So I think like those pick and showers uh is likely to be the winner at this stage when there's so many brands and like integrators competing, right? So you want to own the ecosystem, uh not just owning two companies that's getting you a little exposure. Um, so adding a coid um the as an allocation to the portfolio is adding the exposure to the whole ecosystem and make the humanoid theme more meaningful in investors' portfolio.
SPEAKER_00Yeah, I mean that's that's the beauty of owning an ETF and as well as owning uh single stocks perhaps above that. And that's what I wanted to ask you about next.
Portfolio Fit And Position Sizing
SPEAKER_00Uh, Derek, where does COID fit in the portfolio construction conversation? Is this a core holding? It should it be a satellite position, a replacement for an existing robotics or AI allocation? And and what what do you think about sizing?
SPEAKER_01Yeah, I think like it really depends on um the investor. If the investors really just want to do some like exploratory like allocation, um, it could be just like uh one to two percent like satellite. Um that's kind of like um you give like a little bit like taste, uh like you have some minimal impact on the portfolio if the the humanoid industry really uh delivers like very strong offer uh in the long term. Um but I think for like usually investors who already have a thematic exposure to other robotics or AI or other like um high convection themes, um, this is could be like uh the coi can be like 3 to 5% allocation, um, can be a real placement to other robotics because I think a lot of the traditional robotic ETF, they focus on the in like, you know, traditional industrial automation, industrial arms. Um, those kind of like themes have been really matured and really slowing down, where the humanoid and the embodied AI or the physical AI is really taking off at the next stage of the robotic and automation uh growth. So replacing those robotics were like the AI exposure to really broadening the allocation uh towards the physical AI uh makes a lot of sense for investors.
SPEAKER_00Yeah, and Derek, I mean, you mentioned uh the stages that we're in, and we we talked about you know projections to 2050. Say we're sitting here a year from now,
What To Watch Next And Risks
SPEAKER_00what milestones, uh, commercial deployments, revenue inflections, policy developments, et cetera, would you tell the humanoid thesis is tracking ahead of schedule? And and what would be the warning signs that maybe uh a timeline is slipping?
SPEAKER_01Yeah, I think like a lot of factories and a lot of like business, they are testing and deploying the humanoid in in their like a production line or like doing logistics or like sampling, or like I think like there's a company doing the home humanoid, right? Like putting, I think they're testing the humanoid in your home. Um so a lot of those milestones are like should worth like watching because um I I think according to a lot of like business owners, uh the performance of humanoid uh in some cases is like 98% good. Like if you have 98% good, um, they're just waiting for that 1% gain. Um that that like when it's 99% good, like then they can start a mass deployment. So when do you have like mass deployment? I think that's a very strong signal for this industry to take off. Uh, if you have like, say, um a humanoid company, whether it's Tesla uh uh announced or like uh other brands announced, they're gonna be like thousands unit production delivery or like 10,000, that's kind of like a big milestone. I think like that's very key milestones investors should keep watching because when you have like thousands or ten thousand units delivered every year, that means the economic or the ROI is real. That the business owner, the buyers really want those humanoids to be in their factory or be in their hotels or in their homes. So I think that's something definitely uh is a key, key milestone to watch. Um, but if they say, oh, it's like if they plan to deliver, but like what if like, oh, there's some like delay um because of say uh humanoid just like um uh hurt a person, right? Say like uh in in a factory, like then there's regulatory risk where that could be like something I think like could slow down things a little bit because you do have like some, this is something totally new, right? We haven't we don't have like a like a like our co-worker to be like a robot
Where To Learn More And Closing
SPEAKER_01before, right? So if you have that, you have to have to think about like what's the regulatory, the risk and all the insurance and everything like to be ready. This is very similar to like Thomas driving in a way, just like um you have the technology that's ready, that's coming, or like just on the road, then like you have to figure out the regulations on this. So uh it could be like a little bit back and forth, but um, I think like even the just like seeing the robot in the factory in a home can be exciting for a lot of investors.
SPEAKER_00Yeah, it's it's impossible almost for me to imagine what it's going to be like when all of this comes to fruition. I remember uh the pictures of uh when crane shears had the robot um in New York City. But Derek, just before we wrap up, for anyone watching who wants to learn more about COID and read your research on humanoid robotics and embodied AI, where's the best place for them to go?
SPEAKER_01Yeah, Investor can go to Crane Shears.com uh for information. Uh we write a lot of articles on the humanoid, on the AI, on the emerging technologies. Uh specifically for COID, uh, investor can go to Cranshares.com slash uh K O I D uh for the following information or just articles we wrote about humanoid space. Yeah, so like we did a bear rating on Nasdaq, and um there's we actually did another bear rating with the humanoid uh in London stocks exchanged. Um so it's like really seeing the robot ring the bell and that's like another milestone for the financial industry. Uh, we could see like uh, I don't know, a financial analyst like as the humanoid um soon. Uh hopefully my job's gonna secure it.
SPEAKER_00It's fantastic. Well, Derek, as always, thank you so much for joining me today, and thanks to everyone for watching. Be sure to like, share, and subscribe for more episodes of Lead Leg Live.
