Thematic Compass: 7 Themes for the future of investing
Tuesday 24 May 2022
We are increasingly convinced that a valuable investment strategy should combine a traditional selection of assets with an approach that takes into consideration long-term “real life” structural changes. Despite the events of the last two years, there are key trends, or key themes, which are either emerging or which have been exacerbated by the pandemic or geopolitical tensions. In particular, there are 7 macrotrends that we believe are paramount in our investment choices.
Macrotrend focus: What are we expecting going forward?
1. A new reflation era is emerging through a combination of rising inflation, an increase in commodity prices, and a hawkish stance from central banks – or rather, monetary policy normalisation.
Its microtrends: GROWING DIVIDENDS - RAISING RATES - COMMODITIES ROAR
2. Technological innovation, deals with the development of technologies in past decades (digitalisation and robotics above all), introducing the new key element of artificial intelligence (AI) and the Metaverse.
Its microtrends: SMART MANUFACTURING - SOFTWARIZATION / CYBERSECURITY - E-COMMERCE - SEMICONDUCTORS CRUCIALITY - METAVERSE
3. Geopolitics sees the ongoing rise of Asian countries to the top of the world league of developed economies, with China leading the way, and the effort by European countries to push ahead with continental integration. In the last few decades, supply chains have globalised with manufacturing offshored. The disruption from the pandemic and geopolitics could bring some capacity back onshore, particularly with the conflict in Ukraine exacerbating supply chain disruption and making companies and governments even more focused on resilience, which could potentially accelerate near-shoring tendencies.
Its microtrends: NEW CONSUMER TRENDS - DE-GLOBALISATION
4. Equality, for which we see growing pressures as a trend closely linked to a new sensitivity to environmental, social and governance (ESG) issues.
Its microtrends: INCLUSION / GENDER EQUALITY - EDUCATION
5. Climate Change, a trend getting increasing attention as closely linked to a new sensitivity to environmental, social and governance (ESG) issues.
Its microtrends: CLEAN ENERGY - AGRICULTURAL INNOVATION - ENERGETIC TRANSITION – CIRCULAR ECONOMY – RENEWABLE ENERGY
6. Infrastructure 2.0, the integration of digital, green and traditional infrastructure into the so called “Infrastructure 2.0” is acting as a powerful booster for public and private investment by providing for smart cities and creating new ways of living and working.
Its microtrends: GLOBAL LOGISTICS - FUTURE MOBILITY - SMART CITIES
7. Healthy lifestyles, primarily associated with a better work-life balance, higher life expectancy, and changing consumer needs.
Its microtrends: HEALTH CARE INNOVATION - NUTRITION - SILVER ECONOMY
To discover more about each macro and microtrend, we invite you to take a closer look and deep dive into our new “Thematic Compass” publication.