What is the Evolving Economy?
Companies are growing ever more global and multi-sector in their approach, but many investors’ approach to equities remains the same. We’ve identified five themes that we believe will shape the way companies operate in future, which will also have a radical impact on equity investors: automation, the connected consumer, ageing and lifestyle, cleantech, and transitioning societies. We call these themes the Evolving Economy.
What is thematic investing?
Thematic investing – often called trend investing or mega-trend investing – is a broad term used to describe investment approaches which focus on certain economic, corporate, social, or technological themes. In today’s highly disruptive world, these themes are typically focussed around the main two drivers of long-term corporate behaviour – demographic shifts and technological changes.
The five evolving economy themes we have identified are the results of long-term demographic trends and technological developments. We believe they can offer equity investors access to the best opportunities for long-term structural growth, regardless of how companies are defined geographically or from a sector perspective.
Does thematic investing work?
We believe that geographic or investment sector definitions – which were once a convenient way for investors to classify companies and decide asset allocations – must evolve to meet the reality that the world is increasingly complicated and connected than ever before.
Is thematic investing a long-term approach?
We believe that thematic investing is a long term and a rational rather than fashionable approach.
While many individual themes or trends can capture investors’ attention, we believe it’s important to take a nuanced and diversified approach.
To help people invest in the companies that are embracing these changes, we have adapted our internal research capabilities to incorporate the five main trends that we believe represent the future for long-term fundamental growth investing.
Ageing and lifestyle
The number of over-60s 1 is expected to triple in size between 2000 and 2050, creating challenges for companies and individuals.
Only 18%2 of global retail sales are transacted online, which will likely increase as smartphone adoption rises globally.
Forecast to grow 10-15% annually until 2025 3, the robotics industry is rapidly changing how we live and work.
Innovative companies are creating solutions to address pressures on scarce natural resources and the need for greenhouse gas emission reduction.
The growth of the global middle class is at a 150-year high4, boosting consumption in Asia and in the developing world.
Discover a single point of access to the five major long-term growth themes we have identified in the evolving economy.
No assurance can be given that our equity strategies will be successful. Investors can lose some or all of their capital invested. Our strategies are subject to risks including counterparty risk, credit risk, geopolitical risk, liquidity risk, and the impact of any techniques such as derivatives.