Thematic Equities
The evolving economy is all about identifying companies that are tapping into multi-decade demographic and technological changes, regardless of their region or sector classifications.
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.
Connected consumer
Only 18%2 of global retail sales are transacted online, which will likely increase as smartphone adoption rises globally.
Automation
Forecast to grow 10-15% annually until 2025 3, the robotics industry is rapidly changing how we live and work.
Clean Tech
Innovative companies are creating solutions to address pressures on scarce natural resources and the need for greenhouse gas emission reduction.
Transitioning societies
The growth of the global middle class is at a 150-year high4, boosting consumption in Asia and in the developing world.
Evolving trends
Discover a single point of access to the five major long-term growth themes we have identified in the evolving economy.
Risks
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.
Disclaimer
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This page is for informational purposes only and does not constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services and should not be considered as a solicitation or as investment, legal or tax advice. The strategies discussed herein may not be available in all jurisdictions and/or to certain types of investors. Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited.