The Inexorable Rise in Trend and Thematic Investing

Investment Megatrends Revisited

Investment 'Megatrends' are often associated with structural shifts or transformative forces that a) are likely to persist for the (very) long term and b) are expected to impact at a global scale, significantly, possibly irreversibly, on wider society. Investors debate the full extent of what might be called 'Megatrends' but some of the more commonly accepted ones include: Demographic Change, Technological Advancement, Climate Change, Urbanisation and Economic Transition, the shift of economic power from West to East.

After dissecting the macro-level 'MegaTrend' categories, investors are presented with an abundance of investable 'themes' to consider. Savvy Investor has collated the best recent thought leadership content that explores several facets of Trend or Thematic Investing in both its wider and narrower context.

 

THE CHANGING WORLD

The investment implications of new corporate models (PGIM, 2019)

To understand the changing nature of the 21st-century firm, PGIM's latest Megatrends paper draws on both the insights of PGIM investment professionals and a new proprietary survey of 300 public and private companies around the world.

Five things you should know about trends investing (Robeco, Mar 2019)

Robeco outlines some of the key drivers of today’s megatrends, demonstrates how to select structural winners, and illustrates how one might approach monetising the opportunities presented by trend investing.

Megatrends: The forces shaping our future (iShares, 2019)

For compliance reasons, this paper is only accessible in certain geographies

BlackRock iShares identifies five 'megatrends' driving change in the world and offers suggestions as to how investors might exploit them.

Inescapable investment "truths" for the decade ahead (Schroders, Mar 2019)

Schroders examines several economic drivers and disruptive forces which they believe will shape the investment landscape going forward.

Globalisation in Transition: The future of trade and value chains (McKinsey, 2019)

McKinsey Global Institute analyzes the dynamics of global value chains and finds structural shifts that have been hiding in plain sight.

THE RISE OF ASIA/CHINA

China Icebergs: Forces That Could Reshape the World (EIU/ PineBridge, Oct 2019)

This EIU/Pinebridge study looks at 3 major factors that investors should consider, particularly when considering investment in China.

Capturing the Asian century: tapping into Asia’s growth (Manulife IM, Jun 2019)

For compliance reasons, this paper is only accessible in the EMEA region

This report by Manulife Investment Management scrutinises the key economic fundamentals that underscore growth prospects within Asia, and investigates recent key developments in its economic transformation which have made the region appear much more investable.

TECHNOLOGY

Shaping the New Economy in the Fourth Industrial Revolution (WEF, 2019)

This World Economic Forum paper attempts to identify the most urgent challenges at the intersection of technology, economics and society, whilst exploring a range of potential interventions to address them.

Video: Preparing Portfolios for the Fourth Industrial Revolution (S&P DJI, 2019)

S&P DJI outlines the range of Kensho New Economy Market and 21st Century Sector Indices, which are based upon those companies propelling the Fourth Industrial Revolution.

Podcast: ‘With tech companies we need to be very vigilant’ (Robeco, Oct 2019)

Robeco's Jack Neele offers insights into his approach to portfolio management, shares his concerns about relative valuation in technology stocks and identifies emerging trends that are of interest.

AGING POPULATION

The Aging and Automation Resilience Index (Mercer, 2019)

Mercer and Marsh & McLennan Insights study of 20 major global economies examines how prepared countries are for the the twin threats of societal ageing and workplace automation.

Megatrends: The economics of a graying world (Vanguard, 2019)

Vanguard explores the age structure shift towards a smaller young-age cohort and a larger old-age cohort, and finds that impact on GDP growth is likely to be muted.

RAPID URBANIZATION

Structural Megatrends in Real Estate: Engaging the Future (Nuveen, 2019)

In a collaborative report between Nuveen Real Estate and MIPIM, the partners outline the major forces most likely to effect structural change and help shape the future of real estate.

Upcoming Urbanites: Urbanization drives major economic shifts (Nuveen, 2019)

Nuveen's paper explores the exponential growth in urbanization, and identifies potential investment opportunities in alternative assets including infrastructure, agriculture and impact investing.

RISKS AND OPPORTUNITIES PRESENTED BY AI/CLIMATE CHANGE

Future 2024: Asset Allocation in the Age of Mega Trends (BNY Mellon/CREATE-Research, 2019)

Professor Amin Rajan's report offers insights into institutional investor responses to the twin challenges of artificial intelligence (AI) and climate change.

Reducing carbon risk in institutional portfolios (Candriam, 2019)

For compliance reasons, this paper is only accessible in certain geographies

Candriam provides a solution for evaluating the holistic carbon risk of an organization by looking at greenhouse gas emissions.