Thematic Investing: Adapt and thrive
Do you like scoring wins based on know-how that other investors don’t have (yet)? Thematic Investing allows you to invest in themes that are near and dear to you.
We provide you with the needed support so your favorite theme can become more than just a matter of the heart, but rather a chance to adapt an thrive.
- Smart Farming & FoodTech
- Smart Healthcare
These are just a few of the major structural trends that could change our everyday lives: changes that are coming about due to the rapid progress that our society is going through. In short, these changes are affecting every dimension of our lives: environmental, demographic, socio-economic, as well as behavioral.
These profound changes won’t spare the economy and the corporations within it. Accordingly, many investors are asking themselves:
“Who will benefit from these changes?”
The main goal of Thematic Investing is to anticipate changes and take advantage of them, in order to identify today possible structural winners of tomorrow – as early as possible.
The greatest success beckons companies that are winning with flexibility
Find out which thematic investments we can offer you at Vontobel, and what market observations and considerations we incorporate into the selection of thematic equities.
Investment Outlook 2022Harder, better, tougher, greener
Just four buzzwords for investment year 2022? Find out more about Vontobel’s baseline scenario and get an overview of the backstory from our experts.
Thematic Investments in focus
Mankind’s water consumption is increasing inexorably. But how much water is actually of drinking quality?
Smart Farming & FoodTech
The world’s population is expected to grow to 9.8 billion people by the year 2050. With this growth will come an increase in demand for food.
It is forecasted that to feed the world’s people, we will need to produce 70 percent more food than we do today. This fact poses major challenges for agricultural techniques around the world. Especially when you consider that an increase in yield will have to be possible despite having less arable land to work with, and increasingly limited water resources.
The Era of Robotics
Companies from many different sectors are pondering investments in robotics and automation technology.
The goal of these investments is to increase productivity and offset higher costs that result from wage increases. For quite some time already, the focus has moved beyond traditional industrial production and supply chain segments; automation has also begun in the service sector, whether it is by exploiting Big Data or via AI (Artificial Intelligence).
Robotics could affect more and more areas of life.
Data processing in “the Cloud” has become an engine of innovation, efficiency and globalization.
Data, apps and computing power can be accessed today from anywhere in the world, all in a matter of seconds. This instant availability is the key to allowing visionary ideas such as the Internet of Things to take shape. Seen in this light, Cloud Computing functions across industries as an enabling technology that increases performance, productivity and reliability, lowers costs and makes services scalable. Industry giants such as Amazon, Microsoft and Google are setting the benchmark in this arena. Small and medium-sized enterprises (SMEs) are likely to gain innovative capability and agility through Cloud Computing as well.
Strong brands are intangible assets that enable a company to achieve a dominant market position.
Brands can influence consumers’ purchasing decisions. The broader the competitive offer, the sooner a brand can successfully shine like a beacon, attracting buyers in the vast sea of confusing options. This applies to the brand-loving Millennial generation – and even more so to Generation Z, who became familiar with brands as catalysts for a new sense of togetherness. “NextGen Brands” have even managed to elevate drinks, snacks and gadgets such as smartphones to “cult” items – or to be more precise: to “culture” itself.
Companies with a strong brand can often outperform the broader market. This is because brands cannot easily be copied by competitors and, once established, are associated with relatively low costs. This market position could lead to above-average returns.
Digitization is also revolutionizing the healthcare system and should increase efficiency on the one hand while reducing costs on the other.
Microsensors in pill form; medical practices networked together with hospitals, pharmacies and health insurance companies; robots performing surgical operations; health apps and wearables – all these are just some of the examples we will see in this arena. The digital healthcare system will have to respond to the pressing challenges of our time: population growth, higher life expectancy, the growth of emerging countries, and a global pandemic.
The conceptual base for thematic investments is our proven Megatrends Model. They allow us to think outside the box when looking at individual thematic areas. In turn, it is possible to systematically grasp interrelationships and dependencies.
More exciting thematic investments
Ferrari, Oracle and Comcast are three companies that have one thing in common: They are family-influenced companies. Having a common family background can also be relevant for investors.
Power of Diversity
Companies oriented towards gender diversity can create the ideal conditions for encouraging innovation, for example.
Anyone who thinks that diversity in a company only improves values such as fairness and equality may be making a mistake. From an economic performance point of view, too, it can make sense to plug the gaps in terms of gender equality. This includes increasing the proportion of women in managerial positions, which is still low. Companies that are committed to gender diversity also tend to perform better in terms of corporate management and have a healthy balance sheet.
E-Sports and Gaming
The movie and music businesses are no longer the alpha and omega in the entertainment industry. Today, e-sports and video gaming are setting the direction the industry is headed in.
E-sports professionals are celebrated as modern gladiators, earning prize money in the millions – and could soon even be bearers of the Olympic torch. In short: the economic potential around this new branch of the entertainment industry is huge, as soon smartphones become potential gaming devices, meaning that 4 billion people will be carrying one around in their pockets. Trend: up, sharply.
Impact for Good
How can the power of the market be used to drive positive developments forward, while not losing sight of returns?
This is exactly what we are making possible for investors with the “Impact for Good” theme. We are identifying four core areas – health, poverty, environment and education – and investing in companies that are working reliably on solutions and helping people in these areas.
Airbnb, Uber, and Amazon – these three disruptors have fundamentally altered established industries. Other companies will follow their example.
The triumphant advance of online shopping does not seem to be stopping. Accelerated by the Coronavirus pandemic, it has now also reached the generation of older retired persons – the “silver agers”.
Online shopping platforms have brought about a change in consumer behavior among the broad population, because they have succeeded in breaking down barriers to entry. They no longer acquire potential customers only at the local level, from around the world – digitally. In addition, the e-commerce sector understands how to adapt other digital trends to ist own purposes, for example in the area of logistics. Amazon now offers same-day delivery for some items, for instance. This is only possible through effective inventory management, a high degree of automation, and quick responsiveness.
Did you know?
Diversification is the basis
Thematic investments are suitable for building on an already diversified portfolio. However, they are less suitable if you are only initiating diversification.
Megatrends and Thematics are the way to go when it comes to applying your own assets in harmony with your convictions. Would you like to take advantage of this approach in the context of your portfolio? We would be happy to advise you on this.
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All information and opinions expressed in this material were obtained from sources believed to be reliable; however, no guarantee can be made as to their accuracy or completeness. All information and opinions were correct at the time of writing of this report and are subject to change without notice.