Vontobel megatrends model

Alignment with social trends creates new opportunities for investors. The Vontobel megatrends model offers guidance.

We are currently experiencing long-term social changes that are cropping up in countless areas. Hardly a day goes by without a new industry emerging that revolutionizes established business models or even makes them unnecessary. Additional trail-blazing developments await in areas such as artificial intelligence, robotics, or the Internet of Things. Keeping an eye on the future has been the ambition of investors since time immemorial—and the Vontobel megatrend model helps with this.

The model is based on three pillars that, in our eyes, are representative of the changes that we are currently experiencing: demographic change, the emergence of a multipolar world order, and rules for responsible business practices. In view of new challenges, the innovative spirit of humanity is called on, which in turn may well express itself for investors in long-term investment trends that show little correlation with global markets.

  

Megatrends

Demography

  • Digital health and tracking devices
  • Aging society
  • Millennials and changed consumer behavior

Multi-polar world order

  • Geopolitical distribution of the balance of power
  • Rise of emerging and “frontier” markets
  • Growing global prosperity
  • Increased conflicts

Sustainable creation of value

  • Climate change
  • Social responsibility
  • Responsible business management

  

Innovation

  • Artificial intelligence / robotics / Internet of Things / digitization

  

Demography: The needs of young and old are changing

The “silver” generation enjoys better and better physical and mental fitness nowadays, is much more active, and is protected materially at a high level. Companies are responding to this situation more and more with tailor-made offers such as “smart” clothing that can record health data.

However, the changing consumer behavior of younger adults (millennials), which promotes the development of new trends such as e-sports, is also the focus of this pillar.


Multi-polar world order: New competitors, new consumers

The once undisputed supremacy of the United States has increasingly been challenged in recent years from a political and economic perspective. On an economic level, America is seeing itself confronted with the rise of China, but also in India there are clear ambitions to advance the economy appreciably. The development in these two countries, the most populous in the world, is representative of the potential in the emerging nations.

In addition, the ever-increasing networking of computer systems and devices, the unrelenting increase in the flow of data, and threats by radical forces such as hackers are posing new challenges for the economic powers of the world.


The sustainable creation of value is becoming more and more important

Nowadays, almost every listed company has set itself the goal of strategically focusing on environmentally friendly and socially just business that is committed to the principles of good business management. There are good reasons for this: Companies without such a strategy are often penalized on the stock exchange, and adhering to ESG (environmental, social, governance) standards is becoming an increasingly important component of investment decisions for many.

These developments not only promote innovations in areas such as recycling, they also contribute to the emergence of various investment styles in the wealth management industry.

  

Vontobel megatrends

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Family influenced businesses

Things that are kept in the family are clearly better taken care of. Companies influenced by families often grow more sustainably, have a higher profitability, and provide more continual returns.

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Smart farming

The world population is expected to grow to 9.8 billion people by 2050, and the demand for food will increase by 70 percent. This fact will pose major challenges for agriculture worldwide. Especially when we consider that increased yields must come from less and less farmland and from water resources that are becoming less and less.

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Disruptors

New is most often better—at least when it comes to disruption. And digital restructuring is not sparing any industry. Established companies are coming under pressure and are losing loyal clients to companies that are newer, better, and faster.

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Dividend achievers

The next boom is sure to come. The next crisis too. Nevertheless, there are some companies that overcome economic lows more easily than others.

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Further information

Would you like to find out more about our Vontobel megatrends model? We would be happy to provide you with further information.

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