Thematic Investing

           

Today’s investment themes; tomorrow’s future

March 2023 | 4 minute read | Marketing Communication

Every company hopes that, when tomorrow comes, it will be one of the success stories. That may well be a reality for those businesses whose products serve their markets well. Not everyone can be a winner, though, and plenty of firms will find themselves struggling because they fail to adapt as the world changed around them. It is the job of the fund manager to try to work out which kind of company will flourish, and why. 

   
So how can they potentially identify those businesses whose products or services are starting to become indispensable, both now and for future generations? Who will be tomorrow’s pioneers of the modern equivalent of the light bulb, internet or mobile phone? What will drive their success; will they be in sectors such as sustainable infrastructure and energy, or will they come from elsewhere?

Finding the themes

One approach that can help us is thematic investing. In essence, this involves identifying the key, overarching forces that are shaping the world we will inhabit in the future. We call these megatrends, or long-term themes that will drive the development of society in the years and decades to come.

We believe there are four megatrends that will inform the way the world develops and, together, bring about seismic shifts in societies, ecologies, technologies and economies.

Why is this important? Well, the pandemic has changed our lives – with working from home, for example – and has spurred companies to create new business models. It has also accelerated existing trends, such as the move to online shopping and the adoption of new technologies, including mobile banking and cyber security.

  

Environmental challenges

The first megatrend is the challenge of counteracting the damaging effects of humankind’s actions on the planet and its natural ecosystems. 

Companies involved in areas such as sustainable agriculture, renewable and efficient energy, and pollution prevention will be on the front line when it comes to tackling climate change and preventing the earth’s natural resources from depleting further.

Demographic and Social challenges

The world’s growing and ageing populations will require the infrastructure of sustainable food and water supplies, pipelines and medical equipment to support them. Businesses that can serve our increasing desire to learn and maintain active and connected lifestyles are also likely to thrive.

Revolutionising Technologies

New technology transforms economies and markets. Future developments that will inform the world over the coming decades will most likely come in areas such as the ‘Internet of Things’, or fully connected appliances that can order the products they need. Businesses working with artificial intelligence, data processing and storage, and electric and autonomous vehicles also can look set to feature centre stage.

Economic shifts

The fourth megatrend involves structural shifts in economies. As emerging markets continue to develop, huge growth opportunities can open up in countries from China and Brazil to Thailand and Malaysia. Companies that seek to capitalise on their growing wealth and economic power will do well.

  
Amundi Thematics

At Amundi, we have been working with thematic investing for more than a decade. We believe that these four megatrends are both shaping the future and providing investment opportunities now, and we want to take investors with us on our journey. No individual or organisation can halt climate change in its tracks, but join us as we seek to put these themes into practice and together we can invest in a future that can be better for us all.

Source

Amundi Asset Management as at March 2022

Important Information
The information provided herein does not constitute investment advice or financial analysis. Full information on the product range can be found in the proposed sale or key investor information documents, supplemented by the latest audited annual report and the corresponding semi-annual report, if the latter is more recent than the annual report. These documents constitute the only binding basis for a purchase. They can be obtained in Switzerland free of charge from CACEIS (Switzerland) SA, 35, route de Signy, CH-1260 Nyon, Switzerland, representative in Switzerland, or on amundi.ch. The payment service in Switzerland is CACEIS Bank, Paris, Nyon / Switzerland branch, 35, route de Signy, CH-1260 Nyon, Switzerland. This announcement does not constitute an offer to buy or sell in countries where such an offer would not be legal. Amundi Switzerland is an Amundi Group company. Amundi Asset Management is a simplified management company under French law (“Société par Actions Simplifiée”) SAS with capital of €1,086,262,605 - Portfolio Management Company approved by the AMF under number GP 04000036, 90 boulevard Pasteur - 75015 Paris.