Moderator: Philip Biber, Sionic Expert: Mobeen Tahir, WisdomTree
Headlines:
- Most megatrend (or ‘thematic’) investments sit within the growth sector and therefore have the potential to offer attractive returns
- A radical energy transition is underway with energy systems being electrified and decarbonised, switching away from fossil fuels into clean, renewable sources of energy
- On the path to net zero, an unprecedented number of mined commodities will be required to develop clean-energy technologies
- Electric vehicles, energy storage, charging, wind and solar all rely on a range of metals, from platinum to nickel
- When seeking to gain access to megatrends, the major hurdle is finding, and selecting, those companies that are closely involved in the story
Context:
Megatrends are exciting because they allow investors to connect to a real, ongoing and relevant ‘story’, and take a position on something with the potential to change the world.
WisdomTree’s thematic classification is divided into the following four major themes: Technological Shifts, Demographic and Social shifts, Geopolitical Shifts and Environmental Pressures. Our thematic strategy philosophy focuses on: clarity of theme; expertise; purity of exposure; differentiation; and transparency, investability & discipline.
There is much interest in cybersecurity, artificial intelligence and health technology. Within the latter, the development from generalised medicine to predictive care is of particular interest and could lead to the tailoring of medicine to an individual’s genetic makeup. This includes genetic engineering where genes are deleted, added or adapted. This genetic engineering is also happening in food technology, in order to create more robust food production.
Cloud-computing also continues to be an interesting opportunity, especially exposure to data centres. Although data lives on the cloud, that cloud must live somewhere – in data centres. As technology adoption continues, the demand for data centres continues to increase.
WisdomTree’s deep expertise in constructing innovative rules-based indices, and our partnerships with industry experts, can provide investors with products offering a targeted exposure.
Key Takeaways:
- When seeking to gain access to megatrends, the major hurdle is finding, and selecting, those companies that are closely involved in the story
- The ‘Environmental Pressures’ megatrend has prompted a rise in interest around hydrogen as an important component of the energy transition
- Whilst lithium-ion batteries have been the mainstay of the electric vehicle market, industries are looking for alternative renewable energy sources
- Historically, producing hydrogen has been a polluting business, as most use natural gas as a feedstock but it is now possible to produce hydrogen from renewable sources of energy and it is this ‘green hydrogen’ that is becoming of increasing interest to investors
