Why invest?
We believe that the companies that are the winners of today are likely not necessarily the winners of tomorrow. In a changing world, investors in traditional indices face more risk than ever. We are in the early phase of disruption in many areas. The accelerating pace of ground-breaking innovations transforming entire industries opens up opportunities for investors – to invest in the future rather than remaining anchored in the past.
To us, Megatrends embody powerful steadiness – think tectonic plates – as well as flexibility to incorporate transformative change. They remain relevant for several decades and have the potential to affect our daily lives.
We believe that:
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Companies that benefit from structural trends achieve better long-term growth and margins.
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Focused, pure-play thematic companies can challenge established market leaders.
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Detecting positive inflection points in profitability offers the most attractive return potential.
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We identify companies with high growth prospects, improved quality characteristics and mid-market capitalization that benefit from key long-term trends.
The Vontobel Megatrends Framework
Sustainable value creation involves balancing economic, environmental, and social considerations to generate long-term value for stakeholders. Successful businesses integrate sustainability in their core strategy through responsible practices.
Sustainability in this context refers to the business governance of the underlying firm and does not refer to the fund underlying investments as the fund does not make any sustainable investment as defined in SFDR.
Geopolitical uncertainties and deglobalization tendencies fuel the race for leadership in resources and technology. The security of food, energy, supply chains and digital networks will play a key role for the success of economies in the coming decades.
Ageing societies will lead to a shortage of labor while threatening healthcare systems. The overall population is set to grow further, and people will increasingly move to cities. This megatrend fuels investments in infrastructure, mobility, and healthcare.
Technological convergence involves the integration of diverse technologies, leading to innovative and transformative solutions. For instance, artificial intelligence (AI) holds the potential to revolutionize sectors such as healthcare, transportation, finance, and energy.
Themes emerge from Megatrends
The real sweet spot for investors is equities that are likely to benefit from two or more megatrends. We see the four megatrends in the center of the diagram below, driving many investment opportunities. We call these opportunities themes and have highlighted the most promising ones below.
Sustainability in this context refers to the business governance of the underlying firm and does not refer to the fund underlying investments as the fund does not make any sustainable investment as defined in SFDR .
Thematics: multiple layers of alpha
"We focus on companies with high thematic purity and the potential to disrupt their industries.”
