INVESTMENT OUTLOOK FOR 2023 - 24 - 3. COVID beneficiaries such as the e-commerce sector might continue to underperform as growth reverts to pre-pandemic trend lines. 4. The Ukraine war, the Sino-US trade war, and authoritarian and nationalist movements, including supply chain nationalism, are creating uncertainty. 5. Regulation remains a risk. Secular growth drivers should dominate short-term concerns over a three-plus year horizon In summary We believe bottom-up fundamental stock research, combined with portfolio construction discipline, is the best approach for navigating the uncertainty. We are revisiting each company-level financial model to stress-test it for recession scenarios and ensure our target prices are conservative. We have analysed our holdings based on their revenue growth potential and stability over the next three years, and the strength of their ‘moat’, or their competitive positioning and balance sheet strength. We are invested in high-quality, stable-growth names with deep ‘moats’. As for the more speculative growth stocks with longer duration cash flows, our positions are modest. We are looking for stocks that have de-risked or have idiosyncratic drivers that will 1 prove to be resilient in a recession. Examples include Micron Technology , where earnings revisions have fallen sharply and the stock is now trading at barely above 1 book value, and First Solar , which has fully contracted all of its production for the next two years, while US tax credits should allow it to expand production capacity. We are confident that secular growth drivers will dominate short-term cyclical concerns over a three-plus year investment horizon. We focus on owning sustainable leaders or beneficiaries of the digital transformation, with enduring competitive advantages, trading at compelling valuations. 1. These stocks are mentioned for illustrative purposes only. BNP Paribas Asset Management strategies may or may not hold positions in these stocks. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.