Citi Global Wealth UNSToPPABLe TreNDS | | 67 Investments this environment, we see a broad range of companies that may be able to wHAT To Do Now? capture some of that value. For now, we see limited ways to gain exposure to the rise of the metaverse. We reiterate our long-term conviction in the transformative potential Telecom operators and equipment vendors may be best placed initially, of digitization. And we favor long-term exposure to this unstoppable given the greater data usage that is required to support this virtual world. trend in portfolios. Despite the sharp selloff in related assets to date, Looking out somewhat further, makers of hardware components that however, further near-term downside cannot be ruled out. That said, enable the metaverse experience – such as optics/sensors, displays and we believe a peak in interest rates to be likely in 2023 and that rate semiconductors – are also placed to benefit. cuts should follow thereafter. If so, this would enable investors to focus more on digitization’s long-term prospects. While we see attractions to investing in hardware which will serve as building blocks to future virtual worlds, investability within the metaverse is much We see a variety of possibilities for building exposure to more challenging at present. Admittedly, there are competing visions of how semiconductors, robotics and automation and the metaverse, as the metaverse may evolve. Large incumbents today – such as leading social well as in other areas such as fintech, cybersecurity and artificial media platforms – are keen to retain their dominance in tomorrow’s world intelligence. While broad-based passive exposure is one option, we and are investing heavily accordingly. But others favor a decentralized model favor equity strategies from specialist managers, as well as private where users have greater power over their data. market strategies for suitable investors – see Digitization and the growth in alternative investments. FiGUre 2. THe riSe oF THe roBoTS Digitization has far to go. Get ready for the next stage of GLOBAL INDUSTRIAL ROBOTICS MARKET the revolution. 180 160 140 120 n 100 $b80 60 40 20 0 '18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 Source: Statista and Citi Global Insights, as of 28 Oct 2022. All forecasts are expressions of opinion, are subject to change without notice, and are not intended to be a guarantee of future events. Chart shows the estimated size in billions of dollars of the global industrial robotics market, with forecasts out to 2028.