Supertrends Diversify your risks 52 | 53 Trends with staying power Our Millennials’ values Supertrend is set to benefit For investors with a multi-year horizon who want to from long-term demographic patterns, as the young Supertrends – Diversify add equities to optimize their strategic asset alloca- cohort in Asia in particular will dominate consump- tion, we believe that selectively adding Supertrends tion and drive digital trends like social media, with a growth style makes sense due to current streaming, online shopping and fintech. Importantly, valuations. Our Technology Supertrend should get a this generation has a long-term focus on the world your risks boost from the metaverse, as companies increas- of tomorrow, supporting biodiversity, the circular ingly invest in advanced IT infrastructure, higher economy and health and nutrition. processing power, collaboration tools and newer digital payment methods. Artificial intelligence We also believe that the Infrastructure Supertrend adoption should continue to expand as digitalization remains well positioned for the long term with a accelerates and the number of Internet of Things global commitment by political leaders to accelerate Geopolitical tensions, subdued economic growth and rising interest rates devices surges, paving the way for automation, infrastructure investments. That said, higher interest are all weighing on equity investors’ sentiment for the time being. In the long virtual and augmented reality as well as healthcare rates might slow down large-scale investments in technology, which are all part of our Technology the short run due to the sector’s capital-intensive term, however, we believe that a diversified thematic investment covering Supertrend. commitments. multi-year societal trends should outperform global equities. The Supertrends are here to stay. In 2022, investors had to contend with volatile which should benefit from the (higher) interest rate financial markets and a bear market, interspersed by environment, along with selected consumer names. small rallies, as was the case over the summer. Within our Anxious societies Supertrend, geopolitical green raw Companies and consumers are currently grappling tensions put the Personal security subtheme back materials with the highest inflation in decades, which is into focus, while the Affordability subtheme high- persisting longer than many observers (ourselves lights a key issue due to the spike in energy and included) anticipated. As such, investors have food prices. The Employment subtheme within cleaner design/ started to rotate away from growth stocks into value Anxious societies is currently dominated by the lack production stocks. For example, the energy sector is benefitting of available labor and the difficulties that companies from higher oil and natural gas prices as a result of face in recruiting good employees, but an economic the Ukraine war. Our strong diversification approach slowdown could alleviate that problem. Last but not across the 23 subthemes of the Supertrends is least, we see the current energy crisis in Europe as Circular helpful in navigating turbulent markets such as another trigger point for climate change-related these, providing exposure to many different indus- debates, though one needs to distinguish between tries and trends. key energy topics (i.e., electricity generation and the recycle transition away from fossil fuels) and long-term economy On the defensive growth themes in an early cycle stage (i.e., hydro- We believe that our more defensive Supertrends, gen, precision agriculture and cultivated meat such as the Silver economy and selected subthemes processing), as the latter may see a delay in some within Infrastructure and Climate change, as well as investments in the short term. the long-term demographic trends within Silver economy, should prove less volatile in the months ahead than the growth-oriented themes captured in the Millennials’ values and Technology Supertrends. The Silver economy Supertrend focuses on health- care companies that should benefit from rising better service demand and strong earnings growth as societies age. Therapeutic areas of particular importance re-use/ include cardiovascular disease, oncology and repair neurology. Beyond the healthcare sector, Silver economy also has exposure to insurance companies, Find out more Find out more about Supertrends