Thematic investing can better position portfolios for the future

By: Kenny Rabson, CEO, Discovery

Kenny Rabson, CEO, Discovery Invest
Kenny Rabson, CEO, Discovery Invest

In this changing world, trends are emerging that are set to transform investment markets globally.

Four ‘megatrends’ are widely recognized as macroeconomic forces that will fundamentally shape the world going forward. In so doing, they are set to have a profound influence on how we address some of society’s biggest challenges and they will create immense opportunity.

The South African equity market, which represents less than 1% of the global equity market, does not offer much exposure to these global megatrends, so the new Discovery Global Megatrends Fund is an option for unlocking these opportunities and for providing diversification in portfolios.

Discovery Invest recently partnered with Goldman Sachs Asset Management, to introduce a new investment opportunity giving access to a range of thematic equity portfolios designed to give exposure to global megatrends. Goldman Sachs Asset Management is a global leader in the thematic investing space, with over 20 years of experience  and a strong management track record.

The Discovery Global Megatrends Fund is available on both Discovery Invest’s local and global platforms. The Fund provides clients with unique exposure to these four global megatrends by allocating investments equally in four Goldman Sachs Asset Management equity portfolios, each aligned to one of these megatrends. The four megatrends are:

  • Technological advancement: Increased connectivity and data are enabling machine-driven insights that will transform how we operate. With younger generations’ increasing comfort in using technology, new business models and opportunities will emerge. The artificial intelligence market will grow to a $190bn industry by 2025, a MarketsandMarkets™ analysis shows.
  • Environmental sustainability: The urgent threats of climate change and damage to the environment leave global economies with no choice but to turn to green alternatives for energy, food and transport. There is a need for green alternatives – the United Nations predicts a 40% shortfall of available global water supply by 2030.
  • Future of healthcare: Genomics and precision medicine are set to revolutionise healthcare. With continued innovation in gene mapping and sequencing, paired with the decreasing cost of doing so, personalised treatments with improved outcomes are becoming the way forward.
  • New-age consumer: Millennials have become the world’s most powerful consumer force. With 2.3 billion people, millennials are the largest consumer cohort. As they enter their prime earning years and increase their spending, they will drive a new age of consumption. Millennials are creating a potential long-term, secular growth opportunity for investors.

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