It’s heartening to know that within a decade, Asia will possess the most dynamic middle-class consumer segment, offering extensive investment possibilities.
According to a thematic analysis regarding today’s world requires an endless as well as the open mind of all possibilities as well as an infinite sequence of the way information can gauge together for making a pattern and ultimately leading to paving the way for unique ideas or themes.
In one’s viewpoint, investing this way is in no means new. In fact, it dates back to early 2000s and thus has come a long way as endless investment themes have got sprouted off currently from all possible angles like social, economic, demographic or technological in the form of digital security, sharing economy, millennials, etc.
This is the exact juncture when they examine the world intending to find out if there exist any similarities between apparently the independent data points as we as well bring out together around the central concepts.
When I was asked concerning what’s the foremost necessary aspects of Julius Baer’s approach, I continuously stated that there are a few of the things. Initially, of all, our team incorporates an analysis as well as research and complete investment background, and this allowed us to possess an interdisciplinary approach right from the beginning. Our firm was one amongst the first banks to try to utilize thematic analysis at the time. Additionally, we tend to design a proprietary tool to rank industries and firms consistent with our philosophy.
This approach embarked on as a strictly research-driven exercise. We conduce to identify the primary ones to spot the “Silk Road,” orphan medication for rare diseases, digital health, and education, amongst others, as the core globally relevant trends. We manage to begin publishing our findings in white papers and presenting them to our clientele base at our Next Generation Dialogues.
We also have a sudden tendency to notice that analysis papers bring about significant reactions from the clients. A lot of our esteemed clients have started speaking to us stating that “OK, I browse your paper, however how I would be able to invest in this theme?” that’s once the investment aspect took over. We design numerous passive merchandises for various investment themes initially. A number of them went on to win trade awards.
Eventually, we tend to get classified numerous complete themes into what we thought-about ‘five key international megatrends’ – as an example, macroeconomic, geopolitical, as well as technological forces that were deeply dynamical in shaping our world and shaping our future at an unprecedented pace. We then floated all our actively managed core strategies supporting this cross-thematic approach.
These five critical structural growth themes that we’ve got known and have chosen to speculate in are Arising Asia, Digital Disruption, Energy Transition, Feeding the world, and Shifting Lifestyles.
Nevertheless, one would wonder why I decided to specialize in these? The solution is rather simple. For us, it comes all the way down to numbers. Over the last ten years, the middle-class category in Asia has tripled from 500 million to concerning 1.5 billion and is anticipated to extend to over 3 billion by 2030. What’s it means is that in a decade or so, approximately Asia can have the first dynamic middle-class consumer segment phase.
Looking for opportunities
Then, we wish to translate these trends into long term probable investment opportunities. That’s one of the core essences of the succeeding step. So, assume travel, assume cosmetics, beauty and wellness, and new consumer trends in any space that contributes to upward social quality. We glance at corporations World Health Organization foresee this and develop merchandise and services within the premium consumer satisfaction phase.
Also, Digitalization is such essential focus space, with excellent opportunities likewise as high risks. Consumers like the constant modification except for investors the chance of failing is incredibly real. Such a large number of corporations return and go, making great hypes so disappearing into oblivion. You may win it all or lose it all.
For example, we don’t invest in artificial intelligence in an instant, as a result of we tend to believe that they’re plagued by the negative growth prospects of the automotive trade. This implies that artificial intelligence is presently expensive. However, we have a tendency to like cloud computing, that is anticipated to grow to over $600 billion by 2023.
In short, we have a tendency to analyze each shift within the investment universe perpetually, to attach them to the large image and take into account each the top side and also the drawback they represent.
One amongst the digital payment corporations we included in our portfolio was bought right afterward by an industry leader – and needless to mention, this helped us in delivering outperformance.
This is wherever our clients like having a top-down and bottom-up approach, combined with a high-conviction investment vogue.