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5 Investment themes for the next 10 years

Bill Gates said that we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10. Why is it even important to estimate the way our world is going to transform in the coming years? Well, from an investment perspective, that can make all the difference to the kind of returns your portfolio earns.

Healthcare

Health tech, particularly telemedicine, is projected to grow rapidly in the next few years. Telemedicine or telehealth basically means virtual or remote health consultations and other healthcare services. The COVID-19 pandemic surely has a role to play in this accelerated growth. The size of the global telemedicine market was $46 billion in 2019 and it is forecasted to more than triple to $176 billion by 2026, as per data by Capital Group. 

Biotech is another area to focus on because advancements in gene therapy and the rapid application of AI in drug development is going to soon make cures for certain types of cancers and other widespread ailments possible. US and China, especially, are heavily investing in R&D to begin production and distribution of novel drugs in the coming years. 

AI and data analytics

Artificial intelligence will be helping several industries such as healthcare, financial services, automotive, manufacturing, etc. drive down their costs significantly by making their processes more efficient and also allowing them to set up new revenue streams. AI will add about $15.7 trillion to the global economy in the next decade, according to a PwC report. 

AI is already integral to several rapidly growing industries such as self-driving cars, cloud computing, and data sorting. For instance, Amazon, which is the market leader in the cloud computing market with a 32% share, uses AI and machine learning systems for its offerings at Amazon Web Services (AWS). 

Mobility technologies 

Since 2010, a total of about $330 billion has been invested in mobility technology, with self-driving tech getting the largest share at $106 billion, as per data by McKinsey & Company. Another $62 billion went to electric vehicles (EVs). 

The self-driving technology industry is estimated to create about $87 billion worth of opportunities for automakers and tech developers by 2030. Global tech giants like Alphabet are already heavily invested. Alphabet’s self-driving tech subsidiary Waymo has some of the most advanced technology in the field and is already valued at over $75 billion. EV startups to keep an eye out for include Rivian Automotive and Lucid Motors. 

Clean energy

The energy shift from sources like fossil fuels that release a lot of greenhouse gases to clean energy sources that don’t, such as hydro, wind, and solar, is rapid because nobody can contest climate change any longer. According to the International Energy Agency, renewable energy sources will account for about 95% of the net increase in global power capacity by 2025. 

About $5.1 trillion will be invested in the renewable energy industry by 2030, out of which $2.5 trillion will come from Asia, as per estimates by Bloomberg New Energy Finance. The Adani group has already committed to invest about $20 billion in green energy, a major chunk of which will be put towards hydrogen production. 

Robotics and automation 

The development of robotics is to hardware and manufacturing what AI is to software. While robots replacing humans may sound like a sci-fi proposition, it’s not far from reality and not as scary as it sounds. Countries like South Korea, Singapore, Japan, Germany and Sweden already have a high robot density in their factories. In 2019, Singapore had 918 robots per 10,000 employees while South Korea had 868. 

But automation is finding a place outside of manufacturing too. Robotic-assisted surgery is also gaining traction as it allows surgeons to perform complex procedures with greater precision and flexibility and also shorten the recovery time for patients. Due to its vast applications in industries such as manufacturing, healthcare, logistics, defence and security, and rapid advancement, the global robotics market is valued at about $31 billion and is expected to have a double-digit Compound Annual Growth Rate (CAGR) for the period of 2021-2025. 

How to begin investing based on investment themes?

As you can tell, the investment themes are around sectors and not specific companies. Hence, it’s prudent to invest in a way where you are not betting on a single player in any of these industries but instead the sector as a whole. Exchange-Traded Funds (ETFs) allow you to do just that! ETFs allow you to invest in a basket of stocks that meet the theme criteria that you are looking for. 

Sector-specific ETFs for tech, healthcare, etc. already exist out there. But if you want to target particular stocks as per your own strategy, you can use Appreciate’s Build Your Own (BYO) feature. This feature allows you to build your own ETF where one trade equals anywhere between 3 to 20 stocks. 
With Appreciate, you have access to tools and information that allow you to build and diversify your investment portfolio as you see fit. Our AI-based technology closely tracks market movements and your investment behaviour to give you real-time, customised recommendations for a portfolio that better aligns with your financial goals. This along with our wide range of US stocks allow you to strategically invest in global giants across industries to make the most of these investment themes. Get started today!

Team Appreciate

Team Appreciate