“The pandemic put a brake on the world’s economy, while at the same time challenging existing systems and structures and sowing the seeds of new changes to come as we discover limitations in the way we learn, work, and Live ”, begins the presentation of the Credit Suisse bank of the global report ‘Supertrends. Driving change. ‘
The report was led by Michael Strobaek, Global Chief Investment Officer of Credit Suisse, and Nannette Hechler-Fayd’herbe, Global Head of Economics & Research of the same institution. It is actually an update of the work prepared and presented three years ago under the name of ‘Supertrends’. Its purpose was to serve as a frame of reference for the bank’s clients, to invest long-term in what they called “high conviction thematic equities“.
This crisis has already modified existing systems and structures, while sowing the seeds of changes to come, as we discover the limitations in our way of learning, working, and living. In many ways, the world will not be like it used to be, and that includes investments, which will be more trend-focused.
However, there are “values” that will not be lost but will deepen over the years because they are part of the way of being and living of the new generations. Starting with the Millennials, some of these values are sustainability, responsible consumption, and social responsibility linked to issues such as actions in health, education, and corporate governance.
According to the report of the Swiss bank, there are five major investment trends that with the pandemic will become increasingly relevant. It is important to note that the study does not refer to investments in specific stocks and even specific sectors, but to the trends that investors will have in the coming years, encouraged by the changes generated by the pandemic. This phenomenon, according to Credit Suisse, has changed the planet forever and in the future, the dimension and depth of these changes will be clearly seen.
1) Climate change – Decarbonize the economy
Investors will have reason to direct resources to companies that contribute more effectively to the transition to a less carbon-intensive global economy. The recent economic strike, caused by the COVID-19 pandemic, has significantly reduced greenhouse gas emissions in several regions. This is a clear sign of what could be achieved in the future, creating a more sustainable and carbon-free global economy. The key sectors where investment trend focuses are: the production of carbonless and LECTRICITY, transport, pioneers actors change in the gas industry and oil; agriculture and food production.
2) Concerned Societies – Inclusive Capitalism
In Credit Suisse’s view, popular discontent is more related to national issues, particularly inequalities, than to the perception of external threats and the tendency towards protectionism. Anger has given way to worry. Credit Suisse, with the help of a new index, keeps track of whether concerns are increasing or decreasing. COVID-19 has shown that the true emerging threats are global in nature and require multilateral cooperation as well as individual protection.
3) Silver Economy – Investing in demographic change
An aging population will likely continue to drive business opportunities and return on investments for many years to come. In emerging markets, in particular, aging will occur at a speed never experienced in most of these countries.
4) Infrastructures – Closing the gap
Infrastructure spending is about to enter a phase of expansion. There are gaps, they are everywhere, as old economies have to cope with both existing and new needs, and also taking into account the trend towards greater sustainability. At the same time, the new economies continue to urbanize at a rapid pace. The expectation of lower and sometimes even negative interest rates over a prolonged period should provide an adequate stimulus for investment.
5) Technology at the service of man
Continuous innovations and challenges arising from the coronavirus crisis continue to make technology an attractive sector for investors, technological progress is irreversible.
These long-term investment trends, along with other changes caused by the unexpected pandemic, will cause surprises and unprecedented scenarios, which in fact will only be part of the new normal, says Credit Suisse.