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5 funding traits that can dominate after the pandemic

22, 2020

4 min read

This article was translated from our Spanish edition using AI technologies. Errors can occur due to this process.

This story originally appeared on Alto Nivel

By Antonio Sandoval

“The pandemic has slowed the global economy while at the same time questioning existing systems and structures and laying the seeds for new changes when we discover limits in the way we learn, work and live,” the Credit Suisse presentation begins Bank of the Global Report & # 39; Supertrends. Driving change. & # 39;

The report was chaired by Michael Strobaek, Global Chief Investment Officer of Credit Suisse, and Nannette Hechler-Fayd & # 39; herbe, Global Head of Economics & Research at the same institution. It is actually an update of the work that was done three years ago under the name & # 39; Supertrends & # 39; was prepared and presented. The aim was to serve the bank's customers as a frame of reference and to invest long-term in so-called "thematic stocks with high conviction".

This crisis has changed existing systems and structures while at the same time laying the seeds for future changes as we discover the limits of our way of learning, working and living. In many ways, the world won't be what it used to be, and that includes investments that are more trending.

However, there are "values" that are not lost, but deepen over the years because they are part of the way of being and of the new generations. Starting with Millennials, some of these values ​​include sustainability, responsible consumption and social responsibility, which are tied to issues such as health, education and corporate governance.

A general sustainability trend of 21: the transition to lower carbon usage, says @lydie_hudson of Credit Suisse on our podcast. The transition "will result in a lower cost of capital … but not for free." Listen to the podcast:

– Credit Suisse (@CreditSuisse) December 21, 2020

According to the Swiss bank's report, there are five key investment trends that will become increasingly important with the pandemic. It is important to note that the study does not focus on investing in specific stocks and even specific sectors, but rather on the trends investors will have in the years to come, fueled by the changes brought about by the pandemic. This phenomenon, which, according to Credit Suisse, has changed the planet forever and will clearly recognize the dimensions and depth of these changes in the future.

1) Climate Change – Decarbonising the Economy

Investors will have reason to direct resources towards companies that are more effective in contributing 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 to create a more sustainable and carbon-free world economy. The key sectors that the investment trend is focused on are: carbon production and LECTRICITY, transportation, pioneering players in the gas industry and oil; Agriculture and food production.

2) Affected Societies – Inclusive Capitalism

According to Credit Suisse, public dissatisfaction is more related to national issues, especially inequalities, than to perceptions of external threats and the tendency towards protectionism. Anger has given way to worry. Credit Suisse uses a new index to track whether the concerns are increasing or decreasing. COVID-19 has shown that the actual threats that do arise are global in nature and require multilateral cooperation and individual protection.

3) Silver Economy – Investing in Demographic Change

An aging population is likely to drive business opportunity and ROI for many years to come. In emerging markets in particular, aging will occur at a rate that most of these countries have never achieved.

4) Infrastructures – closing the gap

Infrastructure expenditures are about to begin an expansion phase. There are gaps, they are everywhere, as old economies have to cope with both existing and new needs and also have to take into account the trend towards more sustainability. At the same time, the new economies continue to urbanize rapidly. Expecting lower, and sometimes even negative, interest rates over time should provide a reasonable incentive to invest.

5) Technology at the service of people

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 create surprises and unprecedented scenarios that will actually only be part of the new normal, Credit Suisse says.

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