Mega forces are big, structural changes that affect investing now - and far in the future. As key drivers of macroeconomic and market volatility, they change the long-term growth and inflation outlook and are poised to create big shifts in profitability across economies and sectors. This creates major opportunities - and risks - for investors.
By identifying the catalysts that can supercharge these mega forces, and investing in them early, investors can potentially unlock a key factor in successful thematic investing, particularly for long term investors to ensure that their portfolios are positioned for growth.
There are five mega forces driving this change:
The world is split between aging and younger economies
Aging populations in major economies are poised to limit how much countries can produce and grow. By contrast, selected emerging market economies can benefit from younger populations and growing middle classes.
Potential to boost productivity
AI can automate laborious tasks, analyse huge sets of data and help generate fresh ideas. Digital disruption goes beyond AI.
Rewiring global supply chains
In a marked departure from the post-Cold War period of increasing globalization, we see countries favoring national security and resilience over economic efficiency.
A fast-evolving financial architecture
A fast-evolving financial architecture is changing how households and companies use cash, borrow, transact and seek returns.
A massive reallocation of capital
The transition to a low-carbon economy is set to spur a massive reallocation of capital as energy systems are rewired.
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