Where are you finding the most compelling opportunities to invest?
Our thematic equity offering is built around four strategic pillars: security, robotics, digital health, and edutainment. All four areas are seeing, or will see, an acceleration in certain trends as a direct result of COVID-19, so it is well worth discussing each of these in turn.
Security – with home offices having rapidly become a necessity rather than a matter of choice, there is a far greater reliance on digital technology. As such, we are seeing accelerating demand for solutions that can upgrade firewalls and make systems virus-proof.
Robotics – a key theme in this area is the redesign of production chains from outsourced to domestic and from manual to highly automated. Previously, the outsourcing of production to emerging economies had allowed businesses to tap a plentiful and low-cost labor force. Consequently, robotics has a huge role to play in the redesign of production lines from both a cost and a resource perspective. The service sector is also likely to become increasingly automated with the passage of time.
Digital health – given the strain that COVID-19 has inflicted on existing health care services, it is unsurprising to see the trend toward digitalization accelerating rapidly. This is evident in developments such as “telemedication”, the remote monitoring of patients following emergency hospital treatment, and the increasing use of artificial intelligence (AI) in drug development.
Edutainment – we often refer to this theme as the “gamification” of education using entertainment technology. This has infiltrated segments of the education sector, such as home study, virtual tutorials, language learning, and mathematics. The technology could potentially have been used more widely before the implications of COVID-19 catalyzed a very rapid expansion, thus sparking a huge acceleration in the creation phase of the edutainment theme.
Can you describe the cultural impact of COVID-19?
The shifts in mental attitudes and accepted practices have been lightning quick and far-reaching. For example, it took the better part of 30 years for online sales to account for 2% of the Italian retail market. That share has increased tenfold in a matter of weeks. Similarly, there has been a cultural unwillingness for people to share their personal medical data. Now, the propensity for openness is much greater. The overall trend in working from home will remain structurally higher moving forward and companies will need to reengineer their business approach accordingly. Necessity is the father of cultural change and it is completely reshaping the investment landscape.