"It is encouraging to see our Supertrends contribute positively to broader development goals while delivering returns to investors."
Supertrends 2022: Here to stay
The six long-term equity investment themes are designed to transcend business cycles. They offer an opportunity to help investors reach their financial, societal and environmental goals.
The COVID-19 pandemic and Russia’s invasion of Ukraine have led to greater volatility in financial markets, putting the Credit Suisse Supertrends to the test. But the long-term equity investment themes are designed to transcend business cycles and look beyond short-term sentiment. Outperforming the MSCI World Index in 2021, the latest Supertrends report says the six multi-year trends are here to stay.
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The Supertrend themes are mapped to the United Nations’ 17 Sustainable Development Goals (SDGs). Credit Suisse tracks the progress of the overall UN SDG framework and closely monitors the alignment of its investment themes and stock selection with the SDGs.
Short-term catalysts favored certain Supertrend themes in 2021. Infrastructure and Climate change, for example, benefited from solid tailwinds due to large-scale infrastructure projects, as well as political support for climate change action at key events like the UN Climate Change Conference (COP26).
Long term, our conviction remains that: “The Supertrends offer an opportunity to help investors reach their financial, societal and environmental goals. As more and more investors move in this direction, we believe our Supertrends are here to stay,” said Nannette Hechler-Fayd’herbe.
Anxious societies: Inclusive capitalism
COVID-19 has receded as one of the top worries for people around the world; with poverty, social inequality and unemployment coming back to the fore. Affordability, fitness for the labor market and personal security are likely to remain long-term priorities for individuals globally. The private sector, in conjunction with public services, will have the opportunity to address these societal needs.
Millennials’ values: Gen Z and Y
Supply chains and consumption trends have yet to return to normal after the COVID-19 crisis, creating a volatile consumer environment in the short term. Yet the long-term trends are solidly anchored. Digitalization is an ongoing process, with a young generation set to integrate the Metaverse into their everyday activities. Governments are also incentivizing health; a trend close to Millennials’ hearts. A recent Credit Suisse Research Institute survey1 found that young consumers remain very concerned about the environment and are highly motivated to play their part in driving change – especially in emerging markets, which is a focus area for this trend.
Silver economy: An aging population
A projected doubling of the world’s senior population to more than 2 billion by 2050 will create demand and unearth challenges – in the healthcare, insurance, consumer and property markets. While today’s seniors play an important role for companies that are currently catering to this population, the long-term trajectory will be underpinned by the younger cohorts of today as they age.
Infrastructure: Closing the gap
The start of a multi-year infrastructure boom is predicted for 2022, as government spending for new infrastructure programs kicks off in the USA and Europe – with the biggest spending on transportation, the energy transition and communications infrastructure. Due to underinvestment and deferred maintenance of existing infrastructure over the past two years, closing the investment gap remains an urgent and long-term investment theme.
Climate change: Decarbonizing the economy
Rising energy prices should act as a catalyst to cut the world’s dependence on fossil fuels for electricity production and transportation. The global food system, responsible for well over 20% of global greenhouse gas emissions (GHG), is also in the process of reducing its carbon footprint and offers long-term opportunities for a broad range of industries.
Technology: At the service of humans
Starting in November 2021, technology stocks have repriced to reflect a higher interest-rate world, as well as the fact that the very high growth rates during the pandemic will not be sustainable going forward. New digital worlds (i.e. the Metaverse) – and growing areas like data privacy and protection – will result in an ongoing rebalancing of human activities across real life and digital platforms in ways that enhance customer experience, safety and convenience.
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1 Credit Suisse Research Institute: The young consumer and a path to sustainability, 2022