Three mega-themes that spell opportunity for investors


The world's biggest asset manager - BlackRock, has released its mid-2023 market outlook, identifying three investment mega themes.

Here's how you can get a slice of the action.

Theme 1: The rise of artificial intelligence

investing mega themes ai decarbonisation ageing population

The conversation around artificial intelligence (AI) has been turbocharged by the roll-out of ChatGPT.

But AI offers wide-ranging applications including productivity boosts to companies through task automation and innovation.

Investors can harness the power of AI in several ways.

For a direct impact, head to the source. Listed tech companies such as Nvidia Corporation and Google's owner Alphabet (both listed on US markets) are big developers of AI.

Closer to home, AI-themed exchange traded funds (ETFs) are listed on the ASX including BetaShares' Global Robotics and Artificial Intelligence ETF, which invests in companies involved in robotics and automation, AI and unmanned vehicles and drones.

For a broader focus, investors can consider companies actively making use of AI. As an example, online furniture and homewares retailer Temple and Webster is using ChatGPT to power its pre-sale live chats, leading to an uptick in sales.

Or consider supply chain opportunities. As BlackRock points out, semiconductors are key components of AI tools, making this another area for investors to look into.

Theme 2: The road to decarbonisation

There is money to be made as global energy systems are rewired to low carbon alternatives.

The International Energy Agency says worldwide investment in clean energy is on course to rise to $US1.7 trillion ($2.65 trillion) in 2023, with solar power set to eclipse oil production for the first time.

IEA executive director Fatih Birol, says, "For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy."

Aussie investors can pick up a stake in some of the world's biggest green energy companies including General Electric and NextEra Energy - both listed on US sharemarkets.

For a diversified approach to green energy, there is an extensive choice of homegrown ETFs such as VanEck's Global Clean Energy ETF.

Alternatively, investors can tap into the renewables supply chain.

Mining company Pilbara Minerals, for example, produces the lithium that goes into electric vehicle batteries.

Here too, an ETF is available through the ASX-listed Global X Battery Tech and Lithium ETF.

Theme 3: Our ageing population

We're getting older - much older.

According to a UN report, by the middle of this century one in six of the world's people will be aged over 65, up from one in 10 at present.

Ageing may pose a challenge for governments, but it can put a spring in the step of investors.

According to BlackRock, ageing provides opportunities across sectors spanning healthcare, real estate, leisure, and individual companies with products and services pitched at seniors.

ETF managers globally have clued into the opportunities.

For focused exposure to a basket of ageing-related stocks, ETFs listed on overseas markets include the Global X Aging Population ETF, and the iShares Ageing Population UCITS ETF, which tracks an index of companies generating revenue from ageing populations.

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A former Chartered Accountant, Nicola Field has been a regular contributor to Money for 20 years, and writes on personal finance issues for some of Australia's largest financial institutions. She is the author of Investing in Your Child's Future and Baby or Bust, and has collaborated with Paul Clitheroe on a variety of projects including radio scripts, newspaper columns, and several books.