Do you remember the television program Beyond 2000 that aired about 25 years ago? And do you remember how fascinated yet sceptical we were about the notion of hover boards and self-driving cars in this ‘futuristic’ series? Most of us probably did not believe that these out-of-this-world ideas could actually become part of our reality.
And now, a mere two decades later, these once futuristic ideas have become reality and the future we once thought impossible is here.
But what is going to happen ‘Beyond 2023’ and how will the future be shaped? At Momentum Investments, we believe that from an investment perspective there are six mega trends that will emerge, evolve and mould the future world.
These six trends (and their subthemes) that will play out and significantly affect the global economy are:
- Climate change (including water and food provision, renewable and clean energy),
- Technological innovation (artificial intelligence (AI), Big Data, autonomous and electrical vehicles),
- Demographic change (general healthcare and sustainable living),
- Lifestyle (online streaming and gaming),
- Space exploration (Space tourism, nano electronics – think SpaceX and Virgin Galactic), and
- Shifting economic power (West to East and spending patterns)
Under these trends, we have adopted a unique and innovative approach that combines a range of different and diversified sub-themes, strategies and exposures into an actively managed solution for the discerning investor, called the Momentum FutureTrends Fund.
Also referred to as thematic investing, this investment portfolio type is becoming increasingly popular around the world. It allows investors to capitilise on future trends by identifying macro-level themes today that are likely to flourish over the coming years and even decades.
We believe these mega trends will lead to significant macroeconomic changes that will have a material or significant impact on the world at large and all the people that live in it. We are therefore taking a very long-term view of the world and do not place too much emphasis on shorter term noise and uncertainties, including whether the world economy will or may be in recession over the next year, whether interest rates will move up or down as a result of inflationary pressures, or whether individual asset classes are cheap or expensive.
The way we therefore approach thematic investing is one that focuses on predictable long-term trends rather than short term economic anomalies or specific companies or sectors, enabling investors to access structural, once-off shifts that can change an entire industry.
Identifying the potential for structural change and investing in expected transformations early (such as the rise of the internet in the 90s) is a key driver of successful investing. This is particularly important for long-term investors to ensure that their portfolios are positioned for growth opportunities including but not limited to artificial intelligence, machine learning, robotics, blockchain and data analytics. Investment opportunities tied to the concept of sustainability, such as clean energy and green bonds, are also garnering much interest. And more recently, investors have been turning their attention towards healthcare given the global crisis that the COVID-19-pandemic sparked – all themes aligned to the six mega trends we have identified.
After thorough research and combining theory with practice, the Momentum FutureTrends Fund was launched to provide for the needs of the discerning investor. This fund considers these megatrends and accompanying themes and offer them all in one product.
We believe that a diversified approach in combining these opportunities is more compelling than relying on a single theme playing out. As such, we have selected a range of exchange traded funds (ETFs) to give us the desired exposures we want and ones that are directly linked to the themes identified. The result is a portfolio that is well-diversified whilst still aligned to these mega trends.
What type of investor would find the Momentum FutureTrends Fund attractive?
The Momentum FutureTrends Fund is for investors:
- with a bigger picture outlook on the world;
- who are interested in themes such artificial intelligence, renewable and sustainable energy and healthcare technology;
- who want to access structural, once-off shifts that can change an entire industry;
- with a long-term investment horizon;
- with a high-risk profile who are aiming for long-term real returns above the MSCI All Country World Index over a minimum of seven-year rolling periods; and
- who want to have access to future trends that will shape the future of the world we live in.
The minimum investment amount for this fund is R2 000 and the minimum monthly amount is R250.
With us, investing is personal. With the Momentum FutureTrends Fund clients not only have the opportunity to grow their capital over the long term, but also help fund the way the future will shape and unfold.
Momentum Collective Investments (RF) (Pty) Ltd (the “Manager”), registration number 1987/004287/07, is authorised in terms of the Collective Investment Schemes Control Act, No 45 of 2002 to administer Collective Investment Schemes (CIS) in Securities. The Manager is the manager of the Momentum Collective Investments Scheme. Standard Bank of South Africa Limited, registration number 1962/000738/06, is the trustee of the scheme. CIS’s are generally medium to long-term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. The terms and conditions, a schedule of fees, charges and maximum commissions, and additional risks are available on the minimum disclosure document (MDD) and quarterly investor report (QIR) for each portfolio which is available on momentum.co.za. All performance figures are net of fees and represents the A class in each portfolio.