Megatrends that will shape investment growth
By Kirsten Hastings, 31 Jul 18
There are nine key megatrends that will have a big impact on the investment philosophy of the future, according to research by RBC Wealth Management, part of the Royal Bank of Canada.
Food revolution and emerging technology to underpin investment in food production and distribution
As sustainability becomes more important for society and traditional dietary patterns shift, agribusiness sectors are facing unprecedented demand to deliver an increasing volume and variety of products.
Combined with growing global populations and an expanding middle class, the production of cereals, meat and other food commodities will have to increase by around 70% to keep pace.
“As it stands, food and agribusiness comprise a $5trn global industry, and represents 10% of global consumer spending and 40% of employment,” Storm said. “Growing populations and their tastes will require significant investments in food distribution, farm machinery and emerging technologies. In our view, investment in these industries, which underpin global function, are likely to generate solid long-term returns.”
Demand for water is expected to growth 55% by 2050 opening a new market for investors
Only 0.007% of Earth’s water fit for consumption. Factors including, population growth, pollution, wastage and rising temperatures are putting mounting pressure on this scarce and vital resource. The number of people in water-stressed regions also continues to increase.
Water, currently a $600bn market, is poised to grow to $1trn within the next two years, providing ample opportunity for investors.
“The scarcity of water that is fit for consumption opens the door to an array of investment opportunities,” said Storm. “Existing resources will grow, while new industries and technologies will develop as water supply is depleted. Urbanisation and industrialisation don’t seem to be slowing down any time soon, and the effect that each has on water supply will open up a whole new market to investors.”
Waste management industry expected to grow alongside urban sprawl
Around 8.3 billion metric tonnes of plastic has been created in the last sixty years. As the number of city residents, who generate twice as much waste as their rural counterparts, increases, we’re currently on a path to more than triple our waste production.
Businesses and governments will have to increase waste management and recycling solutions to cope. With options including waste collection, landfill operations and transfer and recycling, investment opportunities are plentiful.
David Storm suggests that “as the number of city-dwellers increases producing more waste,being able to manage this is vital for society and the environment alike”.
“Our valuation of the global solid waste market is at $300bn by 2023; giving investors a diverse range of growth-delivering opportunities in this sector and we are seeing a growing number of funds dedicated to this theme.”
Tags: Investment Strategy | RBC
