Invest in the power of disruption

The pace of change is greater now than ever before. Disruption is being felt across industries and geographies and proving a differentiator in the long-term performance of investors’ portfolios. There are exciting opportunities but also significant risks for the 'disrupted'.

We believe it is only from a detailed understanding of industries and business models, and through rigorous research, that investors can stay on the right side of change. This content series outlines our managers’ thinking on the key disruptive themes.

Evidence of the pace of disruption

Sequencing the Human Genome

Genetics-based research has accelerated, driven by a dramatic fall in sequencing costs. This has led to the creation of advanced treatment disciplines, such as immuno-oncology, gene therapy and, potentially, personalized vaccines.

Sequencing the Human Genome

Source: Human Genome Research Institute. Data as of 07/2017.

Worldwide Enterprise Spend on 'Digital Transformation'

Companies globally are investing heavily to keep up with the digital economy.




Worldwide Enterprise Spend on Digital Transformation

Estimated
Source: IDC, "Digital Transformation (DX): Understanding the Business Case - Market Spend & Trend Outlook," June 2018.

S&P 500 Technology Sector Earnings

Tech stocks have soared in recent years. But the performance is backed by impressive earnings growth, highlighting the durability of today's transformation.



S&P 500 Technology Sector Earnings

Source: Bloomberg. Data are for rolling, quarter-end periods through 29/06/2018.
Index performance does not reflect the expenses of managing a portfolio as an index is unmanaged and not available for direct investment.

Four disruptive themes - access our manager insight

We believe there are powerful themes shaping, and being shaped by, disruption. Click to read our managers’ latest thinking on each:

1. Technological disruption

2. Shifting demographics

3. A sustainable revolution?

4. New world order


1. Technological disruption

The rise of the digital economy is fundamentally changing how all businesses operate. A number of powerful, and investable, trends are linked to this global disruptive force. But which have the strongest potential?



2. Shifting demographics

New products and changing consumer appetites are widely evident – from millennials to retirees. Drug advances are leading to longer lives and urbanisation continues apace. What does this mean from an investment perspective?



3. A sustainable revolution?

Are we at the tipping point where return on investment is driving companies towards cleaner business practices and green thinking? Which are the most exciting innovations and how can investment help drive, and benefit from, the change?



4. New world order

China and other developing markets are growing in different ways to some of the older developed economies. Who will be the beneficiaries of cashless economies, China’s move onto the cloud and higher internet use in emerging markets? And where are the risks?



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