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How has COVID-19 affected thematic investing?

Covid-19 has affected every area of the international economy. As the consequences of the pandemic continue to be felt in every sector of the global environment, one may well ask – what is COVID-19’s effect on thematic investing?

In addition to disrupting themes that investors had been tracking for a long time before the beginning of 2020, the pandemic has also led to the development of new trends driving the formation of new investment themes. It is becoming a more popular way of approaching investment in general. It offers a more effective way to grasp the vagaries and unpredictable movements of the post-COVID economy.

During 2020, as the pandemic took hold and brought the global economy to a standstill, active equity fund flows plunged quickly into negative territory, the thematic sub-sector actually continued to show positive growth. The reason for this is that the thematic approach promises greater certainty regarding investment decisions, which investors will naturally reach for in times of great uncertainty, such as the current era.

Crisis highlights the importance of healthcare innovation

One sector that has seen significant disruption as a result of the pandemic is healthcare. As a result of the pressures placed on the global health system during the crisis, healthcare innovation is a growing long-term trend – one that will present compelling investment opportunities. Even after the crisis abates, public support for innovation in this field is unlikely to subside any time soon.

Smart manufacturing essential as demand fluctuates

Manufacturers will need to change their way of doing things to keep up with the new normal. The focus on smart manufacturing will increase as global brands start to establish local manufacturing centers alongside their international networks. At the same time, data analytics will become ever more critical as a means of tracking fluctuating demand. In short, manufacturing will have to advance to ensure that it can remain responsive and productive.

Remote working has a positive climate change impact

Remote work quickly started to establish itself as the new normal, with even those companies most resistant to the idea rapidly adapting. Work can continue without costly and inefficient travel, which means that the technology that facilitates remote work is likely to be an area of significant growth for the foreseeable future.

Nour Private Wealth is a team of expert wealth advisors specializing in managing, protecting and growing personal wealth. Contact us for more information about COVID-19’s effects on thematic investing, other related subjects, and how to harness these changes to grow your wealth over the coming years.

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