Megatrends are long-term, large-scale forces that shape the world and the most prominent of these currently impacting global investors include artificial intelligence, the energy transition, geopolitics and deglobalisation.One specific approach to finding this investment opportunity is via key stocks that provide exposure to such megatrends and the regions driving corresponding themes, using diversified tactical allocation.
Tencent is already hinting at introducing its own version of the popular OpenAI ChatGPT product, and we believe the Chinese company is capable of replicating the successes of Google, Meta, and Microsoft in areas like cloud computing and natural language programming. In the interim, global investors keen on discounted access to the AI and technology megatrend could do worse than China’s Tencent or even the JSE’s Naspers/Prosus.
Copper is a standout metal at the moment, and most forecasters predict tight supply and higher prices in that commodity over the short to medium term. We have taken exposure to the energy trend through the construction sector, which should benefit from mines building out their own power solutions and further contracts under Eskom’s independent power producer rollouts.
There is some good news for contrarian investors, as gold is making somewhat of a comeback. Global megatrends linked to demographics and geopolitics are quite inflationary, creating bullish sentiment towards the world’s long-term favorite precious metal, gold.