A survey from RBC BlueBay says that the main megatrends over the next three-to-five years are more likely to be climate change and scarce resources, alongside technological advances, than anything else, according to 800 wholesale investors across Europe and the US.
The 19-page report, Megatrends 2022: Turmoil Fails to Derail Long-Term Investment Trends, states that 60% named climate change and scarce resources as one of the main megatrends over the next half decade. Just behind this was technological advances at 59%. A distant third, at 36%, was healthcare innovation, followed by changing population demographics (26%), a shift in the macroeconomic paradigm (26%), global polarisation (25%), and the maturation of emerging markets (21%).
Elsewhere, the report’s authors said that most believed that inflation will weigh on returns across this time, with the annual rate of return in this period being 5-6%.
Interestingly, respondents from Germany (74%), Italy (70%), and Spain (63%) were far more concerned around climate change than the overall cohort. Despite this incongruence, RBC BlueBay said that fewer than half of German respondents (49%) considered ESG an important investment consideration. Among the Italians, that proportion was slightly higher at 56% and even lower for the Spanish at 48%.
RBC BlueBay wrote: “While fewer than half consider ESG factors an important investment consideration (49%), among this group the Russian invasion of Ukraine and its subsequent supply chain concerns are driving interest in ESG factors (60%). The outperformance of sectors that are traditionally not considered to be ESG-friendly is driving investor interest a lot or somewhat (47%), just below the international average of 51%.”
The firm wrote elsewhere: “Over half (56%) of wholesale investors in Italy think ESG is an important investment consideration. Among this group, the Russian invasion of Ukraine (73%) and, among those who are concerned about the conflict, the attendant concerns about supply chain disruption (60%) are driving interest in ESG factors. In contrast, among those who see no change, 65% say this is led by the outperformance of sectors traditionally not considered ESG-friendly.”
