Investment trends in AI and robotics will define this decade

Investment behavior and preferences keep changing as the market moves and the economy evolves. Investment advisors who read them correctly are better equipped to offer clients thematic solutions to achieve their financial goals and objectives.

A recent survey conducted by financial services solutions provider The Continental Group indicates the key investment trends that will dominate the market in the future. It highlights megatrends, thematic stocks and wider adoption of smart technologies as shaping the post-pandemic investment ecosystem.

Seven out of 10 respondents agreed that technology trends such as artificial intelligence, robotics and related services are the top themes that will dominate investment.

A quarter of respondents opted for ESG (environmental, social and governance) impact investing; while a small fraction (3%) opted for security-related areas. Most respondents agreed on the long-term growth potential of thematic investing in equities and fixed income.

The results

  • In the current investment climate, diversified approaches within specific risk buckets can help build sustainable portfolios;
  • Using traditional bond and equity strategies means that investors may not get the kind of return they are hoping for;
  • ESG will find greater acceptance in general asset allocation;
  • Thematic investing can be an attractive source of alpha, but investors may be slow to recognize thematic drivers and not unleash the power of a theme with long-term growth;
  • Explore investment avenues across the theme value chain;
  • With the meteoric rise of connected devices – all generating more and more data – the topic of technology holds promise, especially in the context of AI and robotics.

Ascent after slowing down

Neelam Verma, vice president and chief investment officer at The Continental Group, said the findings were based on a recent online discussion and survey bringing together leading voices from across the financial industry, to share their expertise and demystify the strengths of the market that influence post-pandemic investments.

“There has been a recent increase in investment activity after a prolonged downturn due to the pandemic. We’ve noticed that living in a pandemic is the new normal for most investors. Investors are looking beyond bank deposits, which were a short-term phenomenon at the advent of covid-19.

The new wave also comes with a renewed outlook for the market, an increased focus on AI and robotics, and an accelerated shift to thematic investing,” she said.

Esty Dwek, Head of Global Market Strategy at Natixis, said: “Unlike conventional investment vehicles, thematic stocks and ESG-related funds have proven more resilient to the headwinds of the pandemic. It was a precursor to the broader shift towards megatrends around investments in the environment, water security, green cities and AI, which have significant long-term relevance.

Bullish outlook

Indian markets have maintained a bullish and optimistic outlook over the past 18 months. The rapid economic recovery from Unlock 2.0, strong economic data, improved business performance year-on-year, expectation of large numbers of vaccinated adults, strong retail investor participation in both mutual funds and IPOs have given impetus to Indian stock markets

Fundamentals remain strong in India, which has led to positive momentum in major markets, which is expected to continue. Smart money and retail money have flowed freely in the market despite overvaluation fears as fear of losing yields dominates market sentiment.

Any new policy or a third wave of covid can play spoilsport and disrupt momentum and lead to a correction leading to losses for investors.

“Our advice to investors is to exercise caution, stay within their risk tolerance limits and take financial advice/advice from their financial advisors on their investments,” Verma said.

Diversify the portfolio

“Our advice to NRI investors is to diversify their portfolio, stay focused on their asset allocation, book profits in line with set targets, avoid greed under peer pressure and not increase their risk levels. due to market rallies.

“A diversified portfolio of mutual funds, including multi-asset funds and direct equities, should be part of an NRI portfolio,” Verma said.