Three investment trends shaping the market

Wall Street: — © AFP SAM PANTHAKY

In an interview (via CMC Markets), Jay Jacobs, US Head of Thematic and Active Equity ETFs at BlackRock, describes three so-called “investing megatrends.” These trends are said to be changing the economic world. The trends are meant to represent powerful and transformative forces that could change the global economy, business and society.

Additionally, Jacobs outlines where investors can gain the best investment exposure to these growth trends.

What are the three areas that Jay Jacobs considers the “drivers of progress”?

Jay Jacobs: The industrial renaissance, the power of the wallet, and the outcome of post-COVID-19 medicine that is “one of the transformational changes happening in the healthcare space.”

The power of the wallet is best understood as growing consumption, which has been driven by the growth in purchasing power of millennials and increased consumption in still emerging markets. The industrial renaissance grew out of the underinvested industrial side of the economy – which became problematic. This has led companies to increase their investments in digitizing supply chains to cope with rising manufacturing costs.

What are the most interesting areas for investment?

Jacobs: I’m most excited about the infrastructure, automation and robotics, and electric and autonomous vehicle spaces because “we’ve only scratched the surface of it.” There are many different expressions of AI, whether at home or at work, but they are all very supportive of GDP growth in the future. Nevertheless, it is difficult to predict its power exactly, because AI is a tool that we can apply to so many different sectors of the economy.

Where does BlackRock come from in all this?

Jacobs: BlackRock iShares Robotics and Artificial Intelligence Multi-Sector ETF [IRBO] looks at various segments, including robot makers, developers of AI technology and the hardware that powers it.

On the industrial renaissance side, the fund issuer offers investors exposure to US-based infrastructure assets and catalysts through its iShares Global Infrastructure ETF. [INFR] and the EV/AV space via the iShares Self-Driving and Tech ETF [IDRV].

Each of these funds looks at the whole ecosystem behind these themes. It is not one company or one segment, it is several segments that we see benefiting from the rise of these powerful megatrends.