What are megatrends?
Megatrends are fundamentally and sustainably changing the world
Our world is developing more dynamically than ever before. It’s impossible for anyone to predict exactly how the future will look. However, there are some emerging developments that have the potential to fundamentally change the world in a lasting way – so-called megatrends. Megatrends affect more than just a few specific areas: They have an impact at all levels of society and on individuals as well.
Megatrends don't just affect a few specific areas, they impact all levels of society, including individuals. To keep up with the future, companies need to quickly respond to these developments or ideally anticipate them. Companies that achieve this are of great interest to investors because they represent future viability and growth. The Raiffeisen-MegaTrends-ESG-Aktien is a global equity fund that invests in such companies.
Megatrends not only provide an indication of what the future may hold, but also consistently create new investment opportunities. Characteristic aspects of megatrends include:
Long-term growth: Megatrends affect all levels of society. Companies that either anticipate these trends or can react to them quickly offer potential for long-term growth.
Innovation: Megatrends offer the opportunity to invest in innovative companies that focus on pioneering topics.
New business models: Some megatrends, such as AI, offer the potential for entirely new business models.
There are multiple, often interconnected megatrends. Raiffeisen-MegaTrends-ESG-Aktien strives to identify the major, long-term trends that will significantly shape our future and successfully invest in them. In the process, this global theme fund focuses on three main topics:
demographic change,
climate change, and
technological change.
These three megatrends also encompass a wide range of promising subtrends:
Demographic change is an inexorable reality that entails both challenges and opportunities. The spectrum of subtrends in this segment ranges from themes such as ageing and work-life balanceto urbanisation and many other areas, including smart food, animal well-being, and telemedicine.
Climate change requires urgent action in order to stop or slow global warming. More sustainable and environmentally friendly agriculture and food play a major role here, but are also important themes in their own right, particularly investments in green technologies and renewable energy. In addition to the latter, electromobility, energy efficiency, water scarcity, and plastics and recycling are key subtrends.
We are confronted with the megatrend of technological change particularly often in our day-to-day lives, and last year alone, one subtheme was of particular interest for investors: artificial intelligence(AI). The digital revolution is changing our world at a pace that has never been seen before. Some technology companies are taking on key positions because they operate in especially lucrative fields. Current promising subtrends in this area apart from AI include cloud computing, 5G, cybersecurity, gaming and streaming, semiconductors, and automation.
More details about the megatrends
How can you invest in megatrends?
Raiffeisen-MegaTrends-ESG-Aktien is a global thematic fund focussing on the three megatrends of demographic change, climate change and technological change, which each make up a third of the portfolio.
Careful selection of individual securities is also crucial for megatrends
A solid understanding of the subject matter and close observation of the markets, political developments, and (technology) trends are needed in order to make adjustments at the right time if necessary. The actively managed Raiffeisen-MegaTrends-ESG-Aktien fund is ideal for this. It is a good choice for investors with a long-term investment horizon who not only want to participate in megatrends but also want to support responsible investment at the same time.
Raiffeisen-MegaTrends-ESG-Aktien
Fund manager Günther Schmitt gives a brief overview of the fund, which companies it invests in and who might be interested in the fund.
Opportunities abound, risks remain
Along with offering solid potential returns, megatrends also harbour risks. The equity markets have been characterised by substantial price volatility in recent years, and this is expected to continue in the future, as well. While technological change is driving growth, it can also very quickly disrupt or destroy companies’ market positions. Intense competition can lead to oversaturation of the markets and subsequently to declining corporate earnings and stock prices. Regulatory interventions can also significantly change the business environment. Some companies will still need a long time before they generate profits. These companies’ stock prices are often susceptible to setbacks in the event of significant increases in interest rates. This effect has also been seen in recent years.
What you need to know about Raiffeisen-MegaTrends-ESG-Aktien
When is the best time to start investing?
Now! Because fund prices fluctuate based on market movements, you acquire more fund units for your regular deposit in some months and fewer in others.
Is there a minimum commitment period?
No, there is no minimum commitment period for funds, but there is a “recommended minimum holding period”. This is based on the price risk of the given fund and provides a point of reference for how long your investment horizon should be in each case. Price fluctuations and capital losses are possible even if the recommended period is observed.
Full potential only unfolds over the long term
Investors need patience, because – by nature – megatrends progress slowly and only exhibit their full potential over a longer time frame. Consequently, in order to achieve the best possible returns it is important to have both an adequately long investment horizon and patience for the long run, in order to outlast the weak phases on the markets that are always bound to occur at times.
Current development of megatrends equities
Megatrend equities have experienced several volatile and at times challenging years, much like the stock markets in general. In the meantime, the globally invested megatrend equity fund has significantly recovered from the downward corrections of previous years. What is the current situation and what prospects are there for the coming years?
The fund Raiffeisen-MegaTrends-ESG-Aktien exhibits elevated volatility, meaning that unit prices can move significantly higher or lower in short periods of time, and it is not possible to rule out loss of capital.
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