A wealth of investment opportunities in a changing world

Cloud computing opens the door for new business models, as it lets consumers pay for a subscription that gives them access to all the software they need over the web, rather than buying licenses upfront and installing it on their own computers.

Some creative new companies have learned to capitalize on the many different sources of revenue from such trends. These have naturally been gaining our attention and winning a place in our portfolios.

Genomic Medicine

Technological advances often lead to scientific discoveries that change how illnesses are treated, creating breakthrough investment opportunities. In the 1940s, advances in chemistry spurred the development of life-saving antibiotics and the birth of the pharmaceutical industry.

Science is now crossing a new medical threshold. The mapping of the human genome is paving the way for treatments tailored to each person’s specific needs. Researchers, scientists and doctors are working to predict which diseases will affect us and prescribe treatments for the most stubborn—from heart disease to cancer.

We are now uncovering the companies we believe will thrive in this new era of personalized medicine—and those that may be left behind.

Heightened Cyclicality

We believe the massive stimulus efforts underway will help revive the global economy. But we also believe they may lead to a more volatile business cycle.

To combat potential inflation, governments will be forced to take tough measures to remove excess liquidity from the system. As a result, we may see a return to the shorter and sharper economic cycles of the 1970s and early 1980s, which were driven largely by monetary and fiscal policy.

This intensely cyclical environment is likely to lead to many new investment opportunities. Companies with strong balance sheets should be able to capture market share from weaker rivals. At the same time, we are positioned to capitalize on opportunities arising from the various economic scenarios that may occur.

(Re)Emerging Middle Class

For the first time, more than half the world’s population is categorized as middle class, thanks to rapid economic growth in emerging countries like China and India. Newly wealthy consumers in these countries are buying branded products, luxury goods and spending more on entertainment.

Companies selling goods in these growing markets are moving production closer in an effort to reduce costs—and have been reaping greater profits as a result. Identifying and selecting companies in developing and developed countries that can cater to the demands of the new global middle class is one of our primary areas of research.

Climate Change

The threat of destructive climate change is prompting governments, communities, companies and individuals to act now. Governments are developing new regulations to reduce the emission of climate-warming gases like carbon dioxide, and these regulations are in part stimulating investment in the area.

We believe the investment winners from the burst of creativity sparked by the need to combat climate change will extend beyond the more obvious companies such as wind power providers, and will likely include power equipment makers, hybrid vehicle manufacturers, electric utilities and construction and engineering firms.