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Investment strategy
January 27, 2021
1 min

Investing with a Thematic Lens

January 27, 2021
1 min
Archie Foster
Co-Head of Global Equities, Citi Investment Management
Wietse Nijenhuis
Equity Client Portfolio Manager
Aerial view of water dam
SUMMARY

Once considered a niche, thematic investing has gone thoroughly mainstream as investors have come to understand that certain trends are investible irrespective of economic conditions.


A quick look at a few facts highlights the expansive opportunities created by just two of the themes Citi Investment Management’s Co-Head of Global Equities Archie Foster, Senior Portfolio Manager Wietse Nijenhuis and Senior Equity Portfolio Manager William Mann explore in this white paper.

Increasing longevity:

By 2050, more than two billion people will be over 60 years of age.80% of people over the age of 65 have at least one chronic condition, and 77% have at least two.2

The ‘very senior’ population, the number of over-80s, is projected to more than triple, from 137 million to 425 million by 2050, concentrated in developed nations.An 80 year old consumes six times the health care that is consumed by a 59 year old.4

Global consumerism:

By 2030 an estimated 5.3 billion people will belong to the global middle class, representing an additional 2 billion people compared to today; in China alone over 70% the population in 2030 could be middle class.5

The collective increase in spending power from this segment is expected to grow from $37 trillion in 2017 to $64 trillion in 2030.6

Thoughtful thematic investing may prove to have profound, positive investor implications. As important, in our view, will be avoiding negative implications with excessive portfolio exposure to businesses and sectors most likely to be impacted negatively by themes.

1 United Nations, World Population Prospects, 2019
2 National Council on Aging, Healthy Aging Facts, 2018 Fact Sheet
3,4 The Organization for Economic Co-operation and Development (OECD), OECD Statistics, 2018
5,6 European Commission, Knowledge for Policy: Growing Consumption