28 Sep 2020

Tomorrow’s global leaders

Liam McLachlan

Associate Investment Manager

My view of the biggest trends of 2020

In years to come, when we look back at 2020, many will understandably dwell on the pain caused by the pandemic. Optimists, however, will view the year as one of great disruption, marking the beginning of the end of carbon, the digitalisation of working environments, and the new age of consumer habits.

 

The paradigm shift of 2020 will in turn produce the next generation’s global leaders and it is vital that long-term investors position themselves accordingly.

The rise of renewables

Undeniably, renewables and the electrification of transportation will have a profound impact on financial markets over the coming decades. In the first three months of 2020, 47% of the UK’s electricity was sourced from renewable energy, which forecasts predict will rise to 76% by 2050.

 

Tesla (now classified as an electric car, autonomous driving and solar energy manufacturer) recently announced it is “very close” to reaching level 5 autonomous driving. Although it seems highly unlikely that we will sit as passengers in our own self-driving cars for a number of years, this has not prevented Tesla from rising 6-fold since its Covid-19 low, as investors look to the future.

 

The future of communications

Readers will have no doubt immersed themselves in a variety of new technologies throughout lockdown, whether that be Microsoft Teams while working from home or Zoom quizzes with friends and family. The requirement for millions of commuters to pack onto overstretched transport networks each day is behind us.

 

This transition will only accelerate as more industries are forced to adapt and modernise, in turn bringing more software, more laptops, more smartphones, more cyber protection, more broadband capacity (and more headaches).

47%
Percentage of UK's electricity sourced from renewable energy in 2020
76%
Forecasted percentage of UK's electricity sourced from renewable energy by 2050
The ‘new normal’ for consumers

From a consumer standpoint, changing trends are more visible. Artificial intelligence, e-commerce, online banking, cashless transactions, digital doctors, streaming services and supermarket deliveries have transformed everyone’s lives. People who were previously intimidated by digital technology, or who preferred older methods of shopping, have now been converted. In fact, I introduced my mother to Netflix over lock-down -  a technology she had previously dismissed as unnecessary. Funnily enough it only took her four days to finish The Crown.

What this means for your investments

Capitalising on such trends is paramount to meeting our client’s investment objectives, whether they might be in their early stages of wealth accumulation or later in retirement. We are in the midst of a technological transformation and we must not sit still while tomorrows global leaders are formed.
 

 

1  Department of Business, Energy and Industrial Strategy report – Energy Trends June 2020.

2  https://www.renewableuk.com/news/508787/Report-highlights-role-of-renewable-hydrogen-and-growth-of-wind-power-in-UKs-future-energy-system.htm#:~:text=By%202050%2C%20RenewableUK%20predicts%20renewables,fuels%20like%20gas%20or%20petroleum.

About the author

To contact or read more about Liam McLachlan, visit his biography here.

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