The Supertrends to enhance your returns

Andrew McAuley

Credit Suisse

At our recent Global Supertrends Forum, we had three panels discussing what we call Supertrends. These are the long-term themes we believe reflect societal change, and so provide attractive investment opportunities. The particular Supertrends discussed were: Anxious Societies, Decarbonisation, Millennial Values and Infrastructure.

Our first speaker Dr Parag Khanna, world renowned futurist and author, spoke about how supply chain security has been a focus for the different regions in the post-Covid recovery. Not just the supply of manufactured goods, but also energy, water and food have received added attention. This is an example of our Supertrend “Anxious Societies”. Covid has reinforced a preexisting trend. Due to polarisation along country and regional lines, governments and societies have become focused on shoring up the supply and transport of critical goods and commodities. Expect to see more onshoring of manufacturing and less specialisation along supply chains. Domestic producers are likely to be favoured by policy and consumer preferences. 

Longer term, climate change is impacting migration patterns and food production. It may surprise you to know Russia is now the world’s largest producer of wheat. Parag sees the winners as those companies and nations developing agri tech, eco tech and renewable energy. This aligns with our Supertrend “Decarbonisation”. In a post-Covid world, talent will become even more mobile as remote working has become an accepted reality. Millennials, particularly in Asian countries which have a youthful population cohort, are demanding flexibility. In order to attract talent, and in order to attract international students, nations and businesses must provide the pathways, technological infrastructure and flexibility. 

Our Supertrend “Millennial Values” is particularly pertinent to Australia as we compete to attract international students back to Australia.

Our second panel heard from Kara Frederick, of Tritium, the soon to be listed Australian fast charging company, and Annie Liu previously from Tesla, that Electric Vehicles (EV) are certainly part of the answer to decarbonisation. The transition to EV’s appears unstoppable but the world is only in the early stages. There are a few speed humps to overcome in terms of fast charging technology, standardisation, range anxiety and the raw materials required. But Australian company Tritium has shown what is possible with the right technology and infrastructure. It is also an example of how Australian companies can lead the transition to EV’s. Of course, Tesla has been leading the EV revolution for some time now and is focused on improving the energy density (charge life) of its batteries where it appears to have an advantage.

The final panel centred on another of Credit Suisse’s Supertrends in “Infrastructure”, both the need to renew and create. The need to decarbonise, to transition to renewable energy, to prepare for climate change has opened a universe of new opportunity. Likewise, the changes created by Covid have accelerated some trends. These investment opportunities are called sustainable infrastructure. Certainly, low interest rates mean that there is competition for good investments which has led to the expansion of what is considered infrastructure. The phrase “infrastructure plus” refers to businesses or assets with annuity style revenues that may not have been considered true infrastructure in the past. It has also led to a green premium, but this is likely the new normal. The expenditure required to electrify the world economy for example and decarbonise supply chains is so massive that there are certainly many opportunities to participate.

The below video contains the highlights of our Supertrends conference, we hope you find it interesting.

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Chief Investment Officer
Credit Suisse

Andrew McAuley is a Managing Director of Credit Suisse Wealth Management Australia. As Chief Investment Officer, he is responsible for developing discretionary and advisory investment strategies across multi asset class portfolios for clients in...

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