Morningstar’s five key investment themes for the next decade

AI, genetic health care innovation and enabling the energy transition are among the five trends Morningstar lists as key for this decade.

Investors in global markets had much to absorb in 2024. Elections around the world dominated much of the news during the year, coupled with ongoing geopolitical tensions and frequently disappointing economic news. Consequently, “volatility” was the investment word of the year.

But with a longer lens view on investment, particularly for those focusing on building long-term portfolios, a number of trends are emerging that offer new opportunities. Morningstar lists the emergence of disruptive AI, rise of genetic innovation in health care, return of value from companies that make things and the global energy transition from polluting to clean sources as key economic trends this decade.

“There is already a lot of hype in the market around these themes, so we need to select investments carefully, even though the future looks bright for these industries,” Ethinvest’s Trevor Thomas says.

“Artificial Intelligence presents particular challenges – as there are significant risks attached to the increasing power of AI, and its applications,” he said. These have potentially significant upside for people and plant but can also be put to nefarious uses. Quite apart from that, the impact of AI on workplaces and the nature of work is the subject of great speculation and some anxiety, and we need to look at how to ensure that the benefits of technology are shared more equitably than has been the case to date.”

“Inequality and the polarisation of wealth are significant drivers of discontent and social unrest,” says Thomas. “In the short term the cost is born by those missing out, in the longer-term the impact of that unrest is felt by everyone, as can be seen in the rise of populist leaders around the world, offering simplistic answers to complex problems.”

For a full read of Morningstar’s insights, see their website.