“Is it a digitally enabled business, like cloud computing, or e-commerce or video games and e-Sports? Those companies did fantastically well because people were at home and they had an internet connection, and that was pretty much their only access to the outside world.”
Firms that focused on having a physical presence and needing physical contact with people are suffering, of course, creating a digital versus physical divide. This taps into thematic investing’s core principle of high-growth potential.
For thematic believers, Jacob offered encouraging words for the future. For those carving out 10% of their equity portfolio for long-term, slightly more volatile thematic growth, he believes many of the trends that have exploded during lockdown will continue because we’ve started to see structural change in the economy. For example, many millennials expect to work from home more, while many business expect to cut back on travel. Scores of folk will carry on doing their groceries online.
The pandemic, therefore, is a catalyst for long-term change in how people conduct their everyday lives. Global X carried out research on the “reopening economy”, which is differentiated from the “stay-at-home economy”. The reopening, essentially, is about balancing economic growth with safety, and looking at the areas positioned for safety and flexibility.
Jacobs said: “If you look at the genomic space as a theme, that’s been critical to the pandemic. Since the beginning, all the testing and vaccine development had a lot to do with genomic sciences and the field of genomics.
