December 5, 2019 | By: Grace Huang, Carmen Tang, Auritro Kundu, Maksim Piskunov, Stewart Boxall, and Dillon Culhane

2020 Vision

6.5 min read
A new year. A new decade. So, what’s coming into focus for investors? Here are some of the technologies, trends, travels and treatments that could emerge as potential opportunities over the next 10 years and beyond

 

Supercharging the Information Superhighway

By Grace Huang

Fifth generation (5G) wireless technology is at the centre of a controversial debate. Governments around the world are questioning whether the latest advance in telecommunications networks and those who build them pose a serious threat to their national security.

But make no mistake: 5G has already begun to roll out in some countries globally and will have far-reaching implications for investors in the next several years.

5G is crucial to the ongoing development of the digital economy. It is a vast improvement on previous wireless generations and will provide unprecedented bandwidth, speed and capacity for processing the increasingly complex data sets that are needed to fully enable innovations such as the Internet of Things (IoT), Artificial Intelligence (AI), Virtual and Augmented Reality (VR/AR), and automation.

According to IHS Markit, a global research firm, 5G has the potential to impact as many as 16 different industries globally and generate US$13.2 trillion in sales by 2035. This will create investment opportunities in several areas, including for builders of network towers and equipment, semiconductor chip makers, the telecoms, smartphone manufacturers, video game creators and many other consumer-focused companies.

 

Now, It’s Personal 

By Carmen Tang

Giving someone a dose of their own medicine could take on a whole new meaning for investors now that the market for personalized medicine is starting to hit its stride. Nowhere is this truer than in the field of oncology where the science of genomics is pushing the global pharmaceutical industry towards a more targeted, less invasive new wave in cancer treatment.

 

Commencing Countdown

By Auritro Kundu

Commercial space travel is still a moonshot for most investors, but it is moving closer to lift off as the cost of space launches declines dramatically due to investments by a new era of billionaire-backed companies such as Space X, Blue Origin and Virgin Galactic.  By 2040, the industry is expected to reach US$1.5 trillion, or 5% of U.S. GDP, up from US$385 billion in 2017, according to the U.S Chamber of Commerce.

The recent Virgin Galactic public offering sheds light on its “once-in-a-lifetime” spaceflight ambitions that will offer a luxury experience for the rich. The company believes its addressable market will reach 2.3 million people in 2023, which is just 0.1% of high net worth individuals (classified as exceeding $10 million in net worth). By 2023, Virgin Galactic is targeting five vehicles in operation, 270 annual flights, 1,565 passengers flown, and $250,000 fares per passenger – resulting in revenues of $590 million. As the business scales and costs improve due to manufacturers’ efficiencies and technological advances, Virgin Galactic ultimately believes it can target approximately 40 million individuals (with between one and US$10 million in net worth).

 

Closet Disruption

By Maksim Piskunov

There’s no question the role that technology has played in changing the habits of consumers in recent years. Whether it’s hailing a ride, or renting a vacation home, we buy, sell and rent things like no other generation and are constantly looking for new ways of transacting.  

On this front, the next big wave of disruption may be ready to upend what’s in our closets. In recent years, Clothing as a Service (CaaS) or RE-Commerce (resale ecommerce) has become one of the fastest growing segments of the overall apparel and accessories market and it looks set to expand even further given a confluence of trends that go beyond just technological enablement.

First is the search for affordability and elevation of thrift as it becomes more difficult than ever for consumer incomes to keep up in a culture increasingly shaped by “influencers” with expensive tastes.

 

Nothing Artificial About It 

By Stewart Boxall

A decade ago it was thought that a computer could never beat a master Go player. The very complex, 3,000-year-old Chinese game has more possible moves than the total number of atoms in the universe.

But then it happened. In early 2016, AlphaGo, Google’s artificial intelligence (AI)-assisted program, beat 18-time Go world champion Lee Sodol four games to one and just months later, AlphaGo Master, a more advanced version, played 60 professional Go players and beat them all. 

Since that time, AI and related technologies such as machine learning, speech recognition and natural language and image processing has only become more advanced. Not nearly to the point of replacing humans in everything we do, but enough to perform very specific tasks better and much faster than us.

 

The Looming Energy Transition

By Dillon Culhane

As climate change intensifies, momentum is gaining for swift action to reduce global carbon emissions. A major energy transition is necessary to reduce emissions intensity while satisfying rising worldwide energy demand. This transition will require billions of dollars invested in renewable energy, electrical infrastructure, battery technology, carbon capture and storage, and other potential solutions over the coming decades.

The most prominent sources of global carbon emissions are power generation (40%), and transportation (25%), according to the International Energy Agency. Progress has been made in many areas displacing coal-fired power with lower emission natural gas and renewables. Solar and wind power are cost-competitive with coal and gas-fired power in certain geographies, and both are expected to continue growing strongly. However, renewables alone cannot sustain baseload electricity demand in most jurisdictions without a dramatic breakthrough in battery technology. Thus, a combination of natural gas, hydro, and nuclear will remain mainstays of global electricity supply.

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The commentaries contained herein are provided as a general source of information based on information available as of November 30, 2019 and should not be considered as investment advice or an offer or solicitations to buy and/or sell securities. Every effort has been made to ensure accuracy in these commentaries at the time of publication however, accuracy cannot be guaranteed. Investors are expected to obtain professional investment advice.

The views expressed in this outlook are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), Highstreet Asset Management Inc. (Highstreet), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI and Highstreet are registered as portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

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