2020 Vision

Competition among nations will also be fierce in the coming years. While South Korea was the first country to launch 5G mobile service in April 2019, over the next 25 years, the U.S. and China are expected to account for 53% of the total average investment in cellular research and development (R&D) and capital expenditures in the 5G mobile value chain, IHS Markit says.

All in, the global wireless industry is expected to gain hundreds of billions in incremental annual revenue over the next decade. This is in part because telecom firms may regain lost pricing power as the result of new opportunities in enterprise and industrial segments of the market, as well as increased consolidation.

It should be noted that 5G isn’t clear of caveats. Ongoing security concerns may continue to slow down the global 5G roll out, as might persistent worries about the huge upfront costs of building out the next generation of networks. Still, it’s hard to see a future without it.

Grace Huang is Associate Portfolio Manager at AGF Investments Inc.

Advances in genetic testing, for instance, may soon result in a new standard for therapy selection in lung cancer patients, whereby tissue biopsies are replaced by the prick of a needle to determine a tumour’s unique protein biomarker and the drug most suitable for treating it.

Liquid biopsy tests, as they are commonly known, may improve monitoring of individual responses to certain drug therapies as well, including those that work by boosting a patient’s own immune system. Immunotherapy can cause tumours to grow larger before eventually shrinking as cancerous cells are killed, making computerized tomography (CT) scans problematic. But by tracking the amount of tumour DNA circulating in the blood, a patient’s response to the treatment can be accurately determined at an earlier point in time.

A simple draw of blood is also proving capable of detecting the recurrence of certain cancers in a timelier manner than current methods that also rely heavily on CT scans. In one such test, tumour tissue is sequenced to identify the most common genetic mutations found in a patient’s primary tumour.

By some estimates, these applications have a potential market value somewhere near US$21 billion, but that doesn’t fully consider liquid biopsy tests that may soon enable detection of cancer in asymptomatic patients. 

It may take a while for personalized medicine and DNA sequencing to reach a critical mass, but the wait time may be worth it.

Carmen Tang is Equity Analyst at AGF Investments Inc.

SpaceX, meanwhile, has already agreed to take Japanese billionaire Yusaku Maezawa on a tourist trip to the moon with the mission expected in 2023.

The scope of the commercial space age will introduce reusable spacecrafts, new hybrid rocket motors, improved re-entry mechanisms, and miniaturisation of electronics – all key to driving costs down. Due to reusable rockets, the cost of space launches could fall by a factor of 100, according to research from Bank of America. Much bigger rockets can reduce costs further and could lead to other longer-term space innovations, such as intercity travel. If 10- to 12-hour long-haul flying times between global cities could be cut to two or three hours, there could be a market for such services, especially at the high-end bracket, ultimately impacting the airline industry.

It remains to be seen, however, what impact space travel will have on investors and their portfolios. But the countdown to finding out is on.

Auritro Kundu is Equity Analyst at AGF Investments Inc.

The second trend is the growing focus on sustainability as climate change concerns take centre stage in public debate. At least two-thirds of GenZ shoppers have made an eco-friendly purchase in the past year, according to a CGS survey. And faced with a backlash against excess consumption, some of the biggest fast fashion brands in the world now offer clothing recycling to maintain relevance. 

There is also the growing desire for novelty and variety, with 56% of 18-29 year-olds preferring retailers who offer something new every visit, according to a Global Data survey.

As a result, second-hand apparel is growing in acceptance, particularly among younger shoppers. This, in turn, is fueling a growing luxury consignment market and has several clothing brands—both mainstream and otherwise—experimenting with more rental sales of their merchandise, as well as subscription services in hopes of creating greater loyalty and better margins.    

Not everyone will benefit from this latest disruption. But those retailers who can get it right will be in good position to gain a bigger share of our closets.

Maksim Piskunov is Associate Portfolio Manager at AGF Investments Inc.

In turn, it has become integral to enabling some of today’s most anticipated technological advances, including those that will shape our transportation, manufacturing, healthcare and investment industries for years to come. By 2025, the market for AI is expected to reach nearly US$209-billion from US$24-billion in 2018, representing a compounded annual growth rate of 36% over that period, according BrandEssence, a market research firm.

AI will be front and centre in several new investment opportunities and will also help investors increasingly with their decision-making. In fact, as complex as the game of Go is, the investment world is much more complicated, and machine learning, as well as natural language processing, is already helping asset managers integrate more alternative sources of data into their research.

This includes unstructured information such as satellite imagery of parking lots to gauge real-time supply and demand metrics, as well as earnings call transcripts to gauge executive sentiment.

And so, while AI remains far from ubiquitous, it has long passed Go and will have a growing influence on our lives over time.

Stewart Boxall is Manager, Technology Development at Highstreet Asset Management Inc.

For transportation, electric vehicles (EV) are an obvious solution for reducing emissions, but EV adoption varies dramatically by region based on government policies, subsidies, demographics, income levels, weather and range requirements. It is much more challenging to electrify heavy-duty freight (trucking, rail), marine shipping, and air travel, which will all rely on fossil fuels for decades to come. Continued improvements in fuel efficiency, the use of liquefied natural gas, and biofuels (from waste, animal fats, algae) can all reduce emissions intensity here.

Carbon capture and storage (CCS) technologies will also help in meeting net-emission reduction goals. These involve capturing and storing carbon, usually in underground geological formations, effectively creating negative emissions to offset sectors that are difficult to de-carbonize; such as certain industrial processes (cement, steel-making), heavy-duty transportation, and air travel.

While the energy transition doesn’t spell the complete demise of fossil fuels, it is clearly creating opportunities to benefit from increasing investment in renewables, batteries, and emissions-reduction technologies.

Dillon Culhane is Equity Analyst at AGF Investments Inc.