Navigating a multi-polar world through structural themes in equities

Successful thematic equity investing over the long term hinges on responding to and anticipating the economic and political cycles shaping trends. Shifting national priorities are fracturing the world, altering the investment landscape. Our rethink investments convictions form part of our commitment to identify and exploit the opportunities to match.

In 2024 we introduced six thematic convictions to reflect a changing world in which the most populous emerging markets - China and India - play an increasingly decisive role, and the US and China pursue increasingly domestic interests. Multilateral cooperation is giving way to rising competition, and a push for resilience and autonomy in a range of sectors that are now considered strategically vital.

In economic policy terms, a drive for strategic autonomy is behind a new capital expenditure (capex) cycle. Importantly, this capex is different from historical cycles, which benefitted one particular country or region. In today’s multipolar world, we expect capex to be more evenly distributed across many regions.

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Mid-year forecast review and outlook

June 3, 2025

In a more competitive world, the technology, energy, food and health sectors take on particular strategic importance. Competitiveness, innovation, affordability and broader access is critical. Importantly, this shift does not imply that sustainability takes a backseat. In contrast, new sustainability champions come to the fore reflecting national priorities and commercial interests. This is becoming apparent as China positions itself for leadership in this area.

In a more competitive world, the technology, energy, food and health sectors take on particular strategic importance

Within each theme, we continuously adjust our investment targets as political developments influence sectors and companies. Hence, we review which investment targets remain unchanged within these themes. In 2025, we have added security infrastructure, infrastructure security and space infrastructure. Our rethink longevity theme requires greater stock selectivity, particularly for the healthcare sector. We have also minimised the theme’s cyclical consumer angle, as we expect this year to deliver a slower global economy, driven by new trade barriers. Within rethink net zero, we focus on materials and construction, and adding rail mobility as a counterbalance to the slowing adoption of electric vehicles. For rethink nature, we focus more on the water supply chain which we view as the most mature and investable sector in listed equities.

What is the impact on our rethink investments themes?

Our rethink investments framework builds on six research-led, high conviction investment themes:

1. rethink longevity. The ‘longevity economy’ creates investment opportunities in the healthcare, financial, and consumer sectors. Affordable and more accessible treatments, changing diet patterns and obesity drugs all impact the medical sector with implications for financial services, housing and consumer goods.

2. rethink new gen. Gen Z, born between 1997 and 2010, will become the demographic group with the highest spending power worldwide by the end of this decade. The majority of this cohort’s 2 billion people are tech savvy, prolific on social networks and embrace AI. They are also largely based in emerging economies, and will shape future global consumption patterns across tech, media and health.

3. rethink technology. Artificial intelligence carries the potential to revolutionise almost every aspect of human life, possibly contributing to solutions in complex areas from climate change, to disease prevention and treatment, autonomous vehicles, automated manufacturing, predictive maintenance and productivity gains. Greater affordability and more numerous applications could generate a boom in demand for computing resources across many industries.

We believe that the fundamental transitions reshaping the global economy warrant a re-assessment of long term investment opportunities

4. rethink net zero. Despite challenges, the transition to net zero continues, led by China and a global move towards autonomy, safety and affordability. We see opportunities in energy, with selectivity in regions and supply chain positioning. Clean mobility solutions, and alternative, low-carbon construction materials are emerging that will replace more wasteful steel, concrete and plastics.

5. rethink nature. Shifting national strategic priorities mean that progress globally towards recognising the positive value of natural assets has slowed, and the world continues to breach its sustainable limits. China has become a leader in a number of sectors, including increasingly high profile concerns around water treatment and testing.

6. rethink infrastructure. Many governments are addressing the need to renew ageing infrastructure across communications, energy, water, and transportation sectors. Investment needs globally have been estimated at USD 94 trillion globally by 2040. Faced with a fractured and multi-polar world, there is a clear shift in governments’ strategic priorities, creating an urgency to bolster national resilience and autonomy through subsides and incentives to develop sustainable infrastructure.

We believe that the fundamental transitions reshaping the global economy warrant a re-assessment of long term investment opportunities. Tactical portfolio positioning to capture shifting market trends needs to be complemented by exposures to the structural forces driving long term economic outperformance.