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UBS highlighted four sectors including the 5G Network technology, blockchain and digital payment technology, healthcare and green energy industry.
After a decade of tech and consumer stock success, UBS Wealth Management thinks it is time for investors to look out for different sectors in the next few years that are more promising. This is according to Mark Haefele, chief investment officer at UBS Wealth Management.
Haefele highlighted that if the past has something to teach us, then predicting the next few years is much easier. According to him, after a decade of outperformance, the tech and consumer sectors stand a 25% chance of becoming one of the two worst-performing groups over the next 10 years.
Ostensibly, he stated that they only have an 8% chance of repeating the same success rate. Hence the need for looking out for a new investment opportunity.
Fueled by the ongoing coronavirus market crisis, investors are advised to be diligent before investing their capital in different stock markets. The unpredictable nature of the crisis leaves most businesses prone to market uncertainty. Moreover, we are still months away if not weeks for a viable vaccine to be approved for mass use. Therefore complicating the situation on the ground as businesses struggle to keep up with the coronavirus restrictions.
According to UBS Wealth Management, investors should seek out disruptor stocks in the next decade. “We think the next decade will reward investing in the disruptors in sectors undergoing technological transformation,” Haefele said.
UBS Wealth Management: Options for Investors
UBS notes that there are sectors that the economy cannot ignore in the next decade to recover from the coronavirus crisis. The said sectors have been hot topics during the pandemic and are going to be the baseline for most businesses.
UBS Wealth Management highlighted four sectors including the 5G Network technology, blockchain and digital payment technology, healthcare industry, and green energy industry.
With the leading smartphone companies including Samsung Electronics Co Ltd (KRX: 005930), Huawei and Apple Inc (NASDAQ: AAPL) having 5G network phones in the market, it is inevitable for telecommunication companies to switch to the latest network capabilities.
Once 5G becomes the new standard, firms that can build novel use cases present alluring investment opportunities, Haefele said. The blockchain and digital payment industry promise to revolutionize the banking sector in the next few years. Digital currencies reduce usage of fiat money that are considered to aid coronavirus rate of contagiousness.
“Once consumers have grown accustomed to using primarily digital payments, many will not revert to traditional means,” Haefele said, adding growth in digital payments will land in the “low teens” over the next decade.
As for the healthcare sector, UBS thinks a lot of focus will be channeled to the sector in the next ten years. Primarily to develop drugs and vaccines for contagious diseases like coronavirus.
UBS Wealth Management highlighted that investors should focus on the green energy sector as governments push adoption of alternative energy sources like the electric vehicle industry.