Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

 

 

Invest

Emerging markets: 5 pandemic-proof sectors set for growth

  • September 09 2020
  • Share

Invest

Emerging markets: 5 pandemic-proof sectors set for growth

By Grace Ormsby
September 09 2020

As the world continues its migration online due to COVID-19, emerging markets will reap the benefits and open up new avenues of investment for savvy investors, according to an investment management firm.

5 pandemic-proof sectors set for growth

Emerging markets: 5 pandemic-proof sectors set for growth

author image
  • September 09 2020
  • Share

As the world continues its migration online due to COVID-19, emerging markets will reap the benefits and open up new avenues of investment for savvy investors, according to an investment management firm.

5 pandemic-proof sectors set for growth

American Century Investments’ senior portfolio managers Patricia Ribeiro and Nathan Chaudoin have highlighted that structural shifts in consumer behaviour across China and emerging markets have seen the rapid increase of e-commerce, internet penetration and digitalisation.

With COVID-19 having “profoundly affected” how we live, the pace of digital adoption will only quicken as remote working and online learning come to the fore, while e-commerce continues its expansion.

Notably, Ms Ribeiro and Mr Chaudoin said the pandemic has already created “long-term structural changes in consumer behaviour beyond e-commerce, including remote working, distance learning and virtual healthcare”.

The portfolio managers said tech companies whose products and services address the needs created by these trends will be likely beneficiaries into the future.

Advertisement
Advertisement

So, what areas are likely to benefit?

  1. Remote working

“Forced to work from home, individuals need better software and more reliable internet access,” the portfolio managers outlined.

There’s already been an explosion in the use of online collaboration and communications tools.

Ms Ribeiro and Mr Chaudoin said beneficiaries of the trend include companies that offer IT services, cloud-based technologies, servers, data storage, networking logic and memory.

  1. Biking

There’s been a reluctance to use public transport the world over since the pandemic began, which has led to a surge in demand for both traditional and electric bicycles (e-bikes).

According to the investment experts, online searches for bicycles have increased more than 500 per cent since March alone, while demand is “widely” outstripping supply.

They also noted that makers of scooters and e-bikes have benefited from the increase in demand for food delivery with indoor dining by the wayside.

  1. Telehealth

For the first time, virtual medical visits are becoming big business, as healthcare apps also rise in popularity.

Ms Ribeiro and Mr Chaudoin have flagged China as one such market where telehealth has taken off – with online consultations now expected to grow by 40 per cent each year through to 2026.

“We expect this trend to continue to soar as patients become more comfortable with telehealth and more appreciative of the convenience of online visits for routine care.”

Adding to the popularity is the fact that in emerging markets, medical institutions may not be able to meet heightened demand for in-person healthcare visits due in part to the uneven distribution of resources.

Cleanliness and hygiene has also cemented its place as a top priority, which the portfolio managers expect will persist post-pandemic.

While the use of surgical gloves for personal protection remains low in key areas such as China and India, the investors “expect demand for gloves in healthcare facilities and for personal use to continue to increase”.

  1. Remote learning

Ms Ribeiro and Mr Chaudoin predict the long-term impact of the pandemic on education to be “profound”.

“Approximately two-thirds of students (around 1.2 billion people) have been affected by pandemic-related shutdowns, according to UNESCO data, so remote learning has escalated,” they flagged.

“We expect this move towards adoption of remote education to continue to fuel the structural shift from in-person to online learning.”

  1. Media consumption

A new culture of staying at home “has radically changed how people consume media and entertainment”, the portfolio managers flagged.

With the exponential increase in streaming of music and video, as well as the heightened engagement with online gaming, Ms Ribeiro and Mr Chaudoin said online advertisers, streaming content providers and online gaming platforms “are notable beneficiaries” at this point in time. 

Emerging markets: 5 pandemic-proof sectors set for growth
5 pandemic-proof sectors set for growth
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article

About the author

author image

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

more on this topic

more on this topic

From the web

Recommended by Spike Native Network

More articles

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.