Your future; our research; shared technology
The 10-strong Polar Capital Global Technology team has spent the past year and more working at home (WFH), maintaining the quality of their research throughout. Technology is at the heart of this, allowing them to work from home in the first place as well as driving change in the future – and it is this change that these eight investment themes highlight. It has been a pivotal year for technology, from the growth of e-commerce, seeing the true potential of 5G, the uptake in gaming during lockdown (that is set to continue), through to improvements in the delivery of healthcare, taking payments and providing education.
Explore the team’s insights into each of these themes and what the future may bring us through each one.
Rollout of 5G started in 2020, with several new technologies required for a successful network.
The demise/boycott of Huawei has created a market-shift opportunity for big players like Nokia, Ericsson and Samsung.
Livestream video gaming, AR and AV all need 5G to some extent and each has the potential to be a very big market.
There are a small number of large companies who may benefit most from dollar content growth, which may give the best investment opportunities.
2020 was a tumultuous year for the automotive industry but we continue to believe the megatrends of electrification, autonomy and connectivity represent the biggest revolution in the automotive industry since Henry Ford unveiled the Model T in 1908.
The vehicle market declined by 20% in 2020, yet electric vehicle sales globally increased by 43% during the pandemic.
The potential of automated systems that augment the driver, led by regulation, and the IoT, which auto makers are at the forefront of, show clear investment opportunities.
For believers, 2020 was the year when digital currencies went mainstream; for sceptics, the bitcoin boom was the latest in a long line of distortions caused by over-abundant liquidity and suppressed interest rates.
We examine the investment potential of cryptocurrencies, ‘stablecoins’, central bank digital currencies and distributed ledger technology and the investment and environmental risks investors need to be aware of.
Representing 9% of GDP, education offers opportunities across the spectrum, from early learning to higher education.
We perceive the best investment opportunities right now to be in higher education and associated upskilling.
Global higher education is thought to be worth $7.7trn, with much of the market state-sponsored education.
Digitalisation will offer universities a pathway to growth and greater opportunities to more students.
Fintech & Payments
2020 was a strong year for fintech thanks to digital payment adoption trends and the further penetration of digital technology into financial services.
The adoption of digital payment methods has accelerated due to higher e-commerce penetration levels and the increased adoption of contactless payments.
Digital wallet providers continue to perform, though not without investment risks, and neobanks continue to grow.
We see bigger-picture disruption as sector lines are being blurred with fintechs and payment firms chipping away at traditional banking models.
Healthcare is only as good as its accessibility, but we now know there is hidden capacity.
Telemedicine has gone from being a corporate perk to a vital part of the care continuum.
Here, we look at other investment opportunities in distributed and remote care, next-generation diagnostics, and how AI could ease back-office burdens.
2020 was an exceptional year for the internet sector as strong tailwinds were felt across e-commerce and digital media.
For the full year 2020, the US Department of Commerce measured e-commerce growth of 32% on 2019, accounting for 14% of total sales.
We expect accelerated infrastructure spend and growth areas going forward in on-demand food delivery and travel, to name just two.
New legislation in the US and China which contain risks for the internet sector and ad targeting companies continue to face headwinds.
In 2020, people turned to gaming en masse for entertainment, escapism and socialising with friends/family, creating an exceptionally strong year for video games.
We believe gaming will have been etched deeper into people’s habits during the lockdown and the investment of money/time made in enjoying games will not be easily cast aside.
Cloud gaming, platform competition and the rise of the metaverse should potentially drive significant growth.