Business Insider
- Kate Moore, BlackRock's head of thematic strategy, told Business Insider about the global trends that she thinks will last throughout the 2020s.
- Moore was formerly the chief equity strategist at BlackRock and helps decide how the $7 trillion firm allocates its money.
- She's taking an upbeat view of Chinese stocks, saying China's growing wealth and rapid urbanization will boost equities longer-term even though trade tensions dominate investors' attention today.
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Kate Moore's job involves looking at the biggest of big pictures.
She's the head of thematic strategy at BlackRock, the world's biggest money manager, and she's also a member of its global allocation team. In an exclusive interview, she told Business Insider about four trends that will power stocks and industries throughout the brand-new decade.
"We're leaning into stronger, sustainable, secular growth stories," she said.
Here's what Moore had more to say about critical patterns that start at a macro level and filter down to numerous industries.
(1) Urbanization
Moore spends a lot of time thinking about the explosive growth of cities in China and in other emerging market nations. She says that growth will affect everything from consumer spending to infrastructure and is going to be a source of technological innovation as well.
"The more concentrated population is, the easier it is to allocate capital," she said. "It makes sharing economy, gig economy-type job easier. It also creates a lot of demand for the types of urban infrastructure, like transportation and new water systems and recycling systems that will allow for kind of longer term sustained collective living."
That keeps her optimistic about Chinese stocks for years to come, as that trend and China's increasing wealth should last long after the effects of the ongoing trade war start to fade.
One way to get exposure to this theme is the iShares Emerging Markets Infrastructure ETF.
(2) Renewable energy
Renewable energy is becoming more and more economically competitive with fossil fuels, and that leaves Moore expecting a powerful tailwind - and not just for solar and wind power companies.
"All of those companies that provide the technology, whether it's software or hardware, as well as the component parts and those engineering system or companies that are building the system to both transmit as well as store the renewable energy, I think that make really interesting investment opportunities over the longer term," she said.
She adds that some older energy companies are doing a "a great job of diversifying their businesses into renewable," so she's not simply dumping those traditional companies for new, green ones.
Two methods investors can use to get exposure to that theme are the VanEck Vectors Solar Energy ETF and the ALPS Alerian Energy Infrastructure ETF.
(3) The future of food
There is a lot more to this than plant-based meats and milks, although that's a piece of the puzzle. Moore says she's also digging into "the globalization of food."
She explains that people in emerging market countries are going "up the food chain" and eating more meat, as well as more packaged foods, and they're also willing to try more foods from other cultures. That will open new markets will open up for companies that can reach those customers.
"What types of overall products are globally source-able, and therefore are there consumer products, packaged food companies that are well positioned to grow their market share as emerging market consumer tastes evolve?" Moore asked.
It will also mean more demand for companies in industries like agriculture, fertilizer, antibiotics, transportation, and storage.
There are a wide variety of ways to invest in food, and two include the Invesco Dynamic Food and Beverage ETF and the First Trust Nasdaq Food and Beverage ETF.
(4) Evolving healthcare
A lot of investors are bullish on healthcare in the coming decades, reasoning that as the population of the US and other developed countries ages, spending money on medicines and services will rise. Moore agrees, and adds that people in emerging markets will also spend more money in the health care space as their incomes rise.
Beyond that, she says the melding of healthcare and new technologies is going to change that industry and create a lot of new opportunities. She names technology platforms that serve health science companies and telemedicine companies as interesting places to put money to work.
Drug companies, too, might see their businesses transform as technology improves.
"Part of this is genomics, part of this is a move towards mobile and digital healthcare services," Moore said. "We increasingly are seeing some of the biopharma companies have the digital and technology solutions that work in conjunction with their traditional drug therapies. We're able to collect much better data."
Two methods to invest in that sector are the Health Care Select Sector SPDR Fund and Invesco S&P Small Cap Health Care ETF.