The world's largest investor for billionaires surveyed 3,400 people and arrived at 3 key themes for the next decade. Here's how you can profit too.

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The world's largest investor for billionaires surveyed 3,400 people and arrived at 3 key themes for the next decade. Here's how you can profit too.

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  • The majority of high-net-worth investors surveyed by UBS Global Wealth Management is bracing for a volatile start to the next decade and a big market sell-off.
  • The $2.7 trillion wealth manager is advising investors to look beyond short-term disruptions and seek out opportunities that will abound during a "decade of transformation."
  • Click here for more BI Prime stories.

A majority of high-net-worth investors expect financial markets to start the next decade on a rocky note, according to a survey recently conducted by UBS Global Wealth Management.

Of the 3,400 investors from around the world who participated, 79% said they anticipate more volatility in the year ahead while 55% expect a big market sell-off before the year ends.

Although the respondents were worried about issues in the immediate future like the 2020 election, 83% of people said they were willing to align their portfolios with long-term trends.

That's where UBS comes in, armed with its best ideas for where to invest in a so-called "decade of transformation."

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"From game-changing technologies to the forward-thinking companies driving the transition to a more sustainable economy, opportunities will abound to invest in the ideas that shape the future," said Iqbal Khan and Tom Naratil, the co-heads of global wealth management, in a recent note to clients.

Listed below are their top-three ideas for investable opportunities.

Digital transformation

The five technologies that will garner increasing demand in the decade ahead are augmented reality and virtual realit, artificial intelligence, 5G, big data, and cloud computing, they said.

UBS pulled data from Goldman Sachs, Bloomberg, and other sources to estimate that the combined market size for these technologies will grow from $420 billion in 2017 to $1.1 trillion in 2025.

"With businesses around the world turning to 5G, AI, and cloud computing, the companies that provide these services and develop technologies related to them are likely, in our view, to enjoy increasing demand in the decade ahead," UBS said.

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The note added: "For example, Asia, propelled by key markets China and South Korea, will account for more than 50% of global 5G capital expenditure and almost 75% of global 5G smartphone shipments in 2020, according to our estimates."

Genetic therapies

UBS sees the possibility that therapies including gene replacement will help cure chronic treatments and lower patient costs.

This trend already has the wind in its sails: there were nearly 100 active trials for gene therapy products in 2018, up from about 20 in 2010, according to data compiled by UBS.

"Pharma and biotech companies, we believe, will begin to take such therapies increasingly seriously," UBS said. "We expect more acquisitions of the firms that develop them, and see the potential for marked capital appreciation of the theme if clinical trials and commercial rollouts meet our expectations."

They advised a diversified portfolio of companies that are at the forefront of genetic therapies so as to prevent a wipe out if one company's treatment fails.

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The Ark Genomic Revolution ETF was created in 2014 to focus on companies that are expected to benefit from scientific developments which extend and enhance human life.

Water scarcity

This investing thesis is based on the imbalance between higher population growth and potentially lower water supply.

"In our view, water utilities and industrials both should benefit from rising water demand, the former through greater investment and higher water tariffs and the latter through increased equipment sales," UBS said.

UBS is not alone in offering this recommendation. Michael Burry, the investor who made millions after predicting the US housing bubble, started fishing this pond for opportunities about 19 years ago.

The Invesco Global Water ETF invests in companies that purify and conserve water around the world.

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