As artificial intelligence (AI) continues to evolve, it has emerged as a major investment trend with significant potential in the coming years.
However, AI is just one of several sectors identified as promising by analysts from Capital Group in the "2024 Private Pension Barometer" report.
The report, co-produced with Columbia Threadneedle and Capital Group, highlights AI, healthcare innovation, shifts in global trade, and advancements in agriculture as key areas for future investment.
Artificial Intelligence
AI has already revolutionized the tech industry, but its influence is expected to spread across various sectors.
Mark Casey, an equity analyst at Capital Group, predicts that AI will soon move beyond its current applications, such as chatbots, to become an integral part of industries like manufacturing and healthcare.
He points to the rapid adoption of AI-powered robots, with corporate robot use increasing by 31% between 2021 and 2022, according to the 2023 World Robotics Report.
Casey cites Amazon's advanced AI-driven robots, like Sparrow, as examples of how AI is enhancing efficiency and productivity across different fields.
Healthcare Innovation
Healthcare is another sector drawing investor interest, particularly in the area of cell therapy, where cells are modified outside the body before being reintroduced to treat diseases.
Rich Wolf, another analyst from Capital Group, highlights the potential of gene-silencing techniques, such as those developed by Alnylam Pharmaceuticals, to treat conditions like blood cancers and diabetes.
With major pharmaceutical companies like Roche and Pfizer leading research and development, the healthcare sector is poised for significant growth in the coming decade.
Global Trade Shifts
The pandemic-induced disruptions in global supply chains have led companies to diversify their manufacturing bases away from China.
This shift has benefited regions like Southeast Asia and Latin America, particularly Mexico. Brad Freer, a Capital Group analyst, notes that Mexico is becoming a key player in this "nearshoring" trend, attracting multinational companies looking to capitalize on the country's efficient and affordable labor force.
Agricultural Advancements
Agriculture is undergoing a transformation as companies explore innovative solutions to boost productivity.
Gigi Pardasani, another analyst from Capital Group, highlights precision agriculture, which uses advanced technology to increase crop yields by up to 30%. Companies like Deere and Bayer are at the forefront of this trend.
Additionally, investments in regenerative agriculture, seed innovation, and alternative proteins are also gaining traction, with firms like Nestlé and Beyond Meat leading the way.
