The strong and consistent returns we obtain for our investors are achieved by investing in businesses that are highly profitable and cash generative, with strong balance sheets. But which ones?
Over time, an increase in the share price of a company follows its earnings growth. Investing in those few, well positioned and highly profitable companies benefitting from megatrends, delivers 'best of the best' outcomes.
Here are 3 of our 16 big megatrends boosting returns:
The supply of U.S. homes for sale is near a record low, and the gap between supply and demand is widening. As the millennial generation reaches their first home purchase, and the 46-year-old plus cohort is accelerating, there are 10-15 year tailwinds for this megatrend.
Digital transformation that was projected to happen over the next 10 years is happening now and it's accelerating. As an additional boost, the pandemic has pushed this along further, with companies significantly upping their spend on enterprise digitisation. The rapid adoption of hybrid work models, online shopping and even services such as doctor consultations, exemplify this.
Internet of Things
A key enabler for this megatrend is 5G. Yes, we may have heard this term too many times already, but what it enables behind the scenes is extraordinary, pushing the boundaries of imagination. Global 5G services is expected to grow at a compound annual growth rate (CAGR) of 23%, to reach $188 billion in 2025. Just the start.
Equity Trustees Limited ("EQT") (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the Insync Global Quality Fund and the Insync Global Capital Aware Fund. EQT is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT). This information has been prepared by Insync Funds Management Pty Ltd (ABN 29 125 092 677, AFSL 322891) ("Insync"), to provide you with general information only. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither Insync, EQT nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product.