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Secular Outlook

Economic and investment trends

Secular Outlook 2020–2029: Year III – Economic and investment trends

Autumn has arrived, and, as is the case every year, the time has come to gather Julius Baer’s top investment and research experts to exchange ideas and try to carve out the most important secular trends that will shape the economy and capital markets during this decade. This exercise is of the utmost importance, because as long-term investors, we cannot afford to swim against the tide.

Every decade is characterised by a different economic and investment environment, and the leading asset classes of the last decade are generally superseded by other ones in the following one.

Key secular trends 2020–2029

Macroeconomy

• Bipolar Sino-US world

• Unorthodox macroeconomic policies (MMT, etc.)

• Energy abundance

• Web 3.0 

• Life science disruptions

Capital Markets

• End of US dollar regime alternation

• ESG

• The rise of political triggers and decline of market signals

• Public equities challenge median private equity returns

• China's rise to core asset class status

Key Risk Factors

• Climate change

• Rise in cyber risk

• Infrastructure risk

• Sino-US decoupling

• Dormant systemic risk

It is notable that many of the key Secular Outlook themes from the past few years have accelerated in the wake of the global pandemic. The rise in fiscal activism, the growing rift between China and the US, as well as the rapid deployment and widespread use of the mRNA technology in the fight against Covid-19 have given us a glimpse of what the world might look like in a decade’s time. A major trend that has become more salient, which we have included for the first time in this edition, is the blockchain technology and the rise of crypto assets. The blockchain revolution will have deep consequences, and it will most likely not only disrupt financial services but also propagate across all sectors of the economy, as businesses rely more and more on technology. We are entering a new era of ‘Web 3.0’, the third internet revolution, where we will see the emergence of the decentralised internet thanks to blockchain technology.

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