Transport and energy, and how quickly they are changing, present more chances for private investors to make both money and a positive impact. Private money is one impetus for investment, but when this is backed up by public-sector support, it is a powerful sign that something is more than a passing fad.
“The fight against climate change has driven significant government policy focus on the development of electric vehicles, and we see very attractive opportunities in innovation in batteries and electric vehicles,” says Fan. “Companies directly exposed to the electric revolution, including electric-vehicle makers, will continue to benefit from the long-term transition from diesel to electric vehicles.”
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The evidence suggests she’s right: the latest International Energy Agency statistics show that global electric vehicle sales are on target to reach the objective of 5 per cent of passenger cars by 2025.
“These would continue to drive stronger than market-average earnings growth for those companies exposed to structural growth trends. Both equities and bonds issued by companies exposed to structural growth trends would bring very interesting investment opportunities for our clients.”
Kanol Pal, of BNP Paribas Wealth Management, also highlights smart transport and energy as sources of strong investment returns.
“In 2017, 60 per cent of the global investments in renewables were made in Asia-Pacific. Energy efficiency, electric vehicles, renewable energy and energy storage will attract trillions of dollars of investment by 2030, so there are many investment opportunities out there which relate to clean and smart energy.”