Ride the wave with thematic portfolio

This year, we have added Remote Working and Environmental Sustainability to our thematic portfolios 


THEMATIC investing is all about identifying long-term trends. This year, we have added Remote Working and Environmental Sustainability to our thematic portfolios. 

For the Remote Working portfolio, we have identified five key industry segments that will benefit from this change in behaviour. 

They are: Cybersecurity, e-commerce, warehouse and logistic services, digital entertainment and technology companies that offer collaboration and productivity solutions to facilitate remote working. 

During the peak of the Covid-19 pandemic last year, most physical activities were forced to shift online due to the social-distancing measures implemented. Remote working is no longer an alien concept and most companies and employees have already done so for more than a year. 

While the pandemic seems to be easing, thanks to an efficient vaccine rollout programme, many firms are making plans to shift to permanent remote working after witnessing the cost savings and productivity that remote working has brought about. 

In a survey by Gartner Inc, 82% of CFOs intend to have some employees work remotely even after the pandemic, foreboding a significant change in work models and protocols. 

1) Tech firms that empower individuals to work remotely

The crux of remote working lies in virtual work. As many of us have experienced, shifting operations online is an arduous task and involves much preparation. 

Where a quick chat with your colleague beside you could help to iron out several issues efficiently, getting a hold of them may now prove difficult as they may be tending to other responsibilities. 

In line with this, collaboration tools would be essential so employees can collaborate easily and teams may continue meeting their project deadlines. 

These include communications software, conferencing equipment and services that allow users to conduct voice calls over the Internet. 

Productivity applications are also vital to ensure workers are fully operational to complete their tasks. 

2) Cybersecurity 

Over the years, cyberattacks have increased in both numbers and severity. As businesses digitalise more of their operations, they introduce more “entry points” into their systems, making them more vulnerable to attacks. 

This not only puts the firms’ proprietary data at risk but also customers’ confidential data. Should firms suffer a data breach, they stand to face a litany of issues like financial loss from compensation to customers, loss of reputation and trust, and even possible regulatory actions.

Remote working will amplify this need as more employees access sensitive information from their private networks and personal devices. 

In light of these challenges, effective cybersecurity management has become a necessity across companies, regardless of industry or size. 

Thus, cybersecurity providers that help manage cybersecurity risk by offering firewalls, anti-viruses, VPNs, intrusion prevention systems and other cybersecurity solutions would be essential in the shift towards remote working. 

3) E-commerce 

The pandemic has accelerated the adoption of digital technologies. With most people confined to their homes last year, physical interactions were kept to a minimum. 

This has led to a rise in global e-commerce sales and penetration rate as consumers learnt to adapt to this new normal. 

According to GlobalData, nine out of the top 10 global e-commerce companies experienced double-digit growth in 2020. 

Fast forward to now, while most countries have lifted their social-distancing measures, it seems many customers have changed their purchasing behaviour entirely and switched to conducting their shopping online. 

E-commerce thrived during the pandemic and we believe this uptrend will continue, especially in areas such as food delivery. Remote working provides consumers with more flexibility to receive their online deliveries, which will incentivise more consumers to shift to online shopping. 

Even if customers are eager to experience in-store shopping again, there is no doubt e-commerce will be a mainstay in the shopping scene. 

We recommend firms that help to facilitate online retail, namely e-commerce platforms that are closely linked to the industry. 

4) Warehouses and Logistics Services

As e-commerce surged, e-commerce firms had to strengthen their supply chain operations to meet rising demand, stringing along logistics companies in their climb. 

As customers prioritise speed and reliability, this has given rise to the new expectation of next day delivery. 

In a survey by McKinsey, 46% of respondents abandoned shopping carts online due to shipping times being too long or not provided. 

Hence, purchasing decisions can often hinge on shipping times and speedy delivery can spur e-commerce demand. 

Logistics are part of the value chain and play a central role in the e-commerce ecosystem. E-commerce players are also demanding for more warehouse space to store their goods before moving them for distribution. 

Thus, industrial companies that derive a significant part of their revenue from supporting the supply chain, from warehousing to international freight and last-mile transportation, stand to gain. 

5) Digital Entertainment 

The multiple lockdowns have led to a shift in consumer entertainment patterns with eSports and streaming services moving into the limelight and continuing to rise. 

In a period where physical inter-action and outdoors activity was discouraged, consumers turned to video games to engage themselves and find communities to connect with. 

Streaming services have become a prime media choice as 12 million customers subscribed to new streaming services like Netflix, Disney+, and Amazon Prime Video during the lockdown. 

In contrast with traditional cable TV, consumers now access content from their mobile devices and subscription fees are generally lower for streaming platforms that also produce exclusive unique content that consumers enjoy. 

The views expressed are of the research team and do not necessarily reflect the stand of the newspaper’s owners and editorial board.