Politicians, business leaders, and influencers from all over the world have gathered in the Swiss Alps to kick off the annual World Economic Forum.
Amid the turmoil across financial markets, many will look for this meeting of the minds in Davos, Switzerland to inspire hope and certainty for the global economy. Below are five of the biggest themes and issues that will take center stage at the WEF 2016, along with potential ways to play them with ETFs.
1. The Next Industrial Revolution
The theme of this year’s conference is the “Fourth Industrial Revolution,” which aims to capture the essence of how our technological innovations are changing the global economy for the better. Alas, if history has taught us anything, it is that disruption and creative destruction are hardly “smooth” transitions for individuals and businesses alike.
Numerous discussions will be centered on the topic of automation and using robotics to increase productivity across a spectrum of industries and processes. While it’s certainly a scary thought that more and more jobs are likely to be replaced in some degree with the arrival of mass automation, keen investors will be looking to take advantage of this shift.
Ways to Play
2. Climate Change
It doesn’t take much to figure out that climate change will be a major talking point during the conference when you consider the WEF’s list of global risks ranked by level of concern. Looking at the biggest risks for the next 10 years, we see that experts are clearly concerned with climate change developments as four of the top five issues are all climate-related:
The Global Risks of Highest Concern, 2016
Ways to Play
- Agricultural Commodities ETFs.
- Agribusiness ETFs.
- Water Equities ETFs.
- Etho Climate Leadership US ETF (ETHO ).
3. Cybersecurity
Data breaches and information leaks have become an expected risk in today’s digital age. While economic and environmental risks may be the central topics among attendees at Davos, the growth of cyber risks will be an equally important topic of discussion. In fact, according to the WEF, cyberattacks are now considered the greatest risk to doing business in North America.
Ways to Play
4. Emerging Economies
Uncertainty over China’s financial stability and growth prospects will likely permeate many of the conversations at Davos. Furthermore, many will be asking about the implications of further weakness in China on emerging markets that have grown dependent on the once-booming Asian powerhouse. Plummeting commodity prices and changing monetary policy in the U.S. are just some of the tailwinds that experts will look to dissect when formulating their outlook for much of the developing world.
Ways to Play
5. Equality
This year, more so than previous ones, forum leaders promise to tackle the issue of gender inequality; building off that, the topic of workplace inequality in general is likely to resonate strongly throughout the conference.
While “equality” is by all means the least investable of the themes highlighted here, there are still some niche ETFs worth a closer look.
Ways to Play
The Bottom Line
Investors looking to position their portfolios for future growth following a pullback in the market may want to consider some of the themes highlighted at the WEF this year as the basis for their research on where to put money to work. Just keep in mind that the “big picture” nature of the issues discussed at the conference most likely translate into a very long-term horizon from an investment opportunity perspective.
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