Acceleration of Innovation
The COVID-19 disruption has given investors a heightened appreciation of transformative businesses, accelerating structural changes that were well underway pre-crisis. As companies everywhere adapt to new realities, the gap between winners and losers will widen. Disruptive companies that were challenging traditional industries before the crisis will likely emerge as long-term growth leaders in the NEXT—New EXceptional Technologies—economy. Explore the next innovation supercycles and the implications for the NEXT economy.
5 Implications to consider for post-pandemic portfolios
Evolution from disruptors to revolutionary drivers of future growth
Multi-year secular shifts that accelerated during the pandemic will transform disruptive companies into advanced drivers of growth in the NEXT economy.
Intensifying impact on portfolios in a winner-takes-all world
A widening gap between winners and losers as companies adapt to new realities will benefit capital-light, tech-heavy business models with strong secular tailwinds.
The disconnect between growth potential and investment exposure
Despite secular growth companies exhibiting greater strength and resilience, many passive and active global equity categories are underallocated to these groups, forgoing critical sources of portfolio alpha.
Rethinking traditional allocations to include active secular growth exposure
In a rapidly changing world where there is no passive substitute for deeply experienced managers able to consistently identify future market leaders, investors should consider including a dedicated secular growth component in their portfolios.
The views expressed herein are those of Jennison Associates investment professionals at the time the comments were made and may not be reflective of their current opinions and are subject to change without notice. Neither the information contained herein nor any opinion expressed shall be construed to constitute investment advice or an offer to sell or a solicitation to buy any securities mentioned herein. Neither Prudential Financial, its affiliates, nor their licensed sales professionals render tax or legal advice. Clients should consult with their attorney, accountant, and/or tax professional for advice concerning their particular situation.
Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. The manager has no obligation to update any or all such information; nor do we make any express or implied warranties or representations as to the completeness or accuracy.
Any projections or forecasts presented herein are subject to change without notice. Actual data will vary and may not be reflected here. Projections and forecasts are subject to high levels of uncertainty. Accordingly, any projections or forecasts should be viewed as merely representative of a broad range of possible outcomes. Projections or forecasts are estimated, based on assumptions, subject to significant revision, and may change materially as economic and market conditions change.
1039847-00001-00 Ed 9/2020