Growth equity was among the hardest-hit asset classes in the first half of the year as inflation fears weighed on the market. But the combination of the reset in valuations with slower economic growth and weaker corporate profit growth for the broader market has led to a turnaround in growth stocks recently. Have growth stocks bottomed? Will growth stocks resume their leadership?
Jennison Associates’ Mark Baribeau, Head of Global Equities, and Sara Moreno, emerging markets equity portfolio manager, share their outlook for growth equities and where they’re finding attractive opportunities given the shifting market dynamics.
RESILIENT SECULAR GROWTH TRENDS
Certain secular megatrends have been reshaping how we live and conduct business for years now. The digital transformation of the enterprise is still in its early stages and the ability to leverage data continues to expand. Direct-to-consumer business models increase efficiency and profit potential for the companies that embrace them while offering convenience and cost savings to customers. Efficiency and convenience are also common characteristics among technology enablers, such as companies that facilitate electronic commerce.
To capitalize on these trends, we look for innovative companies offering unique products or services that solve real-world problems. We want dynamic companies with expanding secular demand that conduct business in large and growing markets. And, of course, we want companies that are fundamentally sound, with durable growth potential evident in revenue and earnings trends.
The largest structural trend poised to unfold over the next decade with fast-growth demand for EVs, components, and charging infrastructure.
Upcoming product cycles join the fight against some of the world’s most intractable conditions.
Durable demand from a young, financially robust customer demographic.
Ample opportunity in markets under-served by big financial institutions.
The biggest tectonic shift for businesses since the wireless internet.
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