Three Key Investment Themes for 2025

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By Joseph Moss, International Banker
As we are now well into the first quarter of 2025 and the dust over the new US presidential administration is starting to settle, at least modestly, the prospects for the investment landscape for this year and beyond are starting to take shape. As such, it seems appropriate to identify key themes that will dominate the investment narrative over the coming months and years under this new regime.
Here, we identify three such thematic opportunities that investors should monitor.
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Accelerating deglobalisation
With President Donald Trump back in the White House, a decisive reversal away from a globalised, interconnected world is underway in the United States. Indeed, trade tensions are already flaring up after a series of executive orders signed by the new president placed import tariffs on goods arriving from certain countries. According to the administration, it is the “extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl” that underpins Trump’s decision to implement 25-percent additional tariffs on imports from Mexico and Canada (excluding Canadian energy resources, which will have a lower 10-percent tariff) and a 10-percent additional tariff on imports from China.
Trump’s new tariffs extend a broader trend towards protectionist measures that the US and much of the world have been pursuing over several years. According to the International Monetary Fund (IMF), nearly 3,000 trade-restricting measures were imposed in 2023, almost three times the number recorded in 2019. “This trend risks reversing the transformative gains from past global economic integration,” the IMF noted in its “IMF Annual Report 2024”. “Restrictions diminish efficiency gains from specialization, limit economies of scale, and reduce competition. Greater integration of the global marketplace and more complex value chains mean the cost of fragmentation will be higher.”
This fragmentation, which looks set to accelerate further in 2025 as Trump continues to favour tariffs as his economic weapon of choice for slowing China’s growth (he even recently described the word tariff as “the most beautiful word in the dictionary”), will thus drive even more deglobalisation this year and have profound consequences for the global economy. Indeed, China has already responded by announcing its own tariffs of 15 percent on coal and liquefied natural gas (LNG) and 10 percent on crude oil. Beijing has also authorised an antitrust investigation into Google, further reflecting the declining relations between the two nations.
“Deglobalisation presents significant challenges to economic growth and meaningfully increases inflationary impulses,” according to the World Economic Forum (WEF), which in a January 6 article highlighted research by the IMF and the Bank for International Settlements (BIS) showing that open economies tend to experience lower inflation rates, even after accounting for other inflation determinants. “Trade fragmentation reduces efficiency gains from specialisation and competition, and limits economies of scale—while financial fragmentation constrains cross-border capital flows and increases macro-financial volatility,” the WEF added.
As the world shifts to a more fragmented, multipolar economic model, then, the resulting rise in global tensions will become a key trend for investors to watch. “The year 2024 saw elections in over 60 countries, representing more than half the world’s population. In many developed nations, anti-incumbent sentiment surged alongside the rise of populist/nationalist movements and signs of democratic erosion. This has created further political and economic uncertainty,” Sprott, a global investment manager specialising in precious metals and materials, noted in an analysis published on January 20. “Countries may prioritise closer ties with neighbours to mitigate global trade risks by prioritising new regional agreements and localising supply chains. Political instability, inconsistent legislation and rising populism could change the path of the energy transition.”
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Ageing populations
Simply put, people are living longer across much of the world—and that opens up tantalising opportunities for healthcare investors. In the United States, for example, the population is now ageing at its fastest-ever rate, with the share of those aged 65 and above increasing by more than one-third in the previous decade. During this time, the median age in the US increased from 37.2 to 38.8. Older adults are currently among the fastest-growing age cohorts. Indeed, the US Population Reference Bureau (PRB) confirmed that the current growth of the population aged 65 and older is “unprecedented in US history”, driven by the large Baby Boom generation—those born between 1946 and 1964.
This rapid growth shows few signs of subsiding, moreover. “The number of Americans aged 65 and older is projected to increase from 58 million in 2022 to 82 million by 2050 (a 47-percent increase), and the 65-and-older age group’s share of the total population is projected to rise from 17 percent to 23 percent,” the PRB, a nonpartisan and not-for-profit demographic research organisation, also observed. “The US population is older today than it has ever been. Between 1980 and 2022, the median age of the population increased from 30.0 to 38.9, but one-third (17) of states in the country had a median age above 40 in 2022, with Maine (44.8) and New Hampshire (43.3) at the top of the list.”
China is considered to have one of the world’s most rapidly ageing populations. By 2019, the World Health Organization (WHO) recorded 254 million people aged 60 and over and 176 million aged 65 and over. By 2040, the WHO has estimated that a colossal 402 million people (or 28 percent of the total population) will be at least 60 years old.
In the European Union (EU), meanwhile, data from 2023 revealed that life expectancy at birth was 81.5 years, up by 0.9 years from 2022 and 0.2 years compared to the pre-pandemic level in 2019. By 2050, the WHO forecasted that 22 percent of the global population will be over 60 years old—a substantial increase from the 12 percent recorded in 2015—while those aged 80 or older will have increased threefold from the 2020 level.
These demographic figures highlight the strength of a compelling investment megatrend that is likely to persist for decades: Ageing populations should dramatically raise expenditures on healthcare, with older people generally producing higher per capita healthcare costs compared to younger people. Indeed, the WHO also noted that in 2019, around 75 percent of Chinese people aged 60 years or older suffered from noncommunicable diseases, such as cardiovascular disease, diabetes and hypertension.
Healthy ageing is a priority, according to the Swiss private bank Lombard Odier, which recently observed that businesses across the healthcare spectrum stand to gain. “Pharmaceutical companies that manufacture drugs to treat prevalent illnesses—including cancer, cardiovascular, and nervous system diseases—should benefit as populations age,” the Swiss banking group noted in a report published on October 14, 2024. “So too should makers of medical technology and machinery, diabetes management specialists, cardiology device manufacturers, and manufacturers of replacement joints. Diagnosis and treatment of these conditions typically happen in later life.”
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Artificial intelligence
As much as artificial intelligence (AI) fatigue may already be starting to set in in some quarters, especially given the endless cycles of news coverage on the technology being continuously rolled out, AI remains a dominant investment theme that is likely to persist throughout 2025 and beyond.
Since the public launch of ChatGPT in November 2022, the world has seen generative AI (GenAI) transform creative industries, education and retail. “AI also carries the potential, via humanoid robots, to transform manufacturing and healthcare, and has wide-reaching implications for the workforce and the broader economy,” Morgan Stanley noted in a piece published on January 22. “Among other developments, 2025 is likely to see profound growth in agentic AI. In this next phase of AI development, software programs gain ‘agency’ by taking action and adapting without explicit human instruction, which could have profound implications for autonomous vehicles, healthcare assistants and cybersecurity.”
According to TD Cowen, the financial-services division of TD Securities, AI deployments could yield nearly $2 trillion in US productivity gains in the coming years, saving more than 15 percent of US labour costs and potentially replacing up to 20 percent of worker tasks for 80 percent of the workforce in the US alone. Such trends clearly have profound implications for investor plays in equities, technology and macro themes.
TD Cowen also predicted that the AI adoption timeline will be supercharged, progressing at an even faster rate than cloud computing. “Microsoft is already on track to enter 2025 with more than $10 billion in annual recurring revenue (ARR) driven by AI, and recently disclosed forecasts by OpenAI also seem to support expectations for an accelerated cycle,” the investment bank wrote in a recently published report covering the firm’s investment outlook for 2025. “We expect the AI adoption curve to kick into a higher gear in late 2025 and in 2026, reflecting a two- to three-year period for adoption inflection, versus the six to eight years we saw in Cloud.”
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