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Allianz Investment: Identify major changes in era and diversify investments.
In this context, what is more important is diversification and accurately identifying themes that can benefit from the major changes of this era, and turning them into themes that investors can invest in.
In a note from Allianz Investment, it is mentioned that despite the disruptive factors behind the major trends still existing, fundamental changes in driving forces may occur. In this context, what is more important is diversification and accurately identifying the themes that can benefit from the significant changes of this era and turning them into investment opportunities. Regarding the sustainable development energy theme, Allianz Investment points out that as more sustainable energy production and storage solutions continue to develop, along with the construction of renewable energy facilities, it opens the way for energy production, consumption, and storage methods, helping to conserve natural resources, promote public transport, and electrify private vehicles. With major sustainable energy technology producers reducing prices and significant cost reductions in sustainable energy, the penetration rate of renewable energy is expected to rise, fostering large scale investments in renewable energy technology and strengthening its competitiveness in the long term. Regarding the artificial intelligence theme, with large language models like ChatGPT and the increasing importance and widespread application of artificial intelligence, they have become an integral part of daily life. These technologies significantly shape our ways of life, work, production, communication, and collaboration, and this trend will only accelerate. Although the integration of artificial intelligence into core business processes is increasing in all industries, the transformation in certain specific industries may be more evident. Regarding the impact of artificial intelligence on industrial automation production, Allianz Investment believes that although the momentum of integrating artificial intelligence into core business processes is increasing in all industries, the transformation in certain specific industries may be more evident. AI-driven digital twins help improve production lines in automated factories - from automobile, food production to retail - while reducing labor costs, increasing efficiency, reducing redundancy, and increasing output. Regarding the digitized lifestyle, Allianz Investment expects that by 2050, urban populations will account for more than two-thirds of the global population. The increase in urban population brings about severe challenges such as inadequate urban infrastructure, rising pollution levels, increasing water and energy consumption, and worsening social inequality. Addressing these urgent challenges means further establishing smart cities through more efficient and sustainable infrastructure. Considering that cities account for over 80% of global GDP, and the strong driving force of urban development, the global smart city market is expected to reach nearly $7 trillion by 2030, while the smart building market is expected to reach $127 billion by 2027. Therefore, accelerating smart city construction requires innovative transportation solutions. This also means strengthening digital solutions and expanding smart communication infrastructure to become the backbone of digitization. Regarding sustainable water resources, Allianz Investment stated that investing in solutions that concentrate on enhancing aquifers and underground water reservoirs improves the resilience of limited natural freshwater resources and is one of the most important measures to ensure water resources for the continuously growing global population, while the increasing demand for food and energy also relies on an adequate water supply. Regarding personalized patient treatment, utilizing the disruptive potential of artificial intelligence in the healthcare sector means transforming standardized treatment methods into medical services tailored to the individual needs and medical history of patients. Using AI solutions helps to early detect or even prevent diseases, promotes further development of robot-assisted minimally invasive surgeries, and reduces patient travel time for simple diagnostics or follow-up visits through telemedicine applications. The main driving force behind the strong growth can be seen in the rise of artificial intelligence applications (such as AI-powered conversational agents and virtual assistants), wearable devices/mobile health apps (such as blood sugar level monitoring sensors), and increasing government funding for health technology research and development. Facing the new generation, Generation Z and Millennials have different values, preferences, and behaviors compared to the older generation. As they become decision-makers in the business and political spheres, they are reshaping the world in their own image. These generations particularly emphasize quality over quantity, and consciously and cautiously consume, prioritizing experience, sustainability, and social responsibility in their purchasing habits. Generation Y/Millennials and Generation Z are at the forefront of the trend towards humanizing pets. They grow up with pets and see them as essential family members. Compared to previous generations, they pay more attention to the health and well-being of pets and are willing to spend more on high-quality healthcare, nutritious food, and quality services, providing various perspectives for investing in this growth theme.
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