From diagnosis to investing: capturing medtech opportunities
Climate change: a sustainable investing megatrend
We discuss five megatrends related to climate change and the investment implications.
Telehealth on the rise
Telehealth, a case of technology meeting healthcare, has become trendy in recent years.
In Hong Kong, hospitals, clinics and telecommunications companies have been increasingly shifting medical services to patients’ homes2. Since the start of the global public health crisis, 95% of physicians have increased their use of video consultations by 50% to provide medical care to patients3, reducing patients’ and clinicians’ risk of exposure and infection.
Remote patient monitoring and self-diagnostics, and trials of hybrid online-and-offline models are bringing new care models for patients amid accelerating investments in digital health, according to a McKinsey & Co. report4. The total venture capital investment into the digital health space stood at US$14.7 billion in 1H 2021, compared with investment of US$14.6 billion for the whole of 2020, and nearly twice the investment of US$7.7 billion in 20194.
Additionally, structure trends of an ageing population, exponential increase in expenditure and the need for better efficiencies in the healthcare system are presenting long-term investment growth opportunities for the medtech industry1.
Adding a robotics touch
Medical organisations are increasingly harnessing smart technologies to accelerate efficiencies, reduce unnecessary treatments and improve preventive care.
For example, some medtech companies have been applying machine learning and artificial intelligence (AI) technologies when designing and upgrading surgical robots, allowing for greater precision during surgical operations. This has resulted in shorter patient recovery time. In addition to AI innovation in diagnostics and surgery, advanced technologies in healthcare also provide investment exposure to medical devices.
Taking more steps a day
Additionally, supportive government initiatives such as using big data in smart healthcare - storing the residents’ lifelong health records in an encrypted format shared by private and public hospitals5 – could improve the healthcare service quality and have given the medtech industry a boost.
Smart technologies have also started to integrate in the way people live. The Singapore government has a physical activity programme, the “National Steps Challenge” to promote healthy living. With step-trackers, residents are encouraged to walk more than 10,000 steps a day. Since its launch in November 2015, 70% of previously inactive participants have now averaged more than 7,000 steps per day, with 30% of participants clocking about 10,000 steps a day on average6.
How we are investing in future world trends in our asset allocation strategy1
In this strategy, we believe that future transition can capitalise on multiple trends. We have identified five key themes7 that are shaping our future for the JPMorgan Future Transition Multi-Asset Fund.
Thematic investment in a multi-asset framework
We seek to enhance the multi-asset portfolio with a targeted allocation to these secular investment themes, and we utilise big data and fundamental insights to identify them. We harness a robust technology architecture with proprietary computing and storage capabilities.
Using natural language processing, our innovative and proprietary ThemeBot AI tool8 helps to analyse hundreds of millions of data sources in a short period of time, thus allowing our investment professionals to make informed decisions more efficiently.
ThemeBot is a key AI tool that enables JPMorgan Future Transition Multi-Asset Fund to seek out opportunities in evolving future transition trends. ThemeBot helps identify smaller, early stage opportunities as we build thematic investment strategies.
The tool uses textual relevance and revenue attribution to generate a list of stocks associated with a theme. Its output is then validated and refined by our team of experienced investment professionals – combining artificial and human intelligence for stronger outcomes.
Key highlights of the Fund8
The demand for telehealth, innovative AI technologies and medical devices is accelerating after the global public health crisis4. This rising demand is also driven by structural trends such as an increasingly ageing population in many major economies. Governments are also increasingly adopting innovative technologies to improve healthcare efficiencies and quality. Innovating medtech companies are thus presenting investors with exposure to long-term growth opportunities1 in the industry.