Finding winners in this growing megatrend

Consumer preferences are another one where consumers are much more aware of the impact of their purchase decisions. People might consider buying an electric car now, or even in the food industry. You see concern about the rise of ultra-processed food. What does that mean? Consumers might want to consume healthier, less processed food. 

The third driver is the fact that companies are changing their behaviours in response to consumers wanting different things. You see in that food industry, the fact that large food producers now producing more natural food products is one example.

The final driver is policy and regulation. And generally, even though we've got a little uncertainty in the US at the moment, the trajectory of policy and regulation globally is for more support behind a lot of these markets. And so we think, taken together, those four drivers really pushed the global economy towards a more sustainable footing and will provide some really attractive investment opportunities. 

Winborne: I think picking the winners and losers is actually really hard. I think one way that we typically try and approach it is that we try to invest in the enablers of a transition. So let's take the transition that you are very aware of at the moment, the transition tools, electric cars. Now, I don't have any idea whether Tesla, BYD or a resurgent Volkswagen is going to dominate the electric vehicle paradigm. What we do know is that demand for things like electric vehicle architecture and autonomous driving solutions will increase almost regardless of which car company dominates that paradigm. 

What we're trying to do is essentially invest in some of the enablers of that change without betting on one company dominating a particular area. That's a very common pattern across our end markets. 

One other interesting example - I touched on the transition towards more healthy natural food. We wouldn't be so interested in a big food producer like Nestle or Unilever and Danone. Instead, we're interested in the food ingredient companies that basically provide reformulation solutions to those large food groups so they can make their products less heavy in salt, sugar, and artificial flavours. 

Winborne: A very big holding within the portfolio is an industrial gas company called Linde (NYSE: LIN). And for those that are not so familiar with industrial gas companies, essentially what these companies do is they separate atmospheric gas. They separate gas into its constituent parts of carbon dioxide and oxygen trace elements. 

These gases are used as the building blocks of efficiency across so many different industries. In the production of diesel, they use the de-sulphurise diesel fuel to make it less environmentally harmful. It's used to purify water and water utility companies. It's used by the food industry. When you buy your packaged food products and you see kind of the transparent layer, you'll see some gas in there. That's an inert gas provided by when the industrial gas companies. They have an almost systemically important role to play.