Stockmarket winners: where to find the next success stories

Investors seeking the brightest prospects for the next decade should look outside Australia. Here’s how to get into the action.

The $39 billion takeover of Afterpay announced this month shines a spotlight on Australian companies achieving global success, but investors looking for the next big thing may have to broaden their horizons.

The biggest investment winners of the next decade are likely to come from beyond Australia’s borders, financial analysts and economists say, and there are increasing ways to grab a slice.

Bell Direct senior market analyst Jessica Amir said investors should always consider diversifying their money overseas.

“You don’t have to go out on the limb and blindly picks stocks in US, China, Europe – you can invest in ETFs (exchange traded funds) that often invest in the biggest, most successful

companies that have a history of delivering growth,” she said.

Bell Direct market analyst Jessica Amir recommends diversification.. Picture: Jonathan Ng

Here are four key sectors tipped to produce strong growth.

ELECTRIC VEHICLES

The push towards net zero carbon emissions should be rocket fuel for electric vehicles and the lithium batteries inside of them.

Ms Amir said 70 per cent of new cars sold in Australia by 2030 would be electric, and some countries were banning petrol-powered vehicles.

“You could look at the ACDC ETF, which invests in 30 of the world’s leading lithium and battery companies, from Tesla who produce electric cars to lithium companies like Pilbara Minerals,” she said.

Longlead Capital Partners managing director Andrew West said electric vehicles had been a market “characterised by hype and hope”. They represented 5 per cent of global car purchases in 2020 but growth had accelerated in early 2021, Mr West said.

“The low level of current penetration also suggests a long runway for significant growth,” he said.

CLIMATE

Munro Investment Partners chief investment officer Nick Griffin said climate was “hugely leveraged to stimulus spending”.

“As companies refurbish or rebuild or spend for the future, they will obviously do this in a greener way, and there are a number opportunities in this area,” he said.

BetaShares chief economist David Bassanese forecast strong demand for companies developing climate change innovations to reduce carbon emissions.

TECHNOLOGY

From robots to cybersecurity to computer games, the technology sector has delivered strong growth and this is tipped to continue.

Mr Bassanese said the best advice for everyday investors was to have diversified exposure to innovative technology.

“Investors need to go where demand is likely to be strongest,” he said. “Several standout sectors in coming years would include online activity, cybersecurity, robotics and artificial intelligence.”

ETF Securities head of distribution Kanish Chugh is a fan of Apple. Picture: Michele Mossop

ETF Securities head of distribution Kanish Chugh said big tech should remain a sector for investors to consider over the next 10 years.

“They’re constantly innovating – Apple has had its best quarter in 45 years,” he said.

INDIA

Mr Chugh said while Chinese companies had done well, investments in India were “somewhat forgotten”.

“The Indian market is the biggest consumption story you can find right now – it’s trying to transfer into the modern world,” he said.

“If Australian investors focus only on Australia, I think that’s a big mistake.”

Other sectors favoured by analysts – but just outside the top four list – include healthcare, consumer stocks, media, light industrial and 5G telecommunications.

Originally published as Stockmarket winners: where to find the next success stories