fbpx

Insights

Digital Infrastructure and Innovation – The new core portfolio of the 2020s

Published 11 Sep 2020

Today

The Mega Cap 7

The hard infrastructure assets required to power the global digital economy are mostly owned and operated by 7 global technology companies:

  • Alibaba
  • Amazon 
  • Apple 
  • Facebook
  • Google 
  • Microsoft
  • Tencent

They have a market capitalisation of US$8.5T and represent ~10% of global equities. Global data is expected to grow 60-fold by 2035, driving strong long-term growth for these 7 digital network owners. 

We believe that to successfully meet rising monetary inflation, investors should pivot away from old economy companies in favor of the digital economy. As an example, 30-40% of investors’ capital should be allocated to these 7 strong Mega Cap companies.

Tomorrow 

The Digital Disruptors

We believe investors should allocate a further 30-40% of capital into global and exponential technology companies who are launching highly innovative products for both business and consumers. 

Utilizing digital networks, technology innovators now have the tools to challenge entrenched market leaders across almost all sectors. Examples include; 

  • Tesla
  • Intuit
  • Afterpay
  • Xero
  • Megaport
  • Shopify

Tesla is driving an automobile revolution through electric and autonomous vehicles, aiming at 20 million sales per year or 25% of the global market long-term. Add in Tesla’s Space, Battery and Solar divisions, and we see a bright future for Tesla. 

The Future

Web 3.0 

Web 3.0 is the third internet generation, connecting devices in a decentralised network that allow a more transparent and secure network unlike Web 2.0’s (such as social media platforms) dependence on server-based databases. 

The early leader in Web 3.0 is Bitcoin, which protects purchasing capital as well as providing easy transferable over secure digital networks for near-zero cost. The early 2020’s will see central banks introduce digital money.

Ethereum represents a global computer which is a single source of truth for all governance, money and decision making. It is introducing a new wave of open-source, transparent, immutable and censorship-resistant financial products accessible to anyone with an internet connection.

Recommended Articles

A third of the world is locked out of basic banking

The Libra Association indicates how badly treated our most financially vulnerable communities are when it comes to finance: • That 1.7 billion people (31 per cent) of the globe is unbanked or underbanked. • The lowest income earners are...

User case #2: Privacy and digital currencies

How private is my information in the current world? Not really very secure? Could be better? The bigger question is who else has personal data (i.e., governments, etc) ….and who own’s it? This is the crux of the matter...

User case #1: Digital currencies may offer benefits – a closer look

It could appear counter intuitive to argue that a country like Australia with a relatively stable currency (AUD) would benefit from a digital currency. That may be the case if NSW traded mainly with Victoria and QlD but that...