7 August 2025
‘Let the trend be your friend’ according to the old investment adage – but with so many coming and going in the space of a year, how do you know which ones to follow?
That is where megatrends come in, according to wealth manager RBC Brewin Dolphin. These are long-term influences that drive change across the globe on an economic and societal front, often taking years, if not decades, to fully unfold.
Previous examples have included globalisation, the digitisation of technology, urbanisation, and the rise of China and India as economic powers. But what are some of the megatrends that lie ahead, and how should investors respond to them?
Rob Burgeman, wealth manager at RBC Brewin Dolphin, said: “With so much going on in the world, it’s easy to get stuck in the minutiae of the here and now. But if you zoom out, the challenges of today often seem inconsequential in the grand scheme of things. Much bigger forces are at play that ultimately shape how markets perform over the long term.
“As the dot-com bubble burst in 2000, investing in the internet and e-commerce probably didn’t feel like a brilliant idea. But, provided you hadn’t invested in individual companies with no revenues, if you’d stuck it out and followed the general trend you would more than likely be in a decent position today. These influences take a long time to play out and there will be bumps in the road.
“At the same time, it’s important to remember that not all trends last forever – even megatrends. That’s why it’s vital to seek out professional financial advice before making any significant investment decisions and ensure you build a portfolio with a suitable level of exposure to any trends, markets, or assets based on your appetite for risk.”
1. Increased adoption of AI
AI is already mainstream and will only become more ubiquitous in the years ahead, as more individuals, organisations, and sectors find different ways to use it. At the moment, only 33 percent and 25 percent of medium and small UK firms, respectively, use at least one AI technology[1] and only 27 percent of consumers use AI tools in everyday life[2], suggesting there is enormous room for growth.
Industry estimates indicate that spending will need to rise from the current hundreds of billions to as much as $6.7 trillion (£5 trillion) by 2030[3]. In the UK, the government has made AI a focal point of its policy agenda, committing to billions of pounds in infrastructure investment[4].
Rob Burgeman said: “You can’t ignore AI – it is going to fundamentally change the way much of the world works. Huge amounts are being invested in AI companies and infrastructure, and that is going to be a massive tailwind throughout supply chains in the coming years.
“The obvious beneficiaries would seem to be the businesses developing AI technologies themselves, many of which have strong balance sheets and deep competitive moats around them, but it goes much wider than that. Vast numbers of new data centres will need to be built, the equipment contained within them will require cooling systems, and all of these new devices will need to be connected – and that’s just the starting point.
“More generally, the technology can help to save administrative costs, research time, and automate a range of different functions. It could, therefore, be a significant boost to profitability to businesses of all descriptions willing and able to adopt it.”
2. Investing in energy infrastructure
While the transition to net zero is driving a reduction in carbon emissions, the amount of power required to support new technologies – including AI – and growing populations is placing an ever greater load on national grids. Growing use of electric vehicles, the electrification of public transport systems, and the development of more data centres are all expected to raise the UK’s power consumption from 279 terawatt hours (TWh) in 2025 to 692 TWh in 2050, according to the Climate Change Committee[5].
The UK is not alone on this front. The government in Ireland has placed a moratorium on the construction of new data centres, saying that they place too much of a burden on the nation’s energy infrastructure. Meanwhile, in The Netherlands the construction of new housing has been significantly slowed to prevent extra strain on the grid[6].
Rob Burgeman said: “Given the vast technological changes of recent years, it is almost inevitable that energy infrastructure spending is going to need to pick up. We saw the first evidence of that last year when National Grid announced its plans to invest £35 billion in its electricity transmission business between 2024 and 2031.
“AI is both a challenge and an opportunity here. On the one hand, it creates more demand on the system as more people use AI-enabled technologies and more devices incorporate it. On the other, it could reduce the power demands and increase the energy efficiency of some traditional industries.
“Either way, billions – if not trillions – will be spent across the globe by governments and private sector energy suppliers on generating more electricity in a more sustainable way. Even if some nations are pushing back for now, this is a long-term trend that isn’t going away.”
3. Strengthening national defences
A volatile geopolitical backdrop has been more or less a constant since the end of the Covid-19 pandemic, beginning with the conflict in Ukraine. Combined with changes in the direction of the USA’s foreign policy, many governments – particularly in Europe – have reassessed their defence needs and are planning to increase their spending.
Research has indicated that global defence spending rose to a new high of $2.46 trillion (£1.8 trillion) during 2024[7]. Perhaps the highest-profile example of the trend continuing was Germany announcing earlier this year the creation of a €500 billion (£420 billion) defence and infrastructure fund, which would be exempt from the country’s strict fiscal rules[8].
Rob Burgeman said: “There have been a lot of developments on the geopolitical front in the last couple of years. As a direct result, governments spending on defence has been on the rise and there appears to be little sign of that abating any time soon – particularly as relationships between some nations have been put under strain.
“Europe is perhaps the most interesting case, in that respect. Countries, such as Germany, which have previously deliberately limited their defence spending have changed their attitudes, which will provide a long-term tailwind for companies in the sector.
“But it’s unlikely to be evenly spread. Many governments are opting to favour companies in their own back garden, and that means not everyone in the sector – as well as the supply chain – will benefit to the same degree. That will require investors to be savvy about how the get exposure to this trend.”
4. An ageing population
The world is getting older. According to figures from the World Health Organization (WHO), life expectancy at birth reached 73.3 years in 2024 – an increase of 8.4 years on 1995[9]. The number of people aged 60 and over is also projected to increase from 1.1 billion in 2023 to 1.4 billion by 2030.
Much of that trend is focussed on the developed world. In the UK, 19 percent of people were aged 65 or over during 2022, but this is forecast to increase to 27 percent by 2072[10]. With that will come a range of challenges – not least for the care and healthcare systems – but also opportunities for businesses in terms of product and service development.
Rob Burgeman said: “The population is getting older and, with that, there will be a range of knock-on effects for society. But for investors and companies it could open up a range of new opportunities. Perhaps one of the clearest examples was the announcement from a Japanese nappy maker last year that it was discontinuing production of nappies for babies to focus on providing them for adults[11].
“In a similar vein, demand for the services and products older people need should gradually rise over time. Analysts expect that to involve areas like eyewear and care, hearing aids, pharmaceuticals, and a range of other health-related products. But it may also mean more need for insurance products, holidays, and assistive technologies.
“As the Fundsmith fund has recently been discovering, though, a rising tide doesn’t necessarily lift all boats. There are a range of ETFs that offer exposure to this theme, but be wary of the quality of the companies contained within them.”
Disclaimers
The value of investments, and any income from them, can fall and you may get back less than you invested. Investment values may increase or decrease as a result of currency fluctuations. Information is provided only as an example and is not a recommendation to pursue a particular strategy. We or a connected person may have positions in or options on the securities mentioned herein or may buy, sell or offer to make a purchase or sale of such securities from time to time. For further information, please refer to our conflicts policy which is available on request or can be accessed via our website at www.brewin.co.uk. Information contained in this document is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness.
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PRESS INFORMATION
For further information, please contact:
Siân Robertson: Sian.Robertson@brewin.co.uk / Tel: +44 (0) 20 3201 3026
NOTES TO EDITORS
About RBC Brewin Dolphin
RBC Brewin Dolphin is one of the UK and Ireland’s leading wealth managers and traces its origins back to 1762. With £57.6bn* billion in assets under management, it offers award-winning, bespoke wealth management services, including discretionary investment management and financial planning.
Its qualified investment managers and financial planners are based in over 30 offices across the UK, Jersey and Republic of Ireland, with a commitment to high standards of client service, long-term thinking and absolute focus on clients’ needs at the core.
As part of Royal Bank of Canada (RBC), RBC Brewin Dolphin is now able to draw on the strength of a global financial institution to enhance the services it provides to clients and to drive further innovation across the business.
*as at 31st October 2024.
Disclaimers
The value of investments can fall and you may get back less than you invested.
RBC Brewin Dolphin is a trading name of RBC Europe Limited. RBC Europe Limited is registered in England and Wales No. 995939. Registered Address: 100 Bishopsgate, London EC2N 4AA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
® / ™ Trademark(s) of Royal Bank of Canada. Used under licence.
About RBC
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[4] Source: UK Government
[5] Source: The Climate Change Committee
[10] Source: House of Commons Library