There is one nascent theme that is the biggest investment opportunity since the invention of the internet, according to one fund manager.
Climate change will force a global transition from old high-emission industries to low-carbon technologies in the next couple of decades, said Munro Partners chief investment officer Nick Griffin.
"We conservatively estimate this will cost US$21 trillion (AU$27 trillion) over the next 30 years.
"This is going to be the biggest S curve of my investment lifetime. The one before was the internet — this is the next one."
Likening it to the shift from horse carts to motor vehicles in the early 20th century, Griffin said both companies and sovereign nations are not just committing to token gestures any more.
"The US says they want to go to zero-carbon by 2050. China says they want to go to zero-carbon by 2050. Microsoft says they want to go to zero-carbon by 2050," he told a GSFM briefing.
"They're not saying 'emit less carbon'. They're saying 'emit no carbon'."
The fund manager said that one stock had already demonstrated the returns a green transition could bring, but it was just a preview.
"We've obviously seen one explode, which is Tesla Inc (NASDAQ: TSLA). There will be others," he said.
"There's lots of smaller companies here we think will grow over time. It's going to be really a great place to invest for the next 20 years."
Danish power company Oersted A/S (CPH: ORSTED) was an example of one of the bets Munro Partners have made.
While Joe Biden's victory in the US has helped the impetus for green transition, Griffin said it would have happened anyway.
Forget cyclical, go thematic growth
Climate now takes up 18% of Munro's portfolio, but there are a couple of other themes the fund is also interested in.
Griffin understood why cyclical and value stocks are in favour at the moment. But he sees those only as short-term — 6 to 12 months — investment plays.
"But in the next 3 to 5 years if you are trying to find structural winners, we still think digital areas are the place to look."
High-performance computing stocks (such as ASML Holding NV (AMS: ASML)) and e-commerce shares (like Hellofresh SE (ETR: HFG)) were also in favour at Munro Partners.
