5 investment themes to watch on the ASX share market in 2022

Here are some themes that experts believe could play a role in the markets next year…

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Investing in ASX shares comes with a constantly shifting and evolving environment, with new opportunities and investment themes cropping up regularly.

Some investors prefer to stick with the tried and true businesses of old. Whereas other ASX investors are inclined to explore the potential within the emerging, though speculative, disruptive trends. While the latter is fraught with risks, at times these disruptions can grow into giants.

So, what are 5 investment themes to watch on the ASX in 2022? According to industry experts, these are some of the key trends that you need to be aware of if you want to gain exposure to the disruptive side of the ASX sharemarket next year.

Metaverse

After another year of embracing online interactions thanks to the prolonged impacts of COVID-19, the proliferation of a three-dimensional virtual world isn’t such a stretch of the imagination now.

Progress made by virtual reality headset developers, such as Meta Platforms Inc (NASDAQ: FB), have been significant. Pair this with an increase in digital experiences as people find a way to deal with physical restrictions, and the metaverse begins to look probable.

Interestingly, Magellan Financial Group Ltd (ASX: MFG) portfolio analyst Chris Wheldon said:

A young consumer might buy a pair of digital Nike shoes for their avatar that only they own. The NFT that comes with the shoes proves they are unique. There’s a lot of hype about the metaverse, but we do believe it could create new business models, brands and products over time as people spend more time in digital worlds.

One ASX share that has found itself as a fund manager’s “favourite” metaverse company is Playside Studios Ltd (ASX: PLY). The game developer was recently covered as a buy in the opinion of Red Leaf Securities chief executive John Athanasiou.

Data storage

As technology evolves, the way we consume content is evolving with it. Once upon a time, it was predominantly static text and images. As internet speeds improved, the ability and desire to watch videos grew. Now, the next frontier is 3D content.

Each iteration has come with a significant increase in the amount of data needed to be stored. This trend is expected to continue, with research suggesting the global data storage market to grow at a compound annual growth rate of 26% between 2022 and 2027, according to Expert Market Research.

NEXTDC Ltd (ASX: NXT) is an ASX share in the data storage business, operating 11 data centres across Australia. Recently, analysts at Macquarie issued an outperform rating on the company with a price target of $16.10.

Cryptocurrencies

This year witnessed monumental steps towards cryptocurrency adoption. While people remain divided on the topic, progress was undeniably made in bringing cryptocurrency to a broader audience in 2021.

For instance, November included Australia’s largest bank, Commonwealth Bank of Australia (ASX: CBA), announcing it would offer crypto services to its customers. The very next day the BetaShares Crypto Innovators ETF (ASX: CRYP) broke ASX records with its highly successful debut on the Aussie market.

Heath Behncke, cofounder of Holon Global Investments said:

2022 will be the year when interest in cryptocurrencies grows exponentially, and they start to go mainstream. The incentives to use cryptocurrencies are very powerful and will lead to much faster adoption of digital currencies than people realise.

Decarbonisation

A growing emphasis on the risks of climate change has placed ‘green’ ASX shares front and centre in the past 12 months. Companies such as Calix Ltd (ASX: CXL), a business focused on developing sustainable solutions to environmental problems, has seen its share price rise 485% in 2021.

Looking forward, a strong push towards accelerating the development of renewables provides a potential tailwind for ASX shares positioned accordingly. First Sentier Investors head of global listed infrastructure, Peter Meany recently said:

In particular, the ongoing repair and replacement of old energy transmission and distribution grids, along with the accelerating build-out of renewables, should represent a steady source of utility earnings growth over many years.

Electric vehicles

Finally, the growth story behind electric vehicles is likely to continue to be a theme in 2022. Much like the decarbonisation theme, electric vehicles (EV) are touted as a green initiative. For this reason, market experts such as Holon Investments expect global demand for EVs to soar for years to come.

Unfortunately for investors, we don’t have any ASX-listed EV makers like Tesla Inc (NASDAQ: TSLA). However, the ASX is home to many lithium producers. The electrifying element is anticipated to be in short supply as global EV sales grow.

Some of the best-performing ASX shares in the past year have included lithium companies. For example, Novonix Ltd (ASX: NVX) is up 731%, Liontown Resources Limited (ASX: LTR) is up 420%, and Pilbara Minerals Ltd (ASX: PLS) is up 218%.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Motley Fool contributor Mitchell Lawler owns Commonwealth Bank of Australia, Meta Platforms, Inc., and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Betashares Crypto Innovators ETF and Meta Platforms, Inc. The Motley Fool Australia has recommended Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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