Imagine a world in which your refrigerator could detect when your milk is running low and send a message to a grocery delivery service to bring a fresh gallon to your doorstep. The Internet connectivity and data sharing capabilities that objects can have today―known as the Internet of Things―is already transforming a number of industries.
One such example of an industry being transformed is manufacturing. Manufacturers will no longer have to endure down times with their equipment because when a machine part starts to wear down, it can send a message to the supplier of that part that it needs to be replaced. The new part can be automatically shipped out, so the equipment can keep running without ever breaking down.
While this new technology is creating considerable new opportunities for some companies and industries, it is also disrupting others. In the past, companies that supplied parts and provided repair service could charge premium prices because their customers, like manufacturers, were willing to pay whatever it took to get their equipment running again. In this new world, the parts suppliers and service providers will not have the pricing power they once did.
When investors employ an investment strategy that could take both long and short positions, they have the potential to realize gains both from the companies that are benefitting from a major change and those that are adversely affected by it.
Discover additional change themes in which Portfolio Manager Michelle Borré, and her team have invested:
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These views represent the opinions of the Portfolio Manager and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the publication date, and are subject to change based on subsequent developments.