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Thematic investing

Security

December 2017

Help safeguard the health, privacy and well-being of people everywhere

Opportunities across all aspects of human activity

Providers of physical and IT-based security products and services help maintain the integrity, health and safety of individuals, companies and governments. Constant innovation in mobile technology and e-commerce means cyber security must be continually upgraded, while urbanisation is leading to the need for more investment to protect infrastructure and the well-being of city-dwellers.
 
OPPORTUNITIES BY INVESTMENT SEGMENT
security opportunities by investment segment
Source: Pictet Asset Management
Meanwhile, more stringent safety legislation is resulting in higher spending on security services, such as food testing and inspection equipment. Because security companies operate across many different areas, this sector offers exposure to a diverse range of opportunities.

Physical security products

Three million people across the globe are moving to urban areas every week1.

Cities: securing the future
smart city projects
Reference: IFSEC Global/Frost and Sullivan

To make sure they are seen as desirable places to live and work, cities must prioritise safety – and this will require increased spending on infrastructure and personal security.

Specialised companies offering innovative security solutions such as electromagnetic locks or comprehensive home security systems could see their earnings grow by over 10 per cent a year over the next five years2.

Security services

Security service companies3 are growing in importance, as demand for their services is being driven by increasing urbanisation and a perception that the safety measures being taken by public bodies are insufficient.
Food safety testing takes place at many stages
food safety testing
Reference: MarketsandMarkets

Equally, companies that provide innovative solutions to safeguard the quality of essential everyday products, such as those involved in food testing and safety, have strong growth potential.

Driven by rising living standards in the developing world and an increasing number of international quality guidelines, private companies are developing tools and techniques to detect contamination faster and more effectively across the food production chain.

IT security products

By 2020 the number of devices connected to the internet will double from 25 billion in 2015 to 50 billion4.

The frequency and size of cyberattacks are on the increase across sectors
cyber attacks frequency and size
Reference: Bloomberg, Data Breaches, 2014
But the greater the number of connected devices, the more data breaches there are likely to be.

The number of detected cyber-attacks has increased steadily over the years, such that there are currently up to 118,000 attacks per day
5.

New technology in IT security products such as biometrics, surveillance systems as well as secured electronic payment will help fight crime and terrorism through large-scale data mining, which can detect anomalies and provide advance warning of threats.