Thematic Trends Open Doors to Durable Return Streams

Portfolios offering investors access to the investment opportunities derived from long-term, structural growth trends in healthcare and technology innovation

In a world of market volatility and macroeconomic uncertainty, many investors crave return streams that can overcome external stresses. Thematic trends open a door to just that. 

Transformative technology and healthcare innovation are changing our world in dramatic ways. Portfolios focused on companies that are driving these big thematic trends, with high quality businesses, can provide access to return potential supported by long-term, structural growth trends that will help redefine the world we live in. 

Healthcare stocks benefit from long-term thematic trends, with demand driven by aging populations in developed markets and economic growth in emerging markets. Scientific progress is opening doors to new treatments while reducing costs. And demand for healthcare tends to transcend cyclical turns in the economy. 

The technological revolution in healthcare is just beginning. Robotic surgery, new diagnostics and life science tools that can identify diseases at an earlier stage, and treatments for Alzheimer’s disease and cardiovascular disorders, are among many new developments driving growth in the sector. Telehealth and digitization offer dramatic potential to deliver better patient care. 

Still, some investors might not feel comfortable investing in a single-sector portfolio. Healthcare, however, deserves a special place in an equity allocation. We believe a carefully curated portfolio of healthcare stocks offers a unique combination of strong return potential and risk reduction characteristics for changing market conditions.

Healthcare has long been considered one of the most reliable defensive sectors. Despite short-term bouts of turbulence, as seen during 2022, we believe the dynamic products and services that now dominate the healthcare space are the reason why a portfolio of carefully selected stocks in the sector still enjoys long-term defensive characteristics. 

Investment Solution

AB’s International Health Care Portfolio focuses on quality businesses across the healthcare sector, including drug development, diagnostics, robotics and services. Since investors have no insight into the probability of scientific success, we don’t focus on scientific breakthroughs. Instead, the portfolio seeks profitable healthcare companies with strong fundamentals to bolster long-term return potential.

AB International Health Care Portfolio

Technology stocks fell sharply in 2022, leading some to question the sector’s future. Despite the downturn, we think technological innovation is entering a new phase in several areas poised for strong growth.

Some areas within technology that have exploded since the launch of the iPhone in 2007 have matured. Global smartphone shipments are slowing and the rapid growth in social media may be peaking. But technology infrastructure—such as the migration to the cloud—is taking off. The use of robotics is expanding into new industries from healthcare to agriculture. And the Internet of Things is reshaping communication between humans and machines—and between machines. The time is right to identify the next generation of innovative technology leaders that are transforming the world’s industrial economies and unlocking strong equity return potential along the way. 

Technology is expected to have a big influence on the global economy over the coming decade. So, despite sharp declines in technology shares in 2022, the sector should still play a role in investors’ portfolios in the search for long-term return potential.

Investment Solution

AB’s International Technology Portfolio seeks to invest in innovative and disruptive companies that have the potential to generate attractive financial returns. Target companies include disruptors, or business that dramatically change the status quo through innovation; and enablers, leading companies with creative solutions that drive positive changes in current demand. All portfolio candidates must offer strong durable growth potential.

AB International Technology Portfolio

The value of an investment can go down as well as up and investors may not get back the full amount they invested. Capital is at risk.

The Portfolio/Fund is meant as a vehicle for diversification and does not represent a complete investment programme. Prospective investors should read the Prospectus, which includes Sustainability-Related Disclosures, and discuss risks and the Portfolio's/Fund’s fees and charges with their financial advisor to determine if the investment is appropriate for them.
The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams and are subject to revision over time. 
AB offers open-ended Luxembourg-based funds under AB FCP I, a mutual investment fund (fonds commun de placement) organized under the laws of the Grand Duchy of Luxembourg and AB SICAV I, an open-ended investment company with variable capital (société d’investissement à capital variable) incorporated under the laws of the Grand Duchy of Luxembourg.
Not all of the strategies and products we offer are available and/or registered for distribution in all jurisdictions. The sale of funds may be restricted or subject to adverse tax consequences in certain jurisdictions.    

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