Finding Hidden Value in the Future of Global Security

Companies supporting efforts to create a more secure and stable world could provide equity investors with an attractive source of long-term returns.

The quest for a secure future has risen to the top of national agendas everywhere. We believe a growing focus on energy transition and security, supply chains and cybersecurity will create real long-term opportunities for equity investors in an array of companies.

In a world of macroeconomic and geopolitical risk, equity investors are seeking sources of earnings growth that are driven by durable structural trends. From trade tensions to the pandemic to inflation and war, a sense of insecurity has shaken markets over the last several years. Deglobalization compounds the challenges. Governments are scrambling to safeguard their societies and economies.

Three themes are at the center of efforts to support the security of the future: energy transition and security, supply chain security and national defense/cybersecurity. We believe spending on these themes through 2030 could approach levels close to the amount of investment in cloud computing and e-commerce over the past decade, with growth rates that are well above the average for the broader US market (Display).

Three Security Themes Poised for Strong Long-Term Growth