Why innovation matters to investors – Mellon

Why innovation matters to investors – Mellon

Mellon1 Head of Investment Strategy Sinead Colton discusses her view on the likely changes in investing in the coming months. 

Keeping on top of innovation could be the key to understanding market and investment trends over the next two years, according to Sinead Colton, Head of Investment Strategy, Mellon.

Speaking at the March BNY Mellon Global Investment Conference, Colton highlighted the automotive sector, healthcare and the tech sector as three areas likely to experience defining changes in the short-term. “Consider healthcare and how AI can improve efficiency,” she said. “A human specialist might take two to three hours using imagery to achieve a diagnosis. But using deep learning we can now achieve the same result within 60 seconds.”

Similar efficiency gains can be seen in the fields of remote radiography and drug development, she said, while the use of health monitoring devices, such as fit-bit, can now provide doctors with accurate measures of a patient’s health free from the inherent biases of self-reporting.

In the auto sector, Colton noted that, while there has been a degree of hype about self-driving cars, these are not likely to be with us in the foreseeable future. “Indeed, if anything, recent developments suggest self-driving cars, with their lower thresholds for risk, are heading in the direction of being quarantined from their less risk-averse human piloted counterparts,” she explained.

Instead, more tangible progress is being made in the area of ride-sharing, according to Colton, where it appears the traditional model of car ownership could become defunct in the coming years. “Young people, in particular, appear more comfortable with ride-sharing than with ownership and we believe this could cause a problem for traditional manufacturers down the line,” she added.

On the political front, Colton expressed her view that populism is here to stay. In previous decades, she said, household incomes could be expected to double roughly every 20 years or so. That was important, since it was tangible evidence that people’s lives were improving. But since the global financial crisis this is no longer the case. “In the immediate aftermath of the GFC we were looking at around 60 years for incomes to double – and now, even after 10 years of recovery from the GFC, we’re still looking at around 40 years. Clearly that has consequences for the wider political climate.”

  1. 1 Investment Managers are appointed by BNY Mellon Investment Management EMEA Limited (BNYMIM EMEA) or affiliated fund operating companies to undertake portfolio management activities in relation to contracts for products and services entered into by clients with BNYMIM EMEA or the BNY Mellon funds. Mellon was formed on 31 January 2018, through the merger of The Boston Company and Standish into Mellon Capital. Effective 2 January 2019, the combined firm was renamed Mellon Investments Corporation.