It’s no surprise that banks and miners dominate listed Australian equities. These quality businesses have also delivered for investors. But with big investment themes emerging, other companies are also well positioned to deliver growth for the future underpinned by big tech and geopolitical changes.

The rise of artificial intelligence, energy transition and food inflation were among some of these changes explored at the recent Livewire event. Leading investors shared with the audience how they are positioning their portfolios to take advantage of the growth that comes from these big shifts. Not surprisingly, many of these companies are global.

 Aphinity’s Mary Manning prefers to invest in the “energy efficiency” play as opposed to “energy transition”. This is because energy transition is a long-term story. Manning acknowledges that there is a “disconnect” between the time frame of energy transition and the time frame under which most investors expect returns.

“The energy transition is not just about renewables; it is also about energy efficiency,” she says. Manning identified French business Schneider Electric (PAR:SU) which focuses on automation and energy management as a stock that has also performed well. Morningstar sees this wide-moat business as well-positioned for secular growth. The company’s electrical and industrial automation products will benefit from structural themes such as the energy transition, digitisation and the reshoring of manufacturing facilities that will also support organic revenue growth.

Her assessment is backed by Antipodes Partners’ Jacob Mitchell who believes it is the “boring companies” that are the “climate champions”. Big companies are not going to occupy office buildings with less than a 6-star efficiency rating, according to Mitchell, another Morningstar medalist fundie. Therefore, opportunities are found in the companies that make the insulation or the electrical equipment that drives this energy efficiency. Mitchell likes the Irish small cap business Kingspan (DUB:KRX). Kingspan Group manufactures and sells its building insulation to the commercial, residential, and data storage industries throughout the world.

Artificial intelligence is also an obvious investment theme and is on the radar of many investors. However, for Munro Partners’ Nick Griffin, it is the tech giants that are best positioned to benefit from this technology. He prefers a business like Microsoft (NAS:MSFT) which he believes is best placed to monetise the value of AI. The big business is doing this by including AI in its search engine and its other products including Microsoft 365, branded as Microsoft Copilot. “Think about a word document that can be turned into a PowerPoint presentation. They have already announced that they will charge users $30 per month (for this technology) and by using simple maths that is a 15% earnings upgrade for Microsoft,” says Griffin.

Inflation remains a thorny issue for investors and according to WAM’s Dania Zinurova, food inflation is here to stay. Geopolitical tensions remain particularly with the Ukraine War which will only add to challenges around food supply. Here Australia is well positioned and Zinurova highlights food producer Costa Group (ASX:CGC) as being well positioned in this environment. Morningstar forecasts earnings improvement in 2024 particularly as strong growth in its Chinese business more than offset domestic weakness in its last fiscal 2024 results. However, Morningstar also highlights it is a risky business and as such has a high uncertainty rating.