UBS latest report: What are the long-term investment directions to bet on by 2025? These five major themes are highly favored.

In September 2025, UBS Chief Investment Office (CIO) released its monthly report focusing on valuation, momentum, and quality indicators of Long-Term Investment themes, combining quantitative models and analyst qualitative judgments to identify the most attractive entry points for current themes, while also highlighting areas where caution is advised in the short term. Notably, "Identifying the next frontier market" entered the Top 5 for the first time, while "Fintech" steadily climbed from its previous fifth position. In the short term, UBS suggested investors reduce exposure to "Gene Therapy" and "Medical Technology," prioritizing the five major themes including the Digital Consumer. Key Conclusions: 5 major themes for long-term investment "top achievers" UBS conducted model analysis (covering valuation, momentum, quality, and other quantitative indicators, along with qualitative factors such as CIO's overall views, risks, and catalysts) to determine that the Top 5 long-term investment themes are currently the best entry choices. These themes are: The digital consumer Diversity and Equality Enabling technologies Fintech Identifying the next frontier market It is worth noting that "Identifying the next frontier market" entered the Top 5 for the first time, while "Fintech" steadily climbed from its previous fifth position. In the short term, UBS advised investors to reduce exposure to "Gene Therapy" and "Medical Technology," while prioritizing the aforementioned five major themes. In-depth Analysis: Investment Logic and Entry Reasons for the Top 5 Themes 1. The Digital Consumer: Young people reshaping consumption, AI as a key variable Investment logic: Generation Z and other young groups are "digital natives," with consumer habits vastly different from previous generationsvaluing "shared experiences" over physical possessions (e.g., esports, online delivery). The rise of digitalization has increased decision-making touchpoints, with AI disrupting traditional areas like travel and entertainment, in addition to emerging trends like the metaverse and social media, presenting core opportunities for this theme. Reason for investment now: Ranked first this month! Core strength lies in "excellent quality"related company balance sheets are stable, with a high return on invested capital; combined with a rebound in the technology sector driving momentum, the only caution is that valuations are relatively high due to a focus on growth paths. 2. Diversity and Equality: Policy and economic dual drive, long-term profitability expected Investment logic: Global regulations are gradually pushing companies to disclose diverse data and reduce disparities (slow progress in the United States). Studies show that increasing diversity can narrow social wealth gaps and potentially drive GDP growth over the next decade; additionally, shareholder focus on issues like "equal rights" and "fair pay" is increasing, making companies with diverse structures more likely to outperform the market in the long run. Reason for investment now: Reasonable valuation, high quality score, consistent with UBS's overall view; more importantly, this theme is cross-industry, with defensive, value, and growth attributes, strong risk resilience (watch out for short-term risk of legal challenges in some U.S. states regarding equality actions). 3. Enabling Technologies: AI leads technology integration, market size to reach $2.6 trillion by 2030 Investment logic: Generative AI accelerates technology integration, with UBS bullish on five categories of "enabling technologies"artificial intelligence (AI), augmented reality/virtual reality (AR/VR), big data, 5G, and disruptive technologies (Moonshot Technologies). These technologies will reshape multiple industries, with a high proportion of software and hardware (especially semiconductors), poised to achieve "low double-digit" profit growth over the next decade. Reason for investment now: Strong momentum performance, attractive valuation, and a high focus on the IT sector (current sector with strong momentum). UBS predicts the AI market size to reach $2.6 trillion by 2030, with a compound annual growth rate (CAGR) of 41% from 2024, where income from the "empowerment layer" will be higher. 4. Fintech: From "wild growth" to "profit priority", low-interest-rate cycles provide momentum Investment logic: Urbanization, demand from young groups, and policy support will drive the fintech industry's revenue from $310 billion in 2024 to $580 billion in 2030. UBS recommends focusing on leading payment companies, platform-type companies, and "disruptors" in emerging technology areas like distributed ledger, cloud, and AI. Reason for investment now: Continued improvement in momentum, aligning with UBS's positive view on the U.S. financial sector. After experiencing a sharp decline in valuations in the past two years, fintech companies have restructured their businessesmoving from "pursuing scale" to "profit growth," coupled with advances in AI, regulatory emphasis on bank technology capabilities, and the start of a low-interest-rate cycle, creating a continuously improving industry environment. 5. Identifying the Next Frontier Market: Emerging economies drive global GDP growth Investment logic: Over the next decade, emerging and frontier economies will be the core drivers of global GDP growth with over 50% of the world's top ten developing economies' population share in 2024, some markets can transform economic growth into corporate profit growth under the dual advantages of "population structure + productivity" (not all high-growth economies have strong stock markets). Reason for investment now: U.S. fiscal deficits widening, the weakening of the U.S. dollar, increasing attractiveness of emerging markets; investors looking to diversify U.S. asset exposure will favor these markets; additionally, interest rates may decrease in the second half of the year, benefiting emerging market stocks; global economic data shows resilience, making it difficult to see a comprehensive recession in the short term, providing support for emerging markets. Short-term warnings: Be cautious with these 2 themes, 1 theme showing improvement (1) Gene Therapy & Medical Technology: Lack of catalyst in the short term, advisable to avoid for now These two themes currently rank lower in quantitative models (low momentum and quality scores, insufficient attractive valuation), and analysts have not identified any "short-term positive catalysts" that could improve their rankings: Gene Therapy: The biotech industry (especially small and medium enterprises) faces severe capital constraintswith early-stage cash-burning companies experiencing cash flow pressures following the burst of the biotech financing bubble in 2021, investor sentiment is low, and clinical research and commercialization progress are hindered; Medical Technology: Overheated capital in 2020-2021 inflated valuations (mostly based on "digital disruption expectations" rather than actual business models), current companies need to prove their profit and scalability capabilities, but growth in users has been challenging to convert into sustainable income, and obstacles like medical insurance reimbursements and regulatory barriers have slowed down digital healthcare implementation. For those looking to invest in the healthcare sector, UBS recommends the "Longevity TRIO theme"related companies are mostly large-cap stocks with stable cash flows, not reliant on the capital market, and driven by clear structural growth drivers. (2) Intelligent Transportation: Valuation recovery + technological breakthroughs, worth reconsidering The previously low-ranked "Intelligent Transportation" theme, due to improved valuation and momentum, has moved off the "cautious list": in the long term, decarbonization of automobiles is an inevitable trend; short-term positives include the September Munich IAA car show showcasing the latest developments in electrification and autonomous driving (such as fast charging batteries, L3 level conditional autonomous driving), and the industry's current undervaluation (especially traditional car companies), with pessimistic sentiment already excessively reflected. Recommendation: Investors already holding positions can maintain them, while those not invested can gradually monitor relevant opportunities. Underlying Logic for Long-Term Investment: 3 major trends are irreversible UBS emphasizes that the core support for all long-term investment themes comes from three irreversible global trends, which are crucial in evaluating whether a theme can withstand cycles: Population growth: The United Nations predicts global population will increase from 8.1 billion in 2024 to 9.7 billion in 2050, exceeding 10 billion by 2100, mainly driven by middle- and low-income countries; Urbanization: Global urban population share was 55% in 2018 (only 30% in 1950), projected to reach 68% by 2050, with 90% growth coming from Asia and Africa; Aging population: By 2024, one in ten people globally will be aged 65 or older, rising to one in six by 2050, with developed countries like Europe and the United States experiencing more severe aging populations (one in four people aged 65 or older). Three Tips for the Average Investor Diversified allocation: Do not bet on a single theme, reduce drawdown risk through multi-theme investment; Long-term commitment: Short-term economic cycles may affect theme performance, but core drivers of the top five themes (such as AI and emerging market growth) are long-term trends, so avoid frequent trading; Risk awareness: Past performance does not guarantee future performance, all investments may face partial or complete losses, and if unfamiliar with theme details, seek advice from professional advisors. This report provides us with a "map" for long-term investment in 2025 and beyondavoiding short-term pitfalls, focusing on logically supported tracks may be the best strategy to navigate market fluctuations.