How to Buy
          11 min. read
          Rize ETF Market commentary October 31 2023

          Thematic Commentary – 31 October

          Thematic Investing

          Written by: Rize ETF

          Published: 9 November 2023


          In today’s rapidly evolving market, investors need to stay on top of the latest trends and themes that fuel growth. In this monthly publication, we offer our market commentary across our themes, covering new opportunities and potential challenges. By providing a deeper understanding of our themes, we aim to help you make more informed investment decisions and achieve your investment goals.

          nature, flower, blossoms

          Circular Economy Enablers

          Currys, a well-known electronics retailer based in the UK, has quietly developed a substantial repair and refurbishment business, generating GBP £676 million in sales in its last financial year. This division, part of the company’s “Long Live Your Tech” sustainability strategy, focuses on tackling e-waste by repairing, refurbishing, and recycling electronic devices. The retailer offers a range of care and repair plans and even vouchers for trading in used electronic goods. It has also partnered with eBay to resell used and refurbished electronics and is considering taking on product warranties from manufacturers.

          It boasts an impressive in-house repair operation that handled over 800,000 repairs last year.

          By spotting a business opportunity through monetising post-sale opportunities, Currys has not only embraced circularity but demonstrated that the pursuit of sustainability can also be a profitable endeavour.1

          Educational Tech and Digital Learning

          Internet history underscores the importance of verticals. Market leaders with a robust brand, specialised expertise, scale, and ample resources can stimulate growth and seize new opportunities through agility and adaptability. With almost one year having passed since the launch of ChatGPT, the most successful EdTech companies have combined their products with advancements in AI to create new opportunities to better serve students. Chegg recently unveiled its enhanced user interface and unified asking experience to an initial user group. This update enables Chegg to deliver answers from its extensive database of over 150,000 subject matter experts, bolstered by generative AI technology. The company is prioritising usage, quality, accuracy, and speed and is set to launch its own large language learning models, leveraging Chegg’s unique data. Over the next few months, Chegg will introduce multi-turn chat for a more conversational experience and AI-enhanced learning tools, including practise tests, assessments, study guides, and flashcards. Additionally, they plan to facilitate student connections and content sharing.2

          Nature, autumn, scenic views, trees

          Environmental Impact

          Many European nations still subsidise gas, coal, and oil heating but could these funds be allocated in a way that achieves the same positive outcomes whilst minimising environmental impact. According to a new report by the European Environmental Bureau, shifting just half of the funds currently allocated to fossil fuel heating subsidies in Europe to incentivise heat pumps could accelerate the transition to renewable home heating methods by 2040. The report found that heat pumps are more cost-effective than fossil fuel boilers in most EU countries but can have prohibitive upfront costs for many households. The analysis estimates that transitioning all European households to heat pumps would cost €21.3 billion over 15 years, falling to €14 billion with the introduction of a €100 per tonne carbon tax. Heat pumps have emerged as a key component of Europe’s climate policy, with high efficiency and widespread adoption in countries like Norway, Sweden, and Finland. However, some countries such as the UK have slowed down their phase-out of fossil fuel heating due to concerns about the cost of living.3

          Global Sustainable Infrastructure

          Infrastructure investment is now being disrupted by technological, environmental and social change.

          Conventional infrastructure risk categorisation systems are increasingly becoming obsolete, in a world where climate events (e.g. floods, hurricanes) threaten even historically ‘safe’ assets. Sectors like oil and gas now face energy transition risk and fully autonomous electric freight trucks pose a significant threat to traditional railways. Today, infrastructure investors must rethink what constitutes ‘safe’. Nowhere is this more evident than in historically ‘risky’ renewable infrastructure assets. 2023 milestones mark this change. Brookfield’s investment in UK-based Banks Renewables, backed by incentives from the $USD 369 billion Inflation Reduction Act, is expected to triple wind gigawatt capacity in the UK by 3x within 5 years. Acciona and Orsted’s collaboration on floating wind platforms, aiming to reduce cost and environmental impact through incorporation of new biomaterials, could signify a breakthrough in wind platform commercialisation. Meanwhile, EDP Renováveis is doubling its solar capacity in Asia Pacific in 2 years, with plans to triple this by 2026. This focus on environmental infrastructure should be a signal not just of where investment opportunities are, but also areas to steer clear of in the path to a more sustainable future.4 5 6

          sustainable food system, harvest season, plantbased

          Sustainable Future of Food

          The food industry has weathered some significant challenges recently. However, company earnings call analysis reveals that there is light at the end of the tunnel as recovery signs begin to emerge. Input price volatility is easing, with companies like Lamb Weston and Novozymes mitigating costs through pricing strategies and expecting future gross margin expansion. Costa Group reports a welcome decrease in shipping costs, signalling potential cost relief ahead. Supply chain disruptions are also abating. John Deere’s investment in AI and robotics indicates a positive outlook, despite past labour and supply challenges. Similarly, International Flavors & Fragrances and O-I Glass note volume rebounds as supply chain conditions improve. Consumer behaviour has evolved due to economic strains, affecting plant-based and animal-derived product sectors alike. However, the normalisation of consumer spending and focus on health suggests a stable outlook for plant-based foods. Credit and financing landscapes are tough, with companies like McCormick and Balchem feeling the pressure of rising interest expenses. Yet, they are proactively managing debt, reflecting their resilience. Most companies in the Sustainable Future of Food theme are profitable and we believe the food industry is poised for a rebound.7

          USA Environmental Impact

          References to the Inflation Reduction Act [“IRA”] continue their ubiquity in earnings calls for American companies that are supported by the $369 billion spending package.

          Here are some highlights from October earnings calls:

          “Additionally, the IRA, tax credits, and other local incentives aimed at promoting energy-efficient upgrades will encourage consumers to replace versus repair, as well as the boost the sales of higher-efficiency products.” – Heating, ventilation and air conditioning manufacturer Lennox International, Q3 2023 Earnings Call (26 October).

          “The infrastructure spending and fixed asset investment related to the IRA programs along with the reshoring of manufacturing, should provide momentum for additional construction spending through 2024, effectively extending the construction cycle.” – Steel products producer Steel Dynamics, Q3 2023 Earnings Call (19 October).

          “The $250 billion IRA is expected to support these projects and additional energy transition and manufacturing projects in the future, which presents a significant opportunity for CMC.” – Steel and metal manufacturer Commercial Metals Co, Q4 2023 Earnings Call (October 2023).8

          Cybersecurity and Data Privacy

          The cybersecurity market, projected to reach over $USD 650 billion by 2030, is being propelled by AI’s adeptness in detecting and averting cyber threats. This revolution in cybersecurity is underscored by recent reports from industry leaders like Palo Alto Networks and Cloudflare in their latest earnings calls.

          Palo Alto Networks has achieved a 97% decrease in false positives and a 60% enhancement in threat interception, crediting AI for these advances.

          Their CEO stated, “In the last 5 years, our Total Addressable Market (TAM) in cybersecurity has grown by approximately 14%, surpassing the IT market’s growth. With AI now a core tool, we’re capitalising on this by intensifying our technology investments.” Cloudflare reported an increase in the use of their R2 product, particularly among AI startups, signifying their growing preference for Cloudflare’s cost-efficient GPU usage for model training. These insights underline the pivotal role AI is playing in the evolution of cybersecurity offerings. We foresee that such technological advancements will allow cybersecurity firms to lower costs, make their products more affordable for the mass market, and consequently expand their TAM even beyond current scope, as many cybersecurity solutions are presently out of reach for this wider audience.9 10

          Digital Payment Economy

          Italian luxury sports car manufacturer Ferrari will now accept cryptocurrency payments for its vehicles in the United States and plans to expand the initiative to Europe. This decision was made in response to requests from customers, both traditional and crypto-savvy investors. The move is significant as most large corporations have been hesitant to embrace cryptocurrencies due to their volatility and regulatory concerns. Ferrari’s Chief Marketing and Commercial Officer, Enrico Galliera, emphasized that the company remains committed to carbon neutrality by 2030, addressing environmental concerns associated with cryptocurrencies. BitPay, a prominent cryptocurrency payment processor, will facilitate the transactions initially in bitcoin, ether and stablecoin USDC. The company has a strong order portfolio and intends to use cryptocurrency acceptance to expand its total addressable market.11


          Emerging Market Internet and Ecommerce

          Emerging markets faced challenges in October as bond yields surged and geopolitical uncertainties weighed on investor sentiment. The MSCI Emerging Markets and the MSCI Asia ex-Japan Index both fell by 3.9%, reflecting the impact of expectations for “higher for longer” interest rates and concerns surrounding global issues like the Israel-Hamas conflict. In China, the third-quarter GDP, industrial production, and retail sales brought positive surprises. However, persistent weaknesses in the real estate sector, along with reports of new US restrictions on AI chip exports to China, cast a shadow on market sentiment.12

          Medical Cannabis and Life Sciences

          In 2023, the UK has seen a substantial increase in the importation of medical cannabis, with over 23,890 kilogrammes imported as of September 19th, marking a more than threefold rise compared to the 7,762 kilogrammes imported in 2022. This surge in medical cannabis imports reflects a growing awareness of cannabis-based medicines and a rise in the number of patients receiving prescriptions. While the regulatory and policy landscape for medical cannabis in the UK remains complex, the Cannabis Industry Council’s CEO, Mike Morgan-Giles, is optimistic about the trend, anticipating that it will continue to expand. This growth not only has potential benefits for patients but also presents economic opportunities and job creation within the UK’s cannabis market.13

          Pet Care

          At the Indian Pet Industry Dialogue (IPID) held in New Delhi a few months ago, regional pet players discussed the outlook for the booming industry. The Indian pet industry is experiencing rapid growth with a 22% annual increase since 2020, driven by rising per capita income and a willingness to spend more on pet products and services. Key challenges include shifting pets from home-cooked diets to manufactured pet food, with increased product accessibility and pet nutrition education driving the transition. Grooming and accessories are among the fastest-growing pet categories, along with pet supplements and prescription diets. Opportunities for Direct-to-Consumer (DTC) companies are evident, but consumer awareness remains a hurdle. Investors are increasingly focusing on niche pet care sectors and innovative, solution-based products, such as biometric trackers and green alternatives to pet cremation.14



          Retail Gazette, “The repair shop: How Currys is thriving through the circular economy”, October 2023. Available at:


          Chegg, October 2023


          Bloomberg, “One Clear-Cut Fix Would Speed Up Europe’s Heat Pump Rollout”, October 2023. Available at:


          EDP Renováveis, October 2023


          Acciona, October 2023


          Orsted, October 2023


          Earnings calls of aforementioned companies, August to October 2023


          Bloomberg, October 2023


          Palo Alto Networks, October 2023


          Cloudflare, October 2023


          Reuters, “Ferrari to accept crypto as payment for its cars in the US”, October 2023. Available at:


          Bloomberg, October 2023


          Cannabis Industry Council, “UK medical cannabis imports triple in size”, October 2023. Available at:


          Global Pets, “These are the areas that are expected to fuel the Indian pet industry”, October 2023. Available at:

          Related posts

          • 1
          • 2
          • 3

          Select Your Country

          United Kingdom

          Select Your Investor Type