In September 2025, UBS Chief Investment Office (CIO) released its monthly report, focusing on valuation, momentum, and quality indicators for Long-Term Investment themes. By combining quantitative models with analysts' qualitative judgments, the report identified the most attractive entry point themes currently, while highlighting areas requiring short-term caution. Notably, "Identifying the next frontier market" entered the Top 5 for the first time, while "Fintech" steadily advanced from its previous 5th position. From a short-term perspective, UBS recommends investors reduce exposure to "Gene therapy" and "Medical technology," prioritizing digital consumers and other top 5 themes instead.

**I. Core Conclusion: 5 Major Themes Become Long-Term Investment "Top Performers"**

Through model analysis (covering quantitative indicators such as valuation, momentum, and quality, combined with CIO overall views, risks, and catalysts), UBS ultimately determined 5 major long-term investment themes as the current best entry choices:

1. The digital consumer 2. Diversity and Equality 3. Enabling technologies 4. Fintech 5. Identifying the next frontier

It's worth noting that "Identifying the next frontier market" entered the Top 5 for the first time, while "Fintech" steadily advanced from its previous 5th position. From a short-term perspective, UBS recommends investors reduce exposure to "Gene therapy" and "Medical technology," prioritizing the above 5 major themes.

**II. In-Depth Analysis: Investment Logic and Entry Rationale for the 5 Major Themes**

**① Digital Consumer: Young People Reshape Consumption, AI is the Key Variable**

Investment Logic: Generation Z and other young groups are "digital natives" with consumption habits vastly different from their parents - they value "experience sharing" over "physical ownership" (such as esports and online food delivery). Meanwhile, digitalization creates more "touchpoints" for consumption decisions, with AI disrupting traditional sectors like transportation and entertainment, combined with emerging tracks like metaverse and social media, forming the core opportunities of this theme.

Why Invest Now: Ranked first this month! The core advantage is "solid quality" - related companies have robust balance sheets and high return on invested capital. Combined with technology sector rebounds driving momentum improvement, the only concern is relatively high valuations due to focus on growth tracks.

**② Diversity and Equality: Policy + Economic Dual Drive, Long-term Returns Expected**

Investment Logic: Global regulations are gradually pushing companies to disclose diversity data and narrow gaps (with slower progress in the US short-term). Research shows that improving diversity can narrow social wealth gaps and is expected to drive GDP growth over the next decade. Additionally, shareholder attention to "equal rights" and "compensation fairness" issues is soaring, with companies having diversity systems more likely to outperform markets long-term.

Why Invest Now: Reasonable valuation, high quality scores, and consistent with UBS overall views. More importantly, this theme is diversified across industries, combining defensive, value, and growth attributes with strong risk resistance (though caution is needed regarding short-term risks from legal challenges to affirmative action in some US states).

**③ Enabling Technologies: AI Leads Technology Convergence, Market Size to Reach $2.6 Trillion by 2030**

Investment Logic: Generative AI has accelerated technology convergence. UBS particularly favors 5 categories of "enabling technologies" - Artificial Intelligence (AI), Augmented Reality/Virtual Reality (AR/VR), Big Data, 5G, and Moonshot Technologies. These technologies will reshape multiple industries, and with high software and hardware (especially semiconductor) components, they are expected to achieve "low double-digit" profit growth over the next decade.

Why Invest Now: Outstanding momentum performance, attractive valuations, and high focus on IT sector (currently strong sector momentum). UBS predicts AI market size will reach $2.6 trillion by 2030, with a CAGR of 41% from 2024, where "enabling layer" revenue will account for a higher proportion.

**④ Fintech: From "Wild Growth" to "Profit Priority," Low Interest Rate Cycle Adds Momentum**

Investment Logic: Three drivers - urbanization, young group demand, and policy support - will push fintech industry revenue from $310 billion in 2024 to $580 billion in 2030. UBS recommends focusing on leading payment companies, platform companies, and "disruptors" in emerging technology fields like distributed ledgers, cloud, and AI.

Why Invest Now: Momentum continues to improve, aligning with UBS's view of "favoring US financial sector." After experiencing valuation crashes in the past two years, fintech companies have restructured their businesses - shifting from "pursuing scale" to "profitable growth," combined with AI progress, regulatory emphasis on banks' technological capabilities, and the start of low interest rate cycles, the industry environment continues to optimize.

**⑤ Identifying the Next Frontier Market: Emerging Economies Become Global GDP Growth Engine**

Investment Logic: Over the next decade, emerging and frontier economies will be the core driver of global GDP growth - in 2024, the top 10 developing economies account for over 50% of global population. Under the dual advantages of "demographic structure + productivity," some markets can convert economic growth into corporate profit growth (not all high-growth economies have strong stock markets).

Why Invest Now: US fiscal deficit expansion and dollar weakness increase emerging market attractiveness. Investors seeking to diversify US asset exposure will favor such markets more. Additionally, interest rates may decline in the second half of the year, benefiting emerging market stocks. Global economic data shows resilience, making comprehensive recession unlikely in the short term, providing support for emerging markets.

**III. Short-term Warning: 2 Themes Require Caution, 1 Theme Shows Improvement**

**(1) Gene Therapy & Medical Technology: Lack Short-term Catalysts, Recommend Temporary Avoidance**

These two themes currently rank low in quantitative models (low momentum and quality scores, insufficient valuation attractiveness), and analysts found no "short-term positive catalysts" to drive ranking improvement:

Gene Therapy: The biotech industry (especially small and medium enterprises) faces severe capital constraints. After the 2021 biotech financing bubble burst, early-stage cash-burning companies face cash flow pressure, investor sentiment is low, and clinical development and commercialization progress is hindered.

Medical Technology: Capital overheating in 2020-2021 inflated valuations (mostly based on "digital disruption expectations" rather than actual business models). Companies currently need to prove profitability and scalability, but user growth is difficult to convert into sustainable revenue, and healthcare reimbursement and regulatory barriers slow digital healthcare implementation.

For healthcare sector exposure, UBS recommends the "Longevity theme" - related companies are mostly large-cap stocks with stable cash flows, independent of capital markets, and have clear structural growth drivers.

**(2) Smart Mobility: Valuation Recovery + Technology Breakthroughs, Worth Re-attention**

Previously low-ranked "Smart Mobility" has left the "caution list" due to improved valuation and momentum:

Long-term: Automotive decarbonization is an inevitable trend. Short-term benefits include two factors - September's Munich IAA auto show will showcase the latest developments in electrification and autonomous driving (such as fast-charging batteries and L3 conditional autonomous driving), and current industry valuations are too low (especially traditional automakers), with pessimistic sentiment overly reflected.

Recommendation: Existing investors can maintain positions, while new investors can gradually focus on related opportunities.

**IV. Underlying Logic of Long-term Investment: 3 Irreversible Trends**

UBS emphasizes that the core support for all long-term investment themes comes from 3 irreversible global trends, which are also key to judging "whether themes can survive cycles":

Population Growth: The UN predicts global population will grow from 8.1 billion in 2024 to 9.7 billion in 2050, possibly exceeding 10 billion by 2100, with growth mainly from low and middle-income countries.

Urbanization: Global urban population proportion was 55% in 2018 (only 30% in 1950) and will reach 68% by 2050, with 90% of growth coming from Asia and Africa.

Aging: In 2024, 1 in 10 people globally is ≥65 years old, rising to 1 in 6 by 2050, with developed countries like Europe and America experiencing more severe aging (1 in 4 people ≥65 years old).

**V. Three Recommendations for Individual Investors**

Diversified Layout: Don't bet on a single theme; reduce drawdown risk through multi-theme investment.

Long-term Persistence: Short-term economic cycles affect theme performance, but the core drivers of the above 5 themes (such as AI and emerging market growth) are long-term trends; avoid frequent trading.

Risk Awareness: Past performance doesn't guarantee future results, all investments may face partial or total losses. If unfamiliar with theme details, consult professional advisors.

This report outlines a long-term investment "map" for 2025 and beyond - avoiding short-term pitfalls and focusing on tracks with strong logical support may be the best strategy to navigate market volatility.