More fund managers and retail investors are seeking investments in disruptive trends expected to make a big impact on the world – such things as artificial intelligence, driverless cars and cryptocurrencies.

AMP Capital recently released research on the opportunities for investors in autonomous vehicles, noting that there would be the potential to invest in infrastructure that supports the technology, utilities, communications and energy.

“The investment opportunity lies less in the makers of the autonomous vehicles of the future that currently beguile much of the media.  It’s the less glamorous infrastructure that will support the new technology and will require investment on a large scale, offering the potential of attractive risk-adjusted returns,” said AMP Capital global listed infrastructure portfolio manager Andy Jones.

“Listed and core infrastructure firms in these sectors, particularly first movers with a superior understanding of how commuters value their time, have substantial potential for growth and investors will be interested in the increasing inflation-linked and stable cash flows they will offer.”

Investment manager of global equities Andy Gardner said investors should be wary about focusing too much on the theme they were chasing when they made their investments. The same due diligence should be applied as to any other investment opportunity.

“Any company that you invest in needs access to growth, whether that’s structural or cyclical,” he said.

Companies with exposure to structural growth were a better bet than those that relied on riding a cycle up. They were less exposed to short-term market movements and should have resilience to a downturn if the underlying end market demand was still growing.

But Gardner said investors could also not rely solely on growth. Any company needed to be able to demonstrate a competitive advantage and the ability to allocate capital.

“The company could be poorly run with no competitive advantage,” he said. “Growth is not always a good thing.”

Investors needed to ensure they understood the economics of the industry, he said.

“A good example in the previous decade is investment in solar.”

He said while the number of solar panels being put on rooves had grown exponentially, the cost of production had dropped each year and there was more supply in the market. That drove down prices.

A company that sold ten units for $100 10 years ago making a 10 per cent margin might now only be shifting them for $1.  “Ultimately it’s making less money.”

Those who were late to a theme often bought in when the value was already high. “You’re relying on the greater fool theory… you get an influx of capital from people who don’t understand what they’re buying.”

That had been seen with Bitcoin over recent months, as the price dropped back record highs.  “That’s why you’ve got to be carful you invest in themes where you understand the underlying economics.”