From the war in Ukraine to ongoing conflicts all over the Middle East, geopolitical risks to global economic growth have caused investors to look for ways to best optimize their portfolios in case of further escalation.

PwC Principal and Geopolitical Investing Practice Global Head Alexis Crow to identify the biggest geopolitical risks and the best ways for investors to optimize their portfolios to take advantage of these situations.

Crow elaborates on 3 things to consider in today's geopolitical environment, the first being ongoing conflicts in the Middle East and how it is affecting oil prices, and then: "Number two is the extent to which the tension between the United States and China is driving a fragmentation of global supply chain activity. So that's actually moving a lot of exporters and manufacturers to move from... just in case to just in time mentality. So that's also driving up pricing. I would say that the extent to which that also is creating opportunities is one to consider."

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Editor's note: This article was written by Nicholas Jacobino

Video Transcript

- So as you look across the geopolitical landscape and you look at the next one year to five years, what is the single thing that would provide the biggest-- pose the biggest risk to global economic growth amongst the things we talked about and maybe something we haven't talked about?

ALEXIS CROW: Firstly, I would say if you look at the price of oil and you plot that over global GDP, you can see very quickly the extent to which $100 oil can quickly prompt and catalyze a global recession. So that's, I think, the first thing that we would be focused on is as the conflict in the Middle East becomes more deeply entrenched with perhaps not a clear end in sight, an endgame in sight, I think that's number one.

Number two is the extent to which the tension between the United States and China is driving a fragmentation of global supply chain activity. So that's actually moving a lot of exporters and manufacturers to move from that just in time or just in case to just in time mentality. So that's also driving up pricing.

I would say that the extent to which that also is creating opportunities is one to consider. So the extent to which the diversion of capital from mainland China into India, into emerging Asia, a lot of investors seeking EM exposure ex-China, I think it will create opportunities. I'd also say that the energy transition is creating opportunities from the unit of carbon all the way down to the renewable space. And so I think we look at some of the cohesion of different actors around creating corridors and mineral supply chains I think will be interesting.

- And for viewers who are listening right now, Alexis, investors looking for other ideas too, one big theme you say to focus on looking ahead is longer lifespans. What does that mean exactly, Alexis? How do you invest in longer lifespans?

ALEXIS CROW: It means different things in different geographies. So in the US, I would say that we're very much accelerated down the longevity spectrum where you have people going for blood transfusions, et cetera. But I would say that while our health care system remains deeply broken, you still see US consumers pivoting and spending more out of pocket on alternative forms of medicine. So I would say that's one thing.

In Europe, this could be medical tourism just given France is the most visited country in the world. The medical tourism space there is probably undersaturated. It's heavily fragmented.

I would also say, look at wealth management in Japan. The yield on Japanese bonds not necessarily very attractive. And so if I'm thinking about supporting household wealth creation for pensioners in Japan, I think that's also an opportunity.

- Interesting. Another reason to go to France, I guess. Thanks, Alexis. Thanks so much. Good to see you.