Secular in Stock Investing: Meaning, 2025 Examples, and Strategy

Stock market jargon can be dense, but few terms are as pivotal for long-term investors as “secular.” In 2025, as market cycles whip up short-term volatility, understanding secular trends can help Australian investors make more confident, future-focused decisions. Let’s break down what “secular” means in the context of investing, why it matters, and highlight real-world sectors and stocks leading these powerful trends.

What Does ‘Secular’ Mean in Investing?

In finance, secular describes trends or movements that persist for years—often decades—regardless of the typical ups and downs of business or economic cycles. Unlike cyclical trends, which ebb and flow with broader economic forces, secular trends are driven by deep, structural changes: think demographics, technological breakthroughs, or shifts in consumer behavior.

For investors, spotting a secular trend early can mean riding a powerful wave of growth that outlasts market corrections and recessions. Examples of secular trends from the past include the rise of the internet, population aging, and the shift to cloud computing. In 2025, several new and ongoing secular trends are shaping both the Australian and global investment landscape.

Secular vs. Cyclical: Why the Difference Matters

• Secular trends: Long-term, persistent, driven by fundamental shifts (e.g., decarbonisation, digital payments, healthcare innovation).
• Cyclical trends: Move with economic cycles, such as consumer spending rising in a boom and falling in a recession (e.g., retail sales, construction activity).

Recognising the difference helps investors allocate capital to companies with lasting growth potential, rather than being caught off guard by short-lived booms and busts.

Secular Trends Driving the ASX and Global Markets in 2025

Let’s look at a few key secular trends and which stocks or sectors are riding these waves:

1. Renewable Energy and the Net Zero Transition

Australia’s commitment to net zero by 2050, reinforced by 2025 government policy updates and incentives for green infrastructure, is fuelling a secular shift toward renewables. Solar, wind, battery storage, and critical minerals are all in focus.

• ASX Example: Origin Energy (ORG) has doubled down on renewables, while Pilbara Minerals (PLS) is riding the lithium boom, vital for EV batteries.
• Global Example: Tesla and NextEra Energy continue to benefit from global decarbonisation.

This secular trend is expected to persist, regardless of short-term volatility in energy prices or interest rates.

2. Digital Transformation and AI

The shift to digital services and AI adoption across industries is a textbook secular trend. In 2025, AI is reshaping everything from banking to healthcare to logistics, with billions flowing into automation, data analytics, and cloud infrastructure.

• ASX Example: WiseTech Global (WTC) provides logistics software to power global supply chains, a sector seeing durable demand as businesses automate.
• Global Example: Microsoft and NVIDIA are leaders in AI infrastructure and cloud services, both benefiting from relentless enterprise investment.

3. Ageing Population and Healthcare Innovation

Australia’s median age continues to climb, and so does demand for healthcare, aged care, and medical innovation. This demographic-driven trend is considered secular because it’s underpinned by long-term population dynamics, not just economic cycles.

• ASX Example: CSL Limited (CSL) is a biotech leader with a global footprint in vaccines and plasma therapies.
• Global Example: Johnson & Johnson and Pfizer are innovating in pharmaceuticals and healthcare devices.

Government policy in 2025, including increased funding for Medicare and research, reinforces this secular trend’s longevity.

How to Spot and Invest in Secular Trends

Identifying secular trends early can give your portfolio a structural edge. Here’s how to approach it:

• Follow policy and demographic shifts: Government targets (like net zero) or ageing populations often underpin secular themes.
• Look for persistent, cross-cycle growth: Companies that grow through recessions and booms are often riding secular trends.
• Diversify across themes: Don’t put all your eggs in one basket—build exposure to several secular trends to manage risk.

Exchange-traded funds (ETFs) focused on megatrends or sectors (such as global clean energy or technology) offer a simple way for Australians to gain diversified exposure to secular themes.

Conclusion: Why Secular Trends Belong in Every Investor’s Toolkit

In 2025’s rapidly evolving landscape, secular trends offer investors a compass for long-term growth. Whether it’s the green energy transition, digital transformation, or healthcare innovation, understanding and investing in these persistent themes can help Australians build portfolios that outlast market cycles and capitalise on deep structural change.