Thematic investing takes off

Insights, Technology
14.06.2021 Reading time: 2 minute(s)
Eine LED-Glühbirne in simpler Fassung mit Stromkabel, fotografiert vor schwarzem Hintergrund. Sie symbolisiert die Wende im Energiezeitalter: hin zu mehr Energieeffizienz und erneuerbaren Energiequellen

ABOUT THIS STUDY

As part of our thematic investing campaign, we wanted to learn and share with you how professional investors think about thematic investing. What themes are they looking at? Are they increasing their allocations? What are their concerns and how do they manage risks in their thematic portfolios? To find answers to these and other questions, we commissioned a study of 300 intermediary and institutional investors to get an in-depth analysis of what is shaping the thematic investing landscape and what are the possible future challenges and opportunities.

  

  

How ready are investors for thematic investments?

Our new research finds Europe’s institutional investors and intermediaries reaching for thematic strategies.

Growth in demand for thematic investment funds has accelerated over the past 12 months, with both active funds and passive vehicles picking up significant inflows. Assets under management in thematic exchange-traded funds more than doubled during 2020.[1] And in the active space, thematic funds defied the outflows seen in most sectors in 2020.[2]

This remarkable growth reflects a broad range of drivers. Even before the pandemic, several big-picture themes – including climate change, technology transformation, and demographic shifts – were attracting significant attention. But Covid-19 has served as a catalyst for many of these themes, and the market cycle also appears to have shifted in favor of thematic drivers.

This research therefore sets out to answer key questions:

  • To what extent have institutions and intermediaries embraced a thematic approach to asset allocation?
  • Which themes do investors and intermediaries find most compelling?
  • And how are leading thematic investment product providers seeking to respond to this appetite?


Investors are enthusiastic

Our survey of 300 leading institutional investors and intermediaries across Europe suggests that investors’ approaches to thematic investment are evolving and maturing. Some of these investors are changing their asset-allocation strategies in the light of the pandemic, as their views shift about where the greatest opportu-nities lie. Many are increasing their exposures to thematic funds and developing more holistic approaches, often encompassing multi-asset remits.

 

Infographics on the research results

Find out what institutional investors think about thematic investing and how they implement thematic strategies in their portfolios.

Download the infographics (PNG)

To the research findings

Study on Thematic Investing: the research results as an infographic ©Vontobel 2021

  

  

Research findings

Our research study on thematic investing has shown for both institutional investors and intermediaries:

“This research finds that the question is not whether to invest in thematic strategies, but how to do so effectively.”

Many are determined to raise their exposures to thematic funds, often taking the view that Covid-19 has strengthened the case for such investments. And they are embracing a broader range of themes, con-vinced that the structural drivers underpinning them will drive growth.

The challenge now is to execute on their ambitions and manage risk effectively. Respondents are look-ing for support and guidance on:

  • How to allocate assets across themes
  • How to select managers and hold them to account
  • How to manage risk and volatility
  • When to move on from particular themes
  • How to choose the right funds to secure thematic exposure

  

  

 

  

Metapher für das Thema «Chancen packen»: Eine Roboterhand versucht, eine Gänsefeder zu fangen, die langsam nach unten schwebt. © GettyImages

Megatrend “Technological Change”

New digital technologies are changing the world as we know it. How do they interact with other global megatrends? How are they shaping the future?

Read more about Megatrend Investing

  

How do I manage my portfolio by means of investment themes?

Our Megatrends team has identified 12 thematic approaches and made them investable.

Get to know the thematics

  

  

  

  

 

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