Thematic investing
Going beyond storytelling for true alpha and impact generation
Thematic investing is a great way for investors to take advantage of the structural socioeconomic changes and sustainability challenges that are shaping our future. It takes ingenuity and foresight to grasp the full consequences of such profound changes, which often tend to be underestimated. Viewing the world through a thematic lens helps to see the real opportunities.
The Big Book of Trends and Thematic InvestingPicking the winners
A growing body of academic literature shows that a tiny fraction of listed stocks account for virtually all of the value created. The vast majority of companies simply don’t create wealth for their shareholders – from a long-term perspective. Thematic investing narrows down the investable universe, helping investors to focus on high-conviction themes in our economy, society and the state of our planet.
Exponential growth. New business models. Disruption. Sustainable investing. Making a real impact. Anticipating and taking advantage of these types of structural shifts and developments is our main objective in thematic investing.
To go beyond just telling great stories about themes, we dive deeper into the profound drivers and changes behind them, using our deeply rooted research-driven approach. This enables us to identify the themes that will shape our world over the next decade(s).
We combine our approach with active management to construct portfolios with high-conviction holdings that carefully weigh earnings growth against valuation levels.
That’s how we’ve built up a leading thematic capability: one of the largest globally. One that enables us to monetize these trends and to contribute to our aim of successfully generating alpha.
Megatrends
Thematic investing is not about going with the flow but anticipating the flow. And that flow is shaped by three megatrends: Transforming Technology, Changing Sociodemographics and Preserving Earth.
Think of fintech and digital. Widespread digitalization is disruptive in many ways. In some cases, it can lower the barrier for companies wanting to enter new or existing markets. In other cases, digitalization can help by circumventing the middleman. We aim to monetize the digitalization, in financials, manufacturing or the consumer side.
Or think of the new generations of digital natives and a rising middle class in emerging countries such as China and India. Increasing wealth in emerging countries is creating a surge of opportunities for consumer products and services.
The growing importance of new generations will also change long-term prospects in terms of consumer spending, inflation, economic growth and politics.
Think of global sustainability challenges. Climate change, resource scarcity and chronic health issues are all examples of real-world obstacles that reduce society's optimal development. But they also offer long-term value opportunities such as investing in solutions to make energy clean, affordable and reliable; or investing in solutions that help to efficiently manage water resources.
Companies creating solutions possess substantial competitive advantages and are benefiting from these megatrends.
