With traditional portfolio construction techniques such as the classic 60:40 equity/bond split looking increasingly stale, more and more investors have been taking a thematic approach.
Although still a relatively nascent area, it is fast-growing, with assets in thematic funds more than tripling to $595bn (£428.6bn) worldwide from $174bn three years ago, according to Morningstar.
The Covid-19 pandemic accelerated this trend as investors took note of the huge gains made by specialist funds focused on areas such as technology and clean energy.
But what should investors look out for? We asked the experts and one key risk that emerged is ending up holding the same stock in several different funds, with several big firms fitting into multiple thematic buckets.
Speakers in this video include:
- Joe McDonnell, head of EMEA portfolio solutions, Neuberger Berman
- Kenneth Lamont, senior research analyst, Morningstar
- Anu Narula, head of global equities, Mirabaud