There is a difference, of course, between actively managed, thematically focused global funds and smart beta, much of which aims to track a specific factor rather than a specific theme, but the increased use of both is indicative of the fact that investors are looking for new ways to think about both asset allocation and portfolio construction.
Simon Edelsten, manager of the Artemis Global Select Fund, who runs his fund on a thematic basis agrees that there has been a notable pick up in global thematic investing.
Partly, he says, because thematic investing is about finding revenue growth.
“In the earlier part of this bull market that began in 2009, the rise in equities was pretty indiscriminate. But, now, given the multiples you are paying, you need to know that there is growth behind it,” he explains.
Rather than trying to outguess the markets, Edelsten says that funds like his try to base their portfolio around the small parts of the economy that continue to grow steadily. And, in a low growth world it is understandable that such a strategy has appeal. Of course it is not always a successful strategy and, like all others, needs to come with all manner of disclaimers, but given the current state of things, it is clear that new ideas are needed.
For Sarasin and Partners, chief information officer Guy Monson, the outlook for thematic investment look pretty good, partly because of the quatitive easing (QE).
“The power central bank intervention has been so massive that, that one single theme: repression of interest rates has tended to crowd everything else out of the picture.
“If we are right and we are at the very beginning of a tightness in the US and some of those policies will be, if not reversed, reduced in scale and impact, that opens up a chink that will start to let out a wider thematic culture and there are some tremendously exciting drivers behind it that once the repression bull dozer moves out of the centre of the picture.”
