Thematic investing – Feature
Investing in new and developing megatrends is far from a passing fad, discovers Andrew Holt.
to assess how their investments affect the environment and society, which boosted the interest for ESG-linked thematic,” Mattatia adds. Sustainability has been a theme for Evy Hambro. “We saw sus- tainable themes as being particularly resilient in this environ- ment, due to the long-term structural growth drivers behind the companies we invest in, coupled with the sustainable char- acteristics of these businesses.” Aanand Venkatramanan, head of ETFs at Legal & General Investment Management (LGIM), observes that restrictions resulting from the pandemic accelerated certain trends that were already underway. “To name a few, since the pandemic we have seen an increased adoption of the cloud, higher online retail volumes, a shift towards decentralised, remote health- care and an increased focus by companies towards global sup- ply chain resilience, inventory optimisation and automation installations.”
Here and now So, what megatrends are investors focusing on? “Now that the pandemic is fading, we are seeing more interest in thematic at the crossroad of environment and technology, like future
mobility, water and smart cities, which bring together the pre- pandemic priorities with the opportunities in a changed world,” Mattatia says. Predictably, inflation is another example that has grown in prominence as a global trend for investors. Hambro says the attraction of ESG themes will be a central the- matic going forward. “Sustainable thematic funds not only allow clients to access the long-term structural shifts that we are witnessing globally, but also have further consideration to those shifts that are necessary for the transition into a more sustainable world,” he says.
And as the world becomes more populated, prosperous and demanding on the planet’s resources, the pressures of climate change and resource scarcity rise. “We currently see climate change and resource scarcity as a key megatrend that we believe will disrupt all aspects of our everyday life. We are see- ing regulatory, societal and economic support, as we look to transition to a net-zero world,” Hambro says. “Sustainable the- matic funds invest in companies which are actively combatting these global sustainability challenges, within their respective themes,” he adds.
There is no doubt that assets in sustainable investing strategies have grown at a rapid pace. “This demand looks poised to
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