Thematic investing

Hey there! Welcome to the exciting world of thematic investing. This isn’t just about picking stocks or putting your money into some random index fund.

It’s about investing in the future, in trends, and in ideas that are transforming our world. So, are you ready to take a peek into the future with us?

Let’s go! 🕵️‍♀️

Understanding thematic investing

So, what’s thematic investing all about? Well, in simple terms, it’s about focusing on broader, ‘macro-level’ trends that are expected to shape our society and economy over the coming years or even decades.

This could include everything from artificial intelligence 🤖, clean energy, and e-commerce, to ageing populations and changing dietary habits.

With thematic investing, you’re not just buying a piece of a company. You’re buying into a story, a vision of the future. It’s a bit like being a sci-fi author, but instead of writing novels, you’re crafting your investment portfolio. Fun, right?

Thematic investing vs traditional investing

Alright, let’s take a minute to compare thematic investing with traditional investing. In traditional investing, you’d typically choose investments based on their individual characteristics, like a company’s earnings or the economic outlook of a specific country or industry.

Thematic investing, on the other hand, looks at the bigger picture. Instead of focusing on individual companies or sectors, it identifies powerful, cross-cutting trends that could drive the growth of many different companies across various industries and regions. It’s like switching from a microscope to a telescope!

For instance, if you were investing in the ‘clean energy’ theme, you wouldn’t just be looking at energy companies. You could also be investing in electric car manufacturers, battery producers, companies building energy-efficient appliances, and much more.

Think of it this way: traditional investing is like picking out individual trees, while thematic investing is about seeing the entire forest — and the ecosystem around it! 🌳

The origins and evolution of thematic investing 🌱

Now, let’s take a step back and look at how thematic investing has evolved over the years. It might seem like a trendy buzzword, but it’s actually been around for quite some time.

Thematic investing started to gain popularity in the 1970s and 1980s as investors began to recognise the potential of long-term societal and technological trends to drive economic growth. 

However, it wasn’t until the 2000s, with the rise of the internet and rapid technological advancement, that thematic investing really took off. 🚀

Remember the dot-com boom (and bust) of the late 1990s and early 2000s? That was a classic example of thematic investing (though admittedly, it was also a lesson in what can go wrong when hype outpaces reality).

More recently, we’ve seen massive interest in themes like clean energy, artificial intelligence, and remote work technology—trends that have only accelerated due to the COVID-19 pandemic.

Interestingly, according to a report by PwC, assets in thematic funds grew by an astounding 61% in the first half of 2020, reaching a total of $595 billion. So, it seems like thematic investing is here to stay! 💰

Wrapping up 🎁

So there you have it, a glimpse into the fascinating world of thematic investing. It’s about thinking big, imagining the future, and investing in trends that have the potential to change the world.

It’s not just about making money; it’s about being part of something bigger. And who knows, with the right knowledge and a bit of luck, you might just spot the next big trend before everyone else does!

In the next chapter, we delve deeper into the different themes you can invest in and how to spot a promising trend. 🥳

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Keep in mind that when you invest your capital is at risk.