Lucrative investment themes
Whether artificial intelligence, climate change or the growing global demand for fresh water, there is a wide range of interesting thematic investment vehicles to choose from. Nevertheless, investors should not jump haphazardly on every moving "fashionable bandwagon" if their investment is to bear fruit. What is needed is a careful selection, a high level of expertise in implementation and the right timing.
The fact that thematic funds can be extremely lucrative is shown not only by the development of products focusing on AI and big data, which, according to the fund analysis company Morningstar, gained an average of over 24 per cent in one year as at the end of November 2023. Climate protection and water also achieved a remarkable performance, in some cases over a period of decades. For example, the "S&P Global Water" index - one of the most popular indices in the water sector - has gained 248.8 per cent since its launch in 2007, according to Bloomberg.
It is no wonder that thematic funds are becoming increasingly popular with investors. This is also reflected in the high inflows of funds recently recorded by the funds available in Switzerland. In the past three years alone, net inflows of funds totalled CHF 69.3 billion. Together with the marketmovements, this led to assets under management in theme-related investment vehicles of around CHF 226 billion (as at 30 September 2023). Compared to 2020, this corresponds to an annual increase of 9.3 per cent. In the same period, "just" 3.1 per cent flowed into the other actively managed funds each year.
In addition to the opportunity for above-average returns and the focus on a long-term, forward-looking megatrend with corresponding growth and success prospects, there are other good reasons why thematic funds are so popular with investors: By focusing on selected developments and megatrends, they overcome the traditional boundaries of investment funds - just as many companies themselves are no longer only active in one sector or geographical region. Thematic approaches are therefore increasingly being used to capture the growth drivers of such companies holistically.