Thematic investing addresses today’s global equity investing shortcomings and represents an attractive and differentiated investment opportunity benefiting from the trends shaping tomorrow’s world.
Investing in the equity of a company consists in taking a view on its future and in assigning a value to it. And the same applies when dealing more broadly with stock markets to build a robust and attractive portfolio.
We, at Thematics Asset Management, are convinced there are better ways than others to frame our mind-set and our stock picking.
Thematic investing refers to the use of the best information we have on the future, namely the primary forces. These are far-reaching transformative shifts that give way to a whole new paradigm, affecting our lives in powerful and varying ways. They change how we behave and how we interact, the way we trade, the way we think and the way we live. They create new economic structures and new industries while marginalizing others. They affect the flow of money and are set to become a meaningful part of investment markets, though it can be easy to overlook their impact in the early days. Increased urbanization, an ageing and shrinking workforce, adapting to climate change, these are just some of the long term structural shifts that we see today and which we will increasingly need to face tomorrow.
Thematic investing focuses on markets that are growing faster than the broader global economy due to a range of long-term, secular growth drivers that remain consistent over time. It seeks out the businesses that will be at the forefront of long-term themes and identifies companies best positioned to benefit from the ‘primary forces’ which are believed to be the root causes of paradigm shifts – namely demographics, innovation, globalization and resource scarcity.
Successfully identifying and gaining exposure to one or several of these primary forces positions us at the source of unique and secular growth potential. Structuring a portfolio so it fits with the forces that are profoundly reshaping our world allows it to “sail with the wind”; ignoring or misinterpreting them would lead it to perpetually “sail against unseen and misunderstood tides”.
Speaker: Karen Kharmandarian
Chairman & CIO of Thematics Asset Management
Karen Kharmandarian is a founding Partner of Thematics Asset Management, Chairman and CIO. He is also the co-manager of the Thematics Artificial Intelligence & Robotics strategy. Karen has 25 years of industry experience, both on the sell-side and on the buy-side, of which 12 years of managing.