When it comes to identifying themes, investors may consider:
From air travel to advanced computing, technological breakthroughs have had a profound impact on global markets in the past.
By identifying today’s breakthroughs, investors aim to capitalise on the implementation of new technologies.
Demographic changes, such as ageing populations, immigration or urbanisation, create new challenges – from providing healthcare to building reliable infrastructure.
Thematic investors may choose a particular demographic phenomenon, and invest in companies that take aim at the associated challenges.
- Sustainable development goals
Thematic investors may also choose themes based on the United Nations’ Sustainable Development Goals.
All member states adopted these goals, which run the gamut from ending hunger to creating gender equality, in 2015.
Some investors may capitalise on support for these long-term aims by investing in the organisations responding to them.
When choosing an investing theme, key factors are growth expectations, in combination with a so-called catalyst that drives growth in the short-term. Good examples of catalysts are a new government policy that includes incentives to consumers or companies, or a significant trade agreement between countries or regions.
– Jean-Paul van Oudheusden, market analyst at eToro
Below are a few major themes investors might consider:
The transition away from polluting fossil fuels will be necessary to reduce the impact of climate change on people and the environment.
This process will require major infrastructure changes and ongoing technological development.
- Artificial intelligence and automation
Artificial intelligence (AI) is a type of technology that aims to replicate – or improve on – human problem-solving skills.
AI has received significant attention in recent years, with the launch of large language model chatbots such as OpenAI’s ChatGPT.
From self-driving vehicles to medical diagnosis, AI and automation have the potential to transform practically every aspect of human life.
Companies involved with the development and implementation of AI have become popular investment options.
With falling birth rates and increased longevity, the global population is, overall, ageing.
In fact, according to the World Health Organisation (WHO), global life expectancy increased by more than six years in the period between 2000 and 2019.
An older population will have different needs and preferences – particularly when it comes to healthcare – which could create new markets and opportunities for companies in this sphere.
The transition from petrol and diesel to battery-powered vehicles is another key trend that some thematic fund managers have identified.
In a bid to support this transition, the UK government has set a target of installing 300,000 public EV charging points by 2030.
Many organisations could benefit from this push, including car manufacturers, infrastructure providers and the mining companies that source precious metals vital to the production of EV batteries.
