BNP Paribas Asset Management and BNP Paribas Corporate and Institutional Banking, in partnership with Coalition Greenwich, have sponsored new research into thematic investing. The survey canvassed institutional investors and intermediaries across the globe to understand their objectives, preferred themes, selection criteria, and investment plans.
Key highlights include:
- 52% of investors are currently using or planning to use thematic investing, and 70% of thematic investors plan to increase their focus over the next three years
- Achieving a positive impact / contributing to sustainable outcomes is the main overall objective in using thematic investing, with enhancing investment returns the second most important
- Healthcare innovation and robotics & artificial intelligence are the most appealing innovation and disruption themes, while the most appealing sustainability theme is renewable / clean energy followed by climate change solutions
- US investors’ appetite for thematic investing is much lower compared to Europe and Asia
- 84% of all investors think that employing thematic investing has a positive impact on long-term investment performance. Equities are the preferred assets for investing thematically, though investors are split over benchmarks (sector vs broad market).
To learn more, download the 2023 Thematics Barometer summary report.
- Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This material does not constitute investment advice.
The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.
- Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).
- Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.
Environmental, social and governance (ESG) investment risk: The lack of common or harmonised definitions and labels integrating ESG and sustainability criteria at EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name but have different underlying meanings. In evaluating a security based on the ESG and sustainability criteria, the Investment Manager may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, (the Sub-Fund's) performance may at times be better or worse than the performance of relatable funds that do not apply such standards.