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Rachel Welch

05 November 2022 83 Read Resources

What Is Thematic Investing?

Thematic investing is a strategy that seeks to identify macro-level trends and invest in underlying investments that will benefit from the materialisation of those trends. It aims to create a more diversified portfolio and reduce risk by targeting specific investments. There are several different types of thematic investing strategies, and each has its own advantages and disadvantages. For example, investing in natural resources such as oil or gold is considered a thematic strategy.

Themes can be focused on various topics, and investors may want to invest in companies with strong social or environmental commitments. Themes can also be related to consumer products. For example, the popularity of the iPod lifted the stock of Apple and other tech companies. Investors saw this as an opportunity to capitalize on Apple's success and anticipated that it would lead to larger changes in the industry.

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