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Lulu Anderson
- September 24, 2021
Throughout history, contemplation on the future has been a subject of immense scrutiny, discourse, and contention.
However, this year, the swift ascent of artificial intelligence has drawn humanity’s future into sharper focus than ever before. Discussions concerning our trajectory, anticipated transformations, and the potential patterns or shifts that will define our society are pervasive.
Imagine not only engaging in discussions or reading about these evolving trends but also having the opportunity to invest in them.
Introducing Thematic investing, along with our recently launched series of meticulously constructed, globally diversified portfolios.
We are enthusiastic about this new portfolio range and the prospects it unlocks for investors. Here are four compelling reasons why.
1. You can invest in the trends shaping your future
The upcoming decades will be characterized by significant societal structural changes. These transformations present opportunities for investors: as we redefine our work, lifestyle, consumer habits, and resource utilization, the investment landscape also evolves.
Thematic investing offers the chance to invest in the prevailing trends and enables the selection of themes that demonstrate substantial potential.
Our investment team has crafted three forward-looking themes they believe offer an advantage.
Our first theme, Evolving consumer, concentrates on the ever-evolving needs and preferences of global consumers. This theme provides exposure to companies contributing to or benefitting from shifting spending habits and preferences, encompassing markets that drive trends in overall consumption, such as the expansion of middle classes in emerging markets.
The Technological innovation theme aims to provide exposure to sectors driving or benefiting from the ongoing evolution of technology, including robotics, artificial intelligence, and cloud computing.
The third theme centers on Resource transition. Over the years, the demand for energy and resources has risen alongside the global population, prompting a fundamental shift in our energy sourcing. This theme focuses on our current relationship with resources and their anticipated evolution, including mineral mining for electric vehicles, clean water, and renewable and non-renewable energy sources.
Investors have the liberty to select the theme they believe holds the greatest potential. Click here for a more comprehensive insight into these themes.
2. Enjoy exposure to a theme while remaining globally diversified
Thematic investing offers various advantages. It permits you to leverage the potential of specific areas within structural economic growth and invest once those trends are established, bypassing the early emergence phase where there is a risk of losing market interest. Consequently, the companies you invest in are more established, yet have the potential for continued growth in the future.
We have curated themes and ETFs that we believe are strategically positioned to contribute to or gain from these enduring structural changes. These themes surpass conventional sector or regional allocations, embodying a global and interdisciplinary approach. Opting for a Thematic investment style allocates a section of your portfolio to your chosen theme. The remainder is actively managed and diversified globally. This structure ensures the benefits of diversification and the active oversight of our investment team while dynamically aligning with your selected theme.
3. Your Thematic exposure is balanced against your risk level
These portfolios consist of two segments: a Thematic segment, investing in ETFs aligned with your chosen theme, and an actively managed segment, diversified across global ETFs.
The proportion of the Thematic segment relies on the risk level you select. The higher the risk level, the greater the exposure to Thematic investments. For instance, at risk level 5, the exposure to Thematic funds is 10%, and at risk level 10, the exposure to Thematic funds is 20%.
Our team will consistently oversee the asset allocation of your portfolio to maintain the proportions of each segment.
4. Have your portfolio managed by experts
Our forward-looking themes are not only enthralling but also continuously evolving. Through our Thematic portfolios, all you need to do is pick a theme you foresee developing in the long run, select a risk level between 5 and 10 that suits your preferences, and then leave the management to us.
The actively managed segment of your portfolio is overseen by our seasoned investment team, who regularly rebalance the portfolio and make strategic adjustments based on news, analysis, and market dynamics. The Thematic segment, focused solely on your selected theme, requires less frequent intervention due to the longer-term nature of the trends it invests in. Typically, our investment team conducts an annual review of the Thematic portion and rebalances it at regular intervals.
Our objective has always been to make investing more accessible, and this goal persists with the introduction of our Thematic portfolios. This offering provides the best of both worlds—empowering you to select a theme or area of focus while professionals manage your portfolio on your behalf.
If you seek to align your investments with the fundamental drivers of the future economy, our Thematic investing range might be the right choice for you. Click here for further details.
Additionally, if you have any inquiries about integrating Thematic investing into your broader investment strategy, you can schedule a call with a knowledgeable member of our team today.
Risk warning
Similar to all investment ventures, there is a risk to your capital. The value of your portfolio with Nutmeg may fluctuate, potentially resulting in both gains and losses, and there’s a chance that you might receive back less than your initial investment. Thematic investing involves particular risks and may not be suitable for all individuals. There’s no assurance that the evolution of a trend will lead to positive investment outcomes. It’s important to note that all Nutmeg themes, including Resource transformation, may not necessarily include Environmental, Social, and Governance (ESG) considerations. The Resource transformation theme may encompass exposure to diverse renewable and non-renewable materials and energy sources.