How Can Thematic Investing Address Investors’ Needs in the Age of #TheZero

Technological disruption, climate change and lifestyle changes are a few of the global themes that are transforming our daily lives, and are presenting interesting opportunities for investors. Understanding and being able to identify the most relevant themes is critical in order to achieve long-term returns in the age of #TheZero, Keiko Kondo, Deputy Head of Multi-Asset Investment Asia and Jason Yu, Head of Multi-Asset Management, Asia told the audience on day one of Schroders’ flagship investment conference for clients across the Asia Pacific region#.

Keiko Kondo commented:

“Thematic investing is often associated with trends that address the transformation in the daily lives that people experience. However, the themes to invest in must be durable, disciplined and investable, meaning they need to be structural and has a reasonably sized investment universe. Taking a “multi-thematic” and “multi-asset” approach to thematic investing enables investors to tap into a broad set of opportunities across the globe, whilst managing the risks associated with investments in companies with long-term growth potential.

“When managing our global multi-asset thematic strategy, we focus on three core themes: Innovative Transformation, Cities and Lifestyles, and Environment and Sustainability. Technology is often at the heart of these three themes, but we need to look beyond the obvious and consider what is happening behind the scene to fully realise the potential.

Jason Yu commented:

“People’s increasing awareness of ESG and climate change, coupled with the net zero targets set by various governments, means that demand for renewable energy – which currently accounts for a small part in the global energy mix – will rise, bringing forth attractive investment opportunities in this area. For example, wind power is one subsector that stands out from an investment perspective, amongst others, and we should think a level deeper such as opportunities in the transfer and storage of electricity produced by wind turbines.”

Keiko Kondo added:

“Take Innovative Transformation as an example, 5G is obviously one of focal points but it is not just about faster internet speed – we should think about its wider application such as autonomous driving, real-time traffic control and environment monitoring, which all help to improve our daily lives.

Jason Yu added:

“Around Cities and Lifestyles, the increasing use of e-commerce has brought in worldwide sales of US$ 4 trillion in 2020 and this is expected to grow to US$5 trillion in less than two years’ time. We are already seeing e-commerce retailers increase the use of artificial intelligence and robotics in their platforms and warehouse systems to cater to the growing demand.”

#On 29 and 30 June 2021, Schroders engaged financial industry professionals and business leaders at its flagship investment conference for clients across Asia Pacific to discuss the potential levers investors can pull to drive sustainable investments in #TheZero environment – whether it is in the interest rate policy, return on traditional income investments, the rising urgency to reach net zero emissions, or in a world where zero action means zero results.

A diverse line-up of thought leaders discussed a range of topics, from the role that policy makers and investment managers play, to exploring new investment themes and solutions that have opened up for investors in the dynamic age of #TheZero, with a particular focus on private markets, income investing, China, thematic investing, energy transition and climate change.

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