Thematics offer 'third way' of portfolio construction
Adopting an approach focused on thematics could be an alternative way for advisers to access global equities without being beholden to a particular market style, according to Zurich.
This would mean advisers were not beholden to consensus positions and could access global equities via themes such as technology, geopolitics and sustainability which gave them exposure to emerging trends.
Matthew Drennan, head of savings and investments at Zurich Investments, said: “Advisers are operating in an environment of seismic change, as profound transformations continue to ‘disrupt’ and shape our global economy. Key structural drivers for the next decade, identified through conversations with companies themselves.
“Clients are naturally seeking answers especially with respect to accessing long-term investment opportunities that take these structural changes into account.”
Zurich ran two thematic funds, in partnership with Lazard, Global Thematic Share fund and the Global Thematic Focus fund, which it said offered a “differentiated investment approach” with lower volatility than their benchmarks.
The first covered eight to 12 themes with 80 to 120 stocks while the Focus fund was more concentrated with 35 to 55 stocks across three to six themes.
“We believe in this differentiated, long-term investment approach offered by both strategies. This evolving, multi-theme approach best represents the reality that the world is undergoing rapid and profound change and we must stay ahead of these changes rather than assume comfortable constants,” said Drennan.
The Zurich Investments Global Thematic Share fund had returned 23.8% over one year to 31 May, 2021 according to FE Analytics, versus returns of 24.2% by the global equity sector within the Australian Core Strategies universe.
Performance of Zurich Global Thematic Share fund versus sector over one year to 31 May 2021
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Laura Dew
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