We think thematic investing should look forward, not backward, going beyond traditional benchmarks to access the disruptive trends and innovative companies transforming our world. Our Next Generation Thematic Team researches investment themes across the globe linked to economic development and applies decades of experience to seek the companies that, in our view, will benefit from these structural trends.
How investors can benefit from a thematic approach
The future is global
Our world is becoming more globalized, with businesses expanding their scale across sectors and countries. As a result, we believe global issues — such as climate change and social inclusion — and global opportunities require and benefit from global solutions.
The future is disruptive
Disruption is leading to a breakdown in traditional sector and industry definitions. Long-term investors should look across geographies, sectors, and industries to enrich their opportunity set. We believe active management is needed to take advantage of structural opportunities.
The future is hard to predict
Because opportunity sets are constantly evolving, flexibility is key. Our thematic approach helps facilitate dynamic portfolio positioning over multiple cycles. Discipline in risk management and position sizing is crucial. Above all, we retain a long-term focus on economic development.
Our three pillars of thematic investing
To identify opportunities within economic development, the Next Generation Thematic Team focuses on three key structural trends: inclusion, sustainability, and innovation.
Inclusion
Structural forces are broadening access to health care, education, finance, and the digital economy, creating new patterns of consumer behavior and preferences.
Sustainability
For economic development to be sustainable, we believe businesses need to consider future generations and the environment, giving rise to a greater focus on recycling, waste management, energy efficiency, and alternative sources of energy.
Innovation
Advances in technology will lead to increases in productivity while reshaping many facets of our lives, such as medicine, work, and consumer experiences.
meet some of our next generation thematic experts
Connect with the iStrat platform
Insights
Thematic investing focus: security in a world of great-power competition
In an environment of accelerating great-power competition and geopolitical instability, policymakers may place a higher emphasis on security – even at the expense of economic efficiency. What could this mean for thematic investors?
Multi-Asset Market Outlook
To help think through the asset allocation outlook and implications for 2023, we offer views from iStrat, our investment strategy and solutions group
Navigating a volatile reality: three ideas for 2024 and beyond
2023 saw investors grapple with a new, more volatile reality. How should portfolios be positioned for opportunities and challenges in 2024?
What route is right in emerging markets investing?
How can investors find the most compelling opportunities within emerging market equities? Simon Henry and Dáire Dunne explain why they think targeting the economic development opportunity may provide a roadmap for success.
Thematic investing focus: a new era for medical innovation
Advances in science, tools and technologies are transforming the face of healthcare, revolutionising the diagnosis and treatment of complex diseases. How can thematic investors identify promising opportunities?
How a thematic approach can help harness change within portfolios
Multi-Asset Strategist Supriya Menon and Investment Director Andrew Sharp-Paul discuss why a thematic approach can help harness change within portfolios against a structurally different macroeconomic backdrop.
Thematic investing focus: Cloud-backed AI and enterprise intelligence
Cloud-based computing and artificial intelligence are transforming the way enterprises operate, creating what we believe will be a secular tailwind for companies providing software, machine learning tools, and cybersecurity.
The allocator’s perspective: three key decisions on EM equities
How can investors best access opportunities within an improving outlook for emerging market equities? Natasha Brook-Walters, co-head of iStrat, shares three key decision points for allocators.
Thematic investing focus: The education imperative
Education is poised for transformation — and set to see a decade of spending and growth we believe will be unmatched by any since the post-World War II boom.
Why investing in themes for EM equities may reap rewards
Portfolio Manager Dáire Dunne outlines why he is increasingly optimistic about the potential opportunities within select EM equity themes this year.
Adding thematic equity investments to a multi-asset portfolio: An allocator’s handbook
Thematic investing may add a powerful return engine to portfolios, but allocators sometimes struggle with implementation decisions. Members of our Investment Strategy Team offer a framework for thinking about allocation size, strategy selection, and performance evaluation.
URL References
Related Insights
FAQs: Next generation thematic investing
Wellington’s Next Generation Thematic Team focuses on the global economic development opportunity to build thematic solutions, drawing on the team’s research capabilities and insights from experts across our firm’s equity platform. The team creates thematic exposure by identifying long-term structural themes that are creating economic development opportunities, finding potential winners within each structural theme, and creating portfolios with attractive risk/return potential.
The team believes it’s important that no single theme dominates risk in the portfolio and that thematic exposures are balanced. Nearer-term risks, such as those related to market cycles, should be managed through disciplined risk management.
Building thematic solutions is a three-step process. First, we identify long-term structural themes leading to economic development, resulting in investable universes. Security selection is the next step; here, we conduct fundamental, bottom-up security research to deliver targeted exposure to companies we believe will be thematic winners. Finally, we construct a portfolio, using a contribution-to-risk framework and proprietary theme-ranking models to balance risk exposure with medium-term conviction across themes.
Traditional investing often relies on benchmarks, which are inherently backward looking. Companies that have succeeded in the past are not necessarily likely to succeed in the future. Focusing on themes, rather than sectors or benchmarks, maximises exposure to the future.
While we don’t anticipate a change in our three overarching structural themes — innovation, sustainability, and inclusion — each of these encompass a range of thematic opportunities. For example, within inclusion, the team explores opportunities within health care and education and learning. These underlying themes can and do change as the opportunity set evolves.
Contact the team
Please fill out the form with any questions for the team.
Your request has been submitted.
