In pursuit of value creation, our sustainable theme investment professionals focus on companies whose products and services, in their view, stand to make positive long-term contributions to society and the environment, underpinned by structural economic drivers.
Focusing on trendlines, not headlines
For more than 40 years, Wellington investors have engaged in a firmwide research initiative, aimed at identifying the ideas that will shape the future. This culture of thematic thinking is the basis of and inspiration behind our next-generation investment approaches.
Structural themes can change the world. Areas like biotechnology or renewable energy, which were barely investable 30 years ago, are now enormous opportunity sets. Today’s next-generation ideas may be among the most important long-term economic drivers for the next 30 years.
The dynamics that sustain economic progress are typically more enduring than near-term growth drivers, and these structural trends can provide a wide range of investment opportunities.
Our sustainable theme investment professionals believe an active approach to thematic investing is essential for identifying disruptive companies that can improve outcomes through scale, cooperation, and innovation. Our portfolio construction focuses on risk contributions, aiming to smooth risk and return experiences across thematic exposures.
How to invest
Thematic emerging markets equity fund focused on sustainable economic development themes
Art.8 (SFDR)
Capital at risk
Next-generation opportunities
Our Investment Strategy (iStrat) Team builds on Wellington’s Future Themes research initiative, a more than 40-year tradition focused on identifying long-term, structural themes that lead to sustainable economic development. The iStrat Team believes the most exciting development forces for the next few decades, particularly across emerging markets, will center on the megatrends of inclusion, sustainability, and innovation.
Pharmaceutical innovation cuts across sector lines
“I think looking more broadly at the whole health care ecosystem — across subsectors of biopharmaceuticals, medical devices, and health care services — it’s a really great time for dedicated health care analysts to research companies and build portfolios for clients.”
— Rebecca Sykes, CFA, Global Industry Analyst
Meet our sustainable theme investing experts
Daire Dunne
, CFA
Simon Henry
, CFA
Natasha Brook-Walters
Insights
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?
Power hungry: Why the energy transition may depend on storage and flexibility
See why our utilities experts see demand for large-scale batteries and flexible-power generation growing more than consensus.
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.
Thematic investing focus: The future of food
The global food system has reached a tipping point and change is coming, creating investment opportunities aided by demographic, policy, and innovation tailwinds.
Thematic investing focus: The transportation revolution has arrived
New technology and environmental concerns are creating a disruptive force in the transportation sector, leading to supply-chain investments and a host of new addressable markets.
Have we reached the end of a tech era?
Thematic Strategist Trevor Noren explores how active management and a global lens could provide tech investors with essential edges moving forward.
URL References
Related Insights
FAQs: Sustainable theme investing
This form of investing enables investors to gain exposure to both megatrends — structural shifts that are reshaping our economy and way of life, and themes — groups of securities with similar properties that support or benefit from those megatrends. These stocks, which often span traditional sector classifications, may offer investors a differentiated way to diversify their equity allocations. Finally, while sustainable themes are relevant for both developed and emerging markets, we believe the economic development opportunities in emerging markets today have the potential to provide substantial tailwinds for these stocks. The risks to sustainable thematic investing include macro and market volatility, and uneven progress toward economic development goals.
There is a great deal of thematic overlap between impact and sustainable theme investing, as both focus on generating competitive investment returns alongside positive social and economic outcomes. Impact investors, however, have specific investment thresholds of materiality (a certain percentage of an investee’s revenue must be generated from impact activities), additionality (the investee’s impact must have a low probability of being addressed by other means), and measurability (a theory of change must be clear and an investee’s progress toward impact must be quantifiable).
The sustainable thematic investment universe is characterized by disruption and dispersion. Many companies are disrupting sectors, industries, and business models. This creates significant dispersion among potential long-term “winners” and “losers,” which, in turn, results in alpha opportunities for active managers. We believe that fundamental, bottom-up research coupled with deep understanding of the macro and geopolitical environment strengthens the investment case for this approach.
Explore other sustainable and ESG investing opportunities
Seeks to invest in issuers that we believe contribute to a lower-carbon future, can help the world adapt to a changing climate, or are well positioned to manage transition and/or physical risks
Seeks to invest in issuers whose core products, services, or projects provide environmental and/or social solutions in a differentiated way, with the goal of driving measurable positive impact alongside financial returns
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