“Big picture” trends have the potential to make one a fortune over the next few decades.

The pandemic and tragic war in Ukraine have shown how quickly the global economy and financial markets can be upended.

Certain global trends, however, are likely to persist, such as population growth, the resulting need for more food and healthcare, and governments and businesses increasing investment to avert a climate disaster.

These thematic investments focus on big picture trends and the industries and companies that stand to benefit, but managers should also conduct extensive ‘bottom up’ analysis of the individual firms they target.

Simpler forms of thematic funds have been around for a while.

‘What exactly is an income fund if it is not a thematic fund?’ Later, they evolved into methods of gaining exposure to market niches,’ he explains.

‘They have recently become extremely popular, particularly in the world of exchange traded funds, where they can combine elements of passive and active management, as well as cost-effective charges.’

It’s gotten to the point where you can say, ‘I’ve got a fund for that!’ when someone mentions a theme.

The risk with all of these themes is that they can become a little faddy, and by the time a thematic fund is launched, especially in niche areas, the hot money has already flooded in. Having said that, some themes do last.’

We’ll look at that later.