Reasons why institutional investors should invest in active thematic equities.
Readers of the financial press could be forgiven for thinking that active investing isn’t worth the time and effort. We are told that, as stock prices now accurately capture all available information, investors should abandon their pursuit of alpha altogether.
It’s a persuasive argument, but it would be wrong to claim that long-only active equity investment has outlived its usefulness.
In fact, research shows that a fair proportion of active equity strategies do distinguish themselves over time [1]. When investment managers stay true to their very strongest convictions and avoid holding stocks simply to alter a portfolio’s tracking error, such strategies can deliver.
All of which helps explain why a growing number of institutional investors are considering allocating more of their capital to active thematic equity, an approach that is both research intensive and index-agnostic [2].
Steve Freedman, Sustainability and Research Manager, Thematic Equities at Pictet Asset Management
The importance of megatrends
The main goal of Pictet Asset Management’s thematic equity strategies to invest in companies that profit from structural forces of change the evolve independently of the economic cycle.
In other words, our thematic portfolios aim to transform long-term megatrends – such as urbanisation, globalisation or the green transition – into long term investment opportunities.
To discover more, download our report Thematic equity: the active element of a global stock portfolio.
Source notes
[2] https://docfinder.bnpparibas-am.com/api/files/de3e08aa-b212-42f8-99c3-3134ceaf6aaf
Steve Freedman, Sustainability and Research Manager, Thematic Equities at Pictet Asset Management
Disclaimer
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