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Thematic Investing: Thematically Wrong?

Performance Chasing with a Narrative

Nicolas Rabener
10 min read
23 Mar 2020

SUMMARY

  • Thematic investing can be viewed as performance chasing with a narrative
  • A systematic approach to thematic investing would have underperformed the stock market
  • Thematic hedge fund managers have not generated attractive returns

PERFORMANCE CHASING WITH A NARRATIVE?

Thematic investing is like venture capital for asset managers. For every 10 products launched, most fail to generate interest from investors, a couple break even from a cost perspective, and maybe one becomes the star fund that raises billions of assets under management and makes it all worthwhile.

For example, the first cybersecurity-focused exchange-traded fund (ETF) – HACK – paid off for its manager when governments and corporations around the globe were attacked by hackers in June 2017.

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