The menu of thematic funds has mushroomed in recent years. These funds attempt to harness secular growth themes ranging from artificial intelligence to cannabis. The result has been a steady supply of greater complexity from asset managers and increased demand for greater clarity among investors. In our recently issued report on the global thematic funds landscape, we introduced a novel taxonomy for classifying these funds. Here, with help from this framework, we will look at the global landscape in part 1 of this article. We’ll finish in part 2 by sharing best practices for choosing from this expansive universe.

Defining the Universe of Thematic Funds

We have defined the universe of thematic funds as those that select holdings based on their exposure to one or more investment themes. These themes may pertain to macroeconomic or structural trends that transcend the traditional business cycle. Examples include demographic shifts or technological advances.