Investing in the major socioeconomic, environmental, and technological themes of our times is becoming more accessible than ever, but how do investors sift through the fads to find the megatrends?
Kanish Chugh, Head of Distribution, spoke to James Whelan, Investment Manager for VFS Group (learn more about James here) on his views of the major trends in 2021 and how to identify them for your portfolio.
Thematic investing and megatrends
Investing in megatrends is a type of thematic investing. It involves considering long-term macro trends, such as robotics and automation, and using various screens and information sources to identify the companies or assets which support this trend through infrastructure or services.
Thematic investing is sometimes confused with sector investing. While it’s easy to see how this can happen, thematic investing is more tailored and can span several sectors or even asset classes. To illustrate this, consider the growth trend for technology. While one way to incorporate this might be simply including a sector investment to information technology, a thematic investment might also consider companies outside of this sector classification that also stand to benefit by providing services associated with technology, such as Amazon or Netflix.