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Adviser Fund Index – I have a theme

Themed funds have become increasingly popular in the last few years as investors attempt to find the next big story. Thematic investing is not a new concept but specific funds are more visible now than in the past.

JP Morgan Asset Management launched its global consumer trends fund last week. Its aim is to benefit from changing consumer patterns around the world. It says this is a long-term theme. The fund invests in companies that are likely to benefit from shifts in how people live and what they spend their money on.

Thematic funds can invest in single themes or a range of themes. Invesco global dynamic theme, Sarasin Equisar global thematic and Credit Suisse UK thematic are all multiple-theme portfolios. Examples of single investment themes include energy, agriculture, healthcare and technology.

One of the most popular single themes over the last year is agriculture, with investors placing a lot of money in this area. Other themes that have generated a lot of interest and attracted a lot of cash include infrastructure, commodities and energy.

Daniel Good, portfolio manager at Barclays Wealth, holds the JPM natural resources fund in his client portfolios. He says: “Commodities generally have never been an asset class for investors but now everyone wants them in their portfolio. We have not gone into anything like luxury goods funds. I think they are a bit faddy.”

Whitechurch Securities head of research Ben Willis says Sarasin is the pioneer of themed funds. He says: “The thematic approach has been around for a while. As long as you are identifying the right themes, you are going to be quite successful.”

The Sarasin equisar global thematic fund, managed by Guy Monson and Harry Talbot Rice, launched in 1994. Its assets are allocated by global themes which track long-term worldwide growth trends. Its five themes at the end of March are corporate restructuring, intellectual property and excellence, pricing power, global convergence and security of supply.

Over one year to April 14, the fund returned 6.78 per cent, according to Morningstar. Over three years, it returned 48.68 per cent compared with the average return of 34.66 per cent in the Investment Management Association’s global growth sector.

At the end of March, over 40 per cent of the Sarasin equisar global thematic fund was invested in North America, 20.5 per cent in Europe and 16.1 per cent in Britain.

Sam Sibley, investment manager at Beckett Financial Services, says investors must be aware that certain themes can be short term.

She says: “Thematic funds tend to be the latest fad. If you are the last one to leave the party, it is not very fun at all.”

However, Sibley is considering the 7m Allianz RCM global eco trends fund, which launched two months ago and is managed by Bozena Jankowska. She says the fund will sit at the higher end of the risk spectrum if she does select it for client portfolios.


Boutique battle

Schroders managing director of UK retail Robin Stoakley says that circumstances are now favouring the big fund firms and that the boutiques are going to find themselves in a fight.

Johnson Fleming is a finalist at UK Pensions Awards 2016

The UK Pensions Awards shine the light on excellence and recognise the advisers, providers and investment managers that offer the highest level of innovation, performance and service to occupational pension schemes and their members. This year’s awards looked at advisers and providers across 31 different categories and were rigorously judged by a panel of senior […]


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