Clearly, when it comes to constructing a robust multi-manager portfolio, looking at long-term investment themes is obviously an important strategy.
Right now, for example, the environment is a significant theme, with threats of deforestation, loss of biodiversity, soil erosion, poisoned groundwater, mountains of garbage and polluted air, to name a few.
As a result of this situation, there are long-term opportunities, via investments looking to tackle these problems. We access the environment theme through the specialist fund Impax Environmental Markets. This strategy invests in the three sub-themes of clean water, clean energy and clean waste disposal/recycling.
Another key theme is the growth of domestic economies in many emerging market countries. The emergence of consuming “middle classes” in countries that were principally sources of cheap manufacturing and commodity supply is a theme that should run for many years to come.
Apart from global emerging markets funds, we express this view through the specialist Imara African opportunities fund, which accesses the less common African economies that exhibit attractive domestic growth traits.
Healthcare is another means of accessing the global demographic changes of generally ageing populations in developed economies and younger, growing populations in developing economies. Ageing populations require more healthcare products and services. As emerging economies develop and a middle class grows, they too want better access to healthcare.
Infrastructure is an attractive theme too as, once built, the underlying assets can provide relatively predictable cash flows for long periods.
In emerging markets, there is increasing demand for roads, airports, harbours, electricity and water provision. In developed markets, much of the existing infrastructure is poorly maintained and needs to be privatised and refurbished.
In summary, a multi-asset approach to investing, complimented by highconviction, long-term secular themes, could potentially deliver attractive riskadjusted investment returns.
Nick Pothier is manager of the HSBC open global return and open global distribution funds