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For financial professionals in Sweden

The importance of thematic investing for your portfolio

In the first of our five-part video series, Matthew Bullock, EMEA Head of Portfolio Construction and Strategy, explains how thematic investing could play an increasingly important role in constructing a portfolio and generating outperformance.

Matthew Bullock

Matthew Bullock

EMEA Head of Portfolio Construction and Strategy


Sabrina Denis

Sabrina Denis

Senior Portfolio Strategist


Mario Aguilar De Irmay, CFA

Mario Aguilar De Irmay, CFA

Senior Portfolio Strategist


9 Jan 2024
3 minute watch

Key takeaways:

  • It is anticipated that the next ten years of equity market returns will likely be more challenging than was the case in the previous decade.
  • We believe that identifying the themes that are changing how society operates – within healthcare, technology, property and sustainable investing – can enable us to find the companies who will be future leaders.
  • From a portfolio construction perspective, thematic strategies could offer greater alpha potential and diversification benefits.

Alpha is the difference between a portfolio’s return and its benchmark index, after adjusting for the level of risk taken. The measure is used to help determine whether an actively managed portfolio has added value relative to a benchmark index, taking into account the risk taken. Alpha potential is the potential for a manager to add value.

Concentration of a portfolio can happen when there are a low number of invested assets, or when they are similar in nature.

Diversification is a way of spreading risk by mixing different types of assets/asset classes in a portfolio, on the assumption that these assets will behave differently in any given scenario. Assets with low correlation should provide the most diversification.

Liquidity is a measure of how easily an asset can be bought or sold in the market. Assets that can be easily traded in the market in high volumes (without causing a major price move) are referred to as ‘liquid’ and are considered to have low liquidity risk. Assets which are not easily traded have high liquidity risk.

 

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.

 

Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

 

The information in this article does not qualify as an investment recommendation.

 

Marketing Communication.

 

Glossary

 

 

 

Matthew Bullock

Matthew Bullock

EMEA Head of Portfolio Construction and Strategy


Sabrina Denis

Sabrina Denis

Senior Portfolio Strategist


Mario Aguilar De Irmay, CFA

Mario Aguilar De Irmay, CFA

Senior Portfolio Strategist


9 Jan 2024
3 minute watch

Key takeaways:

  • It is anticipated that the next ten years of equity market returns will likely be more challenging than was the case in the previous decade.
  • We believe that identifying the themes that are changing how society operates – within healthcare, technology, property and sustainable investing – can enable us to find the companies who will be future leaders.
  • From a portfolio construction perspective, thematic strategies could offer greater alpha potential and diversification benefits.