What Is Thematic Investing?

How Investment Themes Are Identified

As we mentioned earlier, investment themes are identified by looking at the intersection of shifting economics, demographics, psychographics, technologies, mixed with regulatory mandates and other forces. This approach allows us to look at the real world in which companies are operating in, rather than inside a single silo or industry category, even though that industry might be on the verge of, at best, radical transformation, or worse, complete annihilation.
  • Where are we in the economic cycle?
  • What is the vector of the economy?
  • Expansion, contraction or stagnation?
  • Input prices, commodities, inflation, deflation
  • Population dynamics
  • Jobs and incomes
  • Geographic Movements
PSYCHOGRAPHICS: Consumer & Enterprise
  • Is the consumer conserving or splurging?
  • Are companies spending and hiring or cutting and slashing?
  • Government Policy, Spending and Debt
  • Regulatory – emissions, environment, Medicare, Net-Neutrality
Cyclical vs. Structural Shifts
  • ⎫ Mobile, the Cloud, Social Media, etc.
  • PCs to smartphones and tablets
  • Broadband’s implications/opportunities
Industry evolution & disruptive technologies
  • Touch, voice, artificial intelligence, new materials, new processes, etc
U.S. and non-U.S.
  • Global Repurcussions

If you’re thinking there is a lot to look at, let’s just say we’re not apt to be lying by the pool eating bon-bons. Well, at least not without a laptop or tablet reader pouring through financial filings, company as well as industry reports and all sorts of articles looking to piece together the puzzle of a current or emerging theme.