Thematic Investing: Invest now in tomorrow’s biggest trends

Thematic investing is an investment approach aimed at identifying upcoming trends, and investing in assets that are related or can benefit from said trends. With eToro’s Smart Portfolios, thematic investing is made easy.

Throughout history, humankind has gone through several revolutions. We’ve all learned in school about the industrial revolution, some of us have lived through the internet revolution, and these days we are experiencing the rise of virtual reality worlds, social platforms, and the use of cloud technology. The world is ever-changing, and though we don’t know what the future holds, we can expect major changes in our lives in the coming years. Will they be related to renewable energy? Or perhaps driverless vehicles? We’ll have to wait and see, but in the meantime, we can choose to invest in the next big trend.

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What is thematic investing?

Thematic investing is about finding the potential for structural change in society. This approach to investing allows investors to focus on long-term trends, rather than specific components or companies. Thematic investing splits the trend into smaller factors that have an impact on it.

For example, thematically investing in renewable energy might include globally leading firms that manufacture parts for solar panels or wind turbines, as well as companies that supply the most up-to-date technologies behind sustainable energy production systems.

Thematic investing breaks regional boundaries, as well as old fashioned sectorial definitions. eToro allows you to combine a cross-asset approach with stocks, crypto, indices, commodities and more.

The demand for thematic investing is rising year after year and the industry leaders such as Blackrock (iShares), Vanguard and others are all heavily focused on thematic research and investment products. According to FactSet and Goldman Sachs Global Investment Research1, funds invested in thematic ETFs now exceed those in any other industry-defined sector. While thematic ETFs account for less than 2% of industry assets, they generate roughly 6% of revenue.

What are Smart Portfolios?

eToro’s Smart Portfolios are well-balanced, fully allocated portfolios that focus on market themes. They’re designed for long-term investors, who are given access to innovative investment themes. Based on analysis and market research, Smart Portfolios let eToro users gain exposure to specific segments or trends, in single, ready-made portfolios.

Each Smart Portfolio uses a different approach, based on the specific characteristics, growth drivers and adoption potential of each theme. Whatever your inclination, eToro has Smart Portfolios in a variety of themes relevant to almost every market trend.

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How are Smart Portfolios created?

Our analysts scour the market for the most significant upcoming trends, investigating which types of companies are involved in them and how they may benefit from each trend, and contribute to the potential and adoption of this theme. Each Smart Portfolio employs a well-diversified strategy to reduce volatility, and Smart Portfolio companies are constantly analyzed and rated in several predetermined unique criterias. The Smart Portfolio team is constantly looking for new assets to increase diversification and maximise the coverage of the theme.

How you can invest

You can easily explore the wide range of portfolios eToro offers on our platform and on our website. From Gold and Big Banks to Drone Tech and Cloud Computing, we make sure you’ll never miss the next big trend.

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Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk

 

Sources:
1. https://www.defianceetfs.com/the-thematic-etf-boom/

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