Which themes have we chosen?
We use nine core themes: net effects, smart revolution, Earth matters, financialisation, state intervention, China influence, consumer power, population dynamics and healthy demand. We see these themes, which include the disruption from technological change, the increasing power of consumers, the impact of climate change, and the influence of China, as indicative of long-term, structural trends that are likely to persist for some time.
Why do themes matter?
In seeking to decipher opportunities from risks, investors have a very large universe to look at, and it is unrealistic for an investment manager to analyse the whole of it (and the almost infinite influences upon it). It is easy to get distracted by short-term noise, worrying about what the market will do week to week, or even day to day.
Instead, we want to consider the trends that will shape the world of investment, and avoid being distracted by market noise. Our themes are therefore intended to provide perspective and allow our global research analysts and portfolio managers to focus their time on the areas of greatest importance. They:
• represent the first stages of idea generation and risk management
• identify drivers of long-term, structural change
• provide a dynamic framework for investment thinking
• afford a longer-term global perspective on a volatile world
How do we use themes?
Themes are used throughout our investment process, facilitating both our top-down and bottom-up idea-generation process. From initial, high-level research prioritisation to portfolio construction, themes play an essential part in helping to shape our investment outlook and positioning. Employing themes in our investment process not only alerts us to potential opportunities, but also serves to highlight possible risks.
Our nine core themes
To find out more about each theme in detail, and the ideas within these core themes that we are currently focusing on, please click on the icons below.
Thematic investing: what it is and how we do it
Our new paper reveals the most common questions our clients ask us about thematic investing…..and the answers.
- What is a theme?
- Why do themes exist, and how do we know they exist?
- Do themes affect company returns?
- What are the key characteristics of themes?
- How does Newton use themes?
Your capital may be at risk. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount invested.
These opinions should not be construed as investment or other advice and are subject to change. This material is for information purposes only. Any reference to a specific security, country or sector should not be construed as a recommendation to buy or sell investments in those countries or sectors. Please note that holdings and positioning are subject to change without notice.