The upside sounds like an investor’s holy grail: huge returns and support for businesses or industries people often believe in, such as clean energy, artificial intelligence, or deglobalization.
It’s known as thematic investing, and it’s exploded in recent years as investors continue in their everlasting search for new ideas, new trends, and greater performance. But despite all the money pouring into various thematic funds globally—data shows recent increases as high as 300 percent—there’s considerable evidence that most results fall far short of expectations. In fact, many experts warn of thematic funds’ high volatility, failure rates, fees, and more.
“It’s not a particularly good style of investing,” says Nicolas Rabener, founder and CEO of London-based financial research and analysis firm Finominal. “The reason for that is behavioral. Most humans, as it…
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Naples Illustrated (Digital) - 1 Issue, April 2023