Thematic investment is expected to surge, as investors seek out opportunities for new technologies, according to research by fund manager Robocap.
Wealth managers, family offices, pension funds and insurance asset managers are all increasing their focus on thematic investing, with half (50%) of them holding 5% or more of their equity strategies in thematic focussed funds.
Thematic investing is a long-term strategy that invests in the growing trends that shape the future, covering themes such as artificial intelligence, energy generation, quantum computing, cyber security or demographic shifts that society is experiencing as generations grow older.
Robocap’s research found that 27% of professional investors have around 5% of their equity holdings in thematic focussed funds, while 18% have between 5% and 10% and 5% have more than this. In three years’ time, 38% expect to have between 5% and 10% in thematic funds and 7% anticipate it will be higher than this.
Robotics and AI was considered as having the single biggest impact on the world of the mega trends affecting society, followed by decoupling or fragmentation of the globalised world, fintech, transition to a low carbon economy and finally, demographic changes.
AI was also identified as offering the most attractive risk/return profile for investors over the next five years, the firm said.
Almost all (99%) of those surveyed said they used a core/satellite investment approach and 64% said that accessing the education and knowledge of thematic fund managers is becoming “increasingly attractive.”
Jonathan Cohen, founder of Robocap, said: “Professional investors have recognised that thematic funds offer access to specialist investment expertise into themes such as robotics and AI where education is important for them and their clients”.
“In the long term, technological progress is what allows economic growth and brings societal improvements. This is why robotics and AI have a place in client portfolios, not only because they are the technology of the future, but because they are established and already contribute to human society today.”
Cohen added: “We have the firm conviction that robotics and physical AI offer the potential for strong returns in the long term.”
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