Thematic Investment
Our thematic approach to investment creates a flexible architecture, providing a platform for the application of investment expertise across a variety of asset classes.
There are two core elements to our thematic process:
Our asset allocation themes are determined by the core economic assumptions concluded from our quarterly Economic and Thematic Forums. Asset allocation themes include views on cash, currencies, bonds, equities and alternative assets which include property, commodities, structured products, private equity investments and precious metals. We also take account of geographic asset allocation and style bias.
At sector and stock levels we are constantly searching for specific drivers and enablers where change or opportunity is present, and we then seek to identify specific sectors and companies that should benefit from the change.
An example of the methodology used to identify themes and specific stocks is Porter’s Five Forces, which places emphasis on rivalry, barriers to entry, supplier power, threat of substitutes, and buyer power.
Our quarterly forums enable us to formally monitor and update our Macro “Themeometer” and our Micro Thematic Matrix.
Our “Themeometer” is constructed at the asset class level. We position different assets on a temperature scale, based on our house view of various themes and trends. This ensures focus on the relevant issues and acts as an indicator of the moods and direction of markets.
Individual securities, sectors and stocks are scrutinised rigorously using fundamental analysis. Our Micro Thematic Matrix is the result.
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