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Thematic investing – Innovation, disruption and sustainability

In this article:

    In this Thematic Investing video, our experts discuss the potential of companies enabling or adopting innovative technologies and business models to generate superior growth and returns over the longer term. A key consideration is the careful analysis of the environmental, social and governance (ESG) aspects of innovation and disruption.  

    Berenice Lasfargues, Sustainability Integration Lead, highlights the need to understand a range of factors including how a theme’s sustainability risks and opportunities relate to each other. “Integrating ESG factors into investment processes should have a measurable positive impact,” she notes.

    Senior Portfolio Manager Pamela Hegarty covers the breadth of investing in disruptive tech, noting this transcends sectors and includes ‘enabling technologies’ such as semiconductors and networks. She showcases the many uses of artificial technology, going beyond software and applications and as far as robotisation (and even self-driving cars).

    Senior Portfolio Manager Jon Stephenson argues healthcare is ‘a growth sector marked by an abundance of innovation’ – aging populations, lifestyle changes, technological progress and advances in emerging markets are driving both demand for care and innovation in areas from drug discovery and delivery to miniaturised devices and robot-assisted surgery.


    Please note that articles may contain technical language. For this reason, they may not be suitable for readers without professional investment experience. Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns. Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions). Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.
    Environmental, social and governance (ESG) investment risk: The lack of common or harmonised definitions and labels integrating ESG and sustainability criteria at EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name but have different underlying meanings. In evaluating a security based on the ESG and sustainability criteria, the Investment Manager may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, (the Sub-Fund's) performance may at times be better or worse than the performance of relatable funds that do not apply such standards.

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