BNP Paribas Asset Management (‘BNPP AM’) reveals the key findings of its latest survey.
Sustainability and ESG are the primary factors for thematic investing, according to a new survey released by BNP Paribas Asset Management.
The report, conducted by Greenwich Associates, analysed institutional and wholesale investors’ attitudes to thematic investing. It surveyed 153 European and Asian intermediary distributors and institutional investors
Its revealed that 76 percent of investors were motivated by sustainable themes.
Additional factors that encouraged investors to consider thematic strategies were the ability to enhance investment returns (42 percent), to include a more innovative or disruptive investment approach (36 percent), and to increase diversification (30 percent).
The survey highlighted an increased investor appetite for thematic products. Approximately 88 percent of wholesale and 36 percent of institutional investors already use or plan to use thematic strategies. Meanwhile, 90 percent of investors believe that thematic investing has a positive impact on long term performance
The leading preference for sustainability focused investors interested in thematic strategies was for funds to focus on the UN Sustainable Development Goals (41 percent).
This was followed by an interest in climate change solutions (21 percent) and opportunities in renewable energy (18 percent).
Additional themes that interested investors in the survey related to innovation and technology. Respondents identified the most attractive as being health (28 percent), robotics and artificial intelligence (23 percent) and disruptive technologies (13 percent). More than 50 percent identified these themes as being among the three they considered the most appealing. These were followed by disruption themes such as cyber security, biotech, 5G and smart cities.
While thematic investing has typically been more focused on equities, the results suggests there is growing traction within fixed income.
The study showed that the 42 percent of investors are using or considering fixed income for thematic investing. This contrasts with 87 percent for equities, but it is ahead of multi-asset and private markets (both 30 percent).
Pierre Moulin, member of the executive committee and global head of product and strategic marketing at BNPP AM said: “The growth of thematic investing has been remarkable, expanding threefold between 2017 and 2020, with notable support from distributors and retail investors. We expect this trend to accelerate, driven by upcoming regulatory change, including the integration of ESG preferences in investor choices under MifFID II, as well as growing demand from institutional investors for thematic strategies."
