Portfolio Risk Management — March 23, 2022

Thematic investing in the current climate – A more focused approach to sustainable and future-proof investing

The Russian invasion of Ukraine spooked equity investors around the world, but losses were not distributed equally across all sectors, with some industries even exhibiting positive returns. This opens up opportunities for more focused strategies such as thematic investing.

In particular, the surge in oil and gas prices has not only created additional upward pressure on production costs and consumer prices, but also increased the urgency of a transition to sustainable energy sources. This means that investment vehicles that offer natural protection against inflation and/or focus on sustainability are likely to benefit. The increased threat of cyberattacks should also raise demand for security software and services.

Author

Christoph Schon, CFA, CIPM

Senior Principal, Applied Research