Interactive Investor

Professional investors are betting on these big themes

20th November 2020 12:25

Tom Bailey from interactive investor


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A poll reveals the big themes investors are betting on. Tom Bailey names the ETFs to access them with. 

Professional investors in Europe are betting on artificial intelligence (AI) as a long-term growth opportunity, according to a survey commissioned by exchange-traded fund (ETF)-provider WisdomTree.

The survey polled more than 400 investment professionals from across the continent, asking which “themes” they think offer long-term investment opportunities. Themes are large macro-level trends that investors can try to identify and invest in, either through individual stock selection or, increasingly, through dedicated funds and ETFs. 

The results revealed that 71% of professional investors believe AI currently presents the most compelling long-term investment opportunity from a thematic perspective. AI-focused ETFs have proved popular among investors in recent years. There are several AI thematic ETFs investors can use, including Lyxor Robotics & AI ETF (LSE:ROAI), WisdomTree Artificial Intlgc ETF USD Acc GBP (LSE:INTL) and L&G Artificial Intelligence ETF GBP (LSE:AIAG).

In second and third place were themes set to benefit from working from home. A total of 60% of investors surveyed said they viewed biotech as a potentially successful long-term theme. Two simple ways to access this theme include Invesco NASDAQ Biotech ETF (LSE:SBIO) and iShares Nasdaq US Biotech ETF USD Acc GBP.

In third place was cyber security, with 47% seeing it as a long-term investment theme. There is a sense that with the changes towards increased working from home, companies will need to spend more on cyber security, with employees seen as more vulnerable to cyber attacks outside the office.

Cyber security ETFs have also been a popular thematic ETF. This year, thematic fund specialist Rize launched Rize Cybersecurity Data Privacy ETF GBP (LSE:CYBP). Over the past six months, it has returned more than 11%. Another cyber security option is the L&G Cyber Security ETF GBP (LSE:ISPY).

Ravi Azad, head of UK and Nordics at WisdomTree, said: “Our research points to the growing popularity of thematic investing, which has benefited from strong returns during the coronavirus pandemic.

“Once seen as a fad, thematics are becoming important building blocks in portfolio construction due to their long-term growth potential”.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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