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CIO Academy: How to allocate to investment themes

Thought Leadership
This insight is about
Thematic investing
Equities
Bull Market
CIO Academy
HiCo Themes

CIO Academy: How to allocate to investment themes

by Willem Sels, Global Chief Investment Officer, HSBC Private Bank and Wealth and Stanko Milojević, CFA Head of Asset Allocation, HSBC Private Bank and Wealth
Sep 20, 2024

  • The overall history of the stock market is a history of growth, prosperity and compounding returns generated during the bull market phases. Each of these historical bull markets were driven by technological and scientific breakthroughs, social/political movements, or other mega-trends and regime shifts, all of which are often referred to as “market themes”
  • Naturally, investors wish to ensure their portfolios are appropriately positioned to benefit from similar developments in the future. In this paper, we discuss the opportunities and potential pitfalls of thematic investing and outline a framework for incorporating themes into investment strategy
  • Following the market-capitalisation driven allocations is a time-tested formula that can be easily implemented by most investors. Additional exposures can be added to the portfolio which requires a deeper involvement in research, theme selection, and risk management. Private markets can be an additional source of accessing emerging themes in their early stages, particularly via Venture Capital funds for investors with the appropriate risk tolerance, knowledge and experience

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