One of the big winners from the covid-19 pandemic have been the thematic funds, with some of them having great returns over the pandemic period. In this article, we have showcased the Top largest in Europe, as well as the themes that have become more and less popular since 2020 based on Morningstar‘s research.
Europe hosts the largest market for thematic funds by assets. In the region there are 400 thematic funds domiciled, that make 51% of all assets in thematic funds on a global scale, as the information available by the end of the first quarter 2021.
In the last 3 years, the assets in Europe have tripled to reach the value of $304 billion. There have been net inflows amounting to $149 billion over the period that have collaborated with the growth in assets over this period of time.
European Thematic AUM by Broad Theme (USD Billion)
In 2020 there were 87 new entrants which was a record for thematic launches in Europe. There has been historically a positive correlation with the launch of thematic funds and the performance of the broader equity markets. For instance, in the past, the number of launches rose and peaked prior to the dot/com bubble and the global financial crisis before diminishing in the subsequent years.
European Thematic AUM by Theme (USD Billion)
Broad Thematic funds are as per today’s data the most popular grouping by assets in Europe and include in their ranks the largest in the region is the Pictet Global Megatrend Selection fund.
The growing of popularity of the ESG funds in Europe has also overflown into the world of thematic investing. Some funds have been looking to get some profit from the transition from the hydrocarbon-based energy sources, such as alternative energy funds. This type of has risen to become the second most popular in the region.
In late 2020, Biden promised huge government spending plans which made a massive movement of inflows into funds with an Energy Transition Theme. Resource Management funds, a grouping largely populated by water-focused strategies, takes third place, with $29 billion in assets under management. Tech Themes and Robotics get into the 4th and 5th positions with $23 billion in assets under management.
Top 5 Largest Thematic Funds in Europe