Challenges Faced by The Thematic Investment

Total Return Indices has been the major concern of the investors for quite a long time by now. People depend in the Custom Index to reap as much profits as they can. Besides, the role of Index Provider in investing in desired opportunities cannot be neglected. However, here we are with basic advice on thematic investment. One of the most attractive qualities that any sort of investment can possess is providing a unique as well as an alternative source of return to the investor. In this case the thematic fund offers not only the opportunity of the additional source of alpha, however at the same time it also offers the benefits of diversification, which is further known to ameliorate the risk-adjusted return of the portfolio. Here are the Challenges Faced by The Thematic Investment.

Risks associated with thematic investment
This is not to say that the thematic investing has no risks associated with it because this is not true. Considering the nature of thematic investment, thematic funds are so designed that these can take the advantage of the long-term investment themes, which indicates that these are most probable to take very long-time so as to give the desired results which again is not at all a surety. In other words this is an indication that the thematic funds on which we have a blind faith have the capability to underperform a global equity benchmark taking into consideration the extended period of time. This can really prove to be a great challenge for those who have a desire to investment in short time.

Major challenge faced by thematic investment
Here it becomes important to highlight the actual challenge that thematic investment faces. It is actually the challenge to successfully identify the key trends of the future. In addition to this, it is also hard to determine if these will actually turn out to be a profitable investment opportunity or not. There are a lot of examples that can be quoted from the history to show where the thematic investment had suffered a great setback.
Source : https://sites.google.com/site/indxxdevelopment/challenges-faced-by-the-thematic-investment

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