Comparison Between Thematic Investing and Smart Beta

The index company provides you knowledge about all the major investment platforms. One of the most conspicuous trends in today’s era of investment is increase in the popularity of thematic investing. Thematic investing makes use of the top down approach in addition to seeking to make long-term identification of the secular trends which have the probability to shape the world where we are living so as to be the major driving force behind the financial market that is yet to make a mark in times to come. Here we are with the highlights on Comparison between Thematic investing and Smart Beta.

Comparison between Thematic Investing and Smart Beta
Thematic strategies are known to share certain similarities with the smart beta strategies. To highlight one, both of these are known to materially alter the return profile of the traditional market cap weighted index. It is this that is highly and frequently criticised for being exposed in excess to the largest companies so as to back up the ones that won earlier. The smart beta funds on the one hand try to alter the return profile of the market cap index by simply tilting the index to the particular investment style which comes inclusive of the value or growth, on the other hand the thematic funds seek to alter the return profile of the index by simply tilting the exposure to the particular theme or the concept.

All in all, this is the Comparison Between Thematic Investing and Smart Beta that you need to know. Thematic strategies are so designed that these help to make an investment in the assets where the returns are in one way or the other influenced highly by the structural forces of the change as well as on the success of the theme which is considered usually to be independent of the cycle of the economy. There are a variety of sources from where the themes can originate. However, the fact remains that these are usually and in ideal situations centred on the social or political besides the demographic or the technological change.
Source : https://indexdevelopmen.livejournal.com/874.html

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