Two Key Factors in Thematic Investment

Index development has always played an important role in gaining out of investment made for short and long term perspectives. People have always analysed the importance of index maintenance also. Considering the popularity of dividend index and how people get lured by there we are here with another investment platform, the thematic investment. In particular, we will highlight here the Two Key Factors in Thematic Investment that you must have in mind.

Visibility and persistence
If at all you wish to determine the benefits of an investment in the thematic fund, then it is important for you to consider two key factors. It is these two factors that we are talking about which will help you to assess the strength of thematic investment. These two factors are namely, visibility as well as persistence. They former here might appear to be counterintuitive because as soon as the investors witness the evidence of the theme playing-out, a larger proportion of the enthusiasm that it has in addition to the future returns gets reflected clearly in the prices of the assets. Though there is a lot to comply by this, but it also indicates that the investors are habitual to reacting excessively to the short-term trends and turn a deaf ear to the longer-term trends. Therefore, the trend still possesses an attractive return despite the fact that you did not invest in the earliest stage when it was developing. If we talk about persistence, then it is about establishing if a trend is short-term in nature or if it is a long-term structural force.

All in all, these are the Two Key Factors in Thematic Investment. There are ideally two specific structural themes that are considered to have not only the visibility but also the persistence characteristics. These are the ones having a focus on the demographics as well as the technological changes. If we consider from a demographic perspective then we can figure out that the ageing boomers will remarkably affect the demographic profile of the developed nations, giving a visibility of a trend. However, we have a handful of reports that also supports the persistence.
Source : https://indexdevelopment.tumblr.com/post/177229618700/two-key-factors-in-thematic-investment

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