A new survey released by BNP Paribas Asset Management (BNPP AM) found that interest in thematic investing strategies among institutional and wholesale investors has grown dramatically in recent years, with the emergence of sustainability and ESG investing as a key driver of the trend.
Pierre Moulin, Member of the Executive Committee and Global Head of Product & Strategic Marketing at BNPP AM, said:
“The growth of thematic investing has been remarkable, expanding threefold between 2017 and 2020, with notable support from distributors and retail investors.”
The study, conducted by Greenwich Associates, surveyed investors across Europe and Asia
According to BNPP AM. Nearly 90% of wholesale investors, and 36% of institutional investors reported that they either use or plan to implement thematic investment strategies, indicating a fundamental shift in approach away from a focus on asset class, geography and business sector, according to BNPP AM.
Increased interest in ESG and sustainability was the most commonly cited objective for using thematic investment strategies, identified by 76% of respondents, significantly ahead of the #2 objective of enhancing investment returns, at 42%.
Within the sustainability category, specific thematic investing preferences included an overall focus on the UN Sustainable Development Goals at 41%, climate change solutions (21%) and renewable energy (18%).
According to BNPP AM, the acceleration in thematic ESG investing reflects a broader trend in the asset management industry, and the supportive regulatory and public policy backdrop.
“We expect this trend to accelerate, driven by upcoming regulatory change, including the integration of ESG preferences in investor choices under MifFID II, as well as growing demand from institutional investors for thematic strategies.”