There are dozens of strategies that you can use to enrich your investment portfolio. New investment trends often appear each year, getting everyone in the space excited about the opportunities that come with them. Recently the term “thematic investing” has started gaining traction and is getting promoted by many investors that are currently using it to seize opportunities presented by the global structural trends.

If you want to learn more about what thematic investing is and why it’s so widely discussed, then keep on reading. 

An Overview of Thematic Investing 

Thematic investing is an investment strategy that focuses on long-term macroeconomic trends as it attempts to capitalize on significant changes that are expected to happen in society. The whole idea behind it is that once a particular technological or societal shift occurs, the performance of the stocks of related companies will improve dramatically. 

In recent years, major themes for investors include the rise of cryptocurrencies, electric vehicles, and technological advancement in artificial intelligence. 

The “thematic” investment strategy differs from conventional portfolio construction tactics because it doesn’t focus on certain parts of the economy like healthcare or technology but instead cuts across sectors and seeks specific opportunities connected to a particular theme. 

Benefits of Thematic Investing

This investment strategy comes with a few benefits that attract people’s attention, especially younger investors who don’t have as much experience in the field. Here are a few of the benefits of this strategy:

  • Thematic investing may lead you to invest in the next big company. When using this investment strategy, you are forced to think ahead and consider what might be the “next big thing,” which can give you incredible ROIsif you invest in the right companies.
  • Provides you an opportunity to generate alpha (excess returns well over the benchmark).
  • It gives you a chance to invest in ideas you believe in; from green energy and sustainable agriculture to AI and NFTs. 

Potential Disadvantages of Thematic Investing

Everything has its good and bad aspects, and when it comes to investment strategies, you should always be aware of the potential risks before deciding to throw your hard-earned money into it. Here are a few things to keep in mind when going the route of thematic investing: 

  • It can be a risky investment strategy because you’re basing your decisions on massive social or technological changes, which may or may not come.
  • Just like any form of investment, beware of putting all your eggs in one basket. It’s still essential to have a reasonably diverse portfolio.


If you’re an early adopter and you believe you have a pretty good crystal ball regarding what will happen in the future, then thematic investing can help you build your portfolio. Even if you aren’t a good guesser, following macro trends and keeping an eye on what notorious thematic investors are doing with their money can help you make beneficial investment decisions. 

However, much like all other investment strategies, thematic investing comes with its good and bad aspects. Care should be taken before every investment decision, even if something seems like it’s sure to be the next big thing.