Theme chaser fund debuts

A new fund launched by AXA Global Investors will target wider global themes with its investment strategy as it looks to leverage gains from potential high-growth sectors that are attracting investor attention.

Thursday, September 24th 2009, 6:25AM 2 Comments

by Paul McBeth

The aptly-named Global Themes Fund will invest in third party exchange traded funds to offer its investors exposure to high-yield opportunities with a medium-term focus through market and sector indices, according to head of investment strategy Keith Poore.

"We're looking to exploit themes out there with the potential to maximise returns over the next five to 10 years," Poore said. "It's not theme of the day, more it's the theme of the year."

The fund has earmarked emerging markets, clean energy, commodities, water resources and information technology as the current themes it will invest in, and will use the MSCI World Index as its investment benchmark, which it expects to out-perform by an average 4% annually.

Poore said the strategy team is constantly reviewing what the next thematic opportunity will be, and the fund will look to maximise its returns when a sector is on the up and exit it before it hits the top of the bubble.

"Liquidity is very important" as the fund wants to avoid getting stuck in non-performing assets, he said.

With the prospect of global warming likely to stay for a while and water resources beckoning as the next big issue for conservationists, Poore is confident they will be able to keep ahead of the curve.

He conceded that the exposure to the IT sector harked back to the 1990s tech boom, but said the outlook for the technology industries was blossoming as "more and more governments recognise they've got to raise their investment in that area."

The fund is currently investing in the Vanguard MSCI Emerging Markets, iShares FTSE/Xinhua China 25 Index, Powershares DB Commodity Index, Powershares Water Resources, Powershares WilderHill Clean Energy and iShares Dow Jones U.S. Technology Sector Index Fund.

Paul is a staff writer for Good Returns based in Wellington.

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Comments from our readers

On 25 September 2009 at 6:50 am Michael Donovan said:

THEMES or TRENDS to myself it is two words for a similar thing.

I have personally raved on for many years about this (TRENDS or THEMES)being one of the biggest factors on investment choices (or investment withdrawals).

Managed funds have taken a beating and lost a lot of favour in recent times, so I for one welcome this fund as what appears to be a fresh, 'new-age' perspective to managed offerings, although I would naturally reserve any final decisions until a micro-look is completed.

The mention of Global Warming is one initial point which I do personally question as being a positive factor in business investment choices for this fund.
However, whether Global warming is real or not, I guess there are enough individuals and groups behind the 'campaign' to make it stick for a while anyway, so there lie a multitude of investment 'opportunities?'

Let's see if the 'industry' picks up on the THEME (TREND) factor to help everyone climb out of the hole?

On 25 September 2009 at 11:02 am colson said:

Thematic funds are investment fabs that seem to be appear on the scene every now and then. Much research shows that most fund managers don't add value via asset allocation, now we must think that (as a group)they can pick trends! I hope this fund succeeds but history is against it and investors be advised: stick to the basics. However if you want to tinker with funds like these do so in moderation.