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Thematic Investing

Pacome Breton | Scott Gardner | Bola Onifade | Alex Janiaud

Last updated on 3 November 2025


Our Thematic Investing style taps into the trends shaping our future. Our expertly designed portfolios allow you to focus on a specific area while remaining globally diversified and set up to handle risk.

Thematic Investing is a strategy that focuses on trends that are well placed to contribute to – or benefit from – long-term structural changes to our society.

Our Thematic Investing style doesn't focus on one particular region or sector. Thematic portfolios seek to find the companies and sectors that will drive disruption over the long term, investing in a collection of exchange traded funds (ETFs).

Which themes are available?

We’ve created three themes that we believe will come to shape our future in the years to come.

  • The Technological innovation theme invests in technological advances and innovation driving the modern world. This includes the adoption of robotics and automation, demand for cloud computing and cyber security, the growing use of semiconductors, and of course, artificial intelligence.
  • The Resource transformation theme focuses on the ways we use energy and resources to meet our future needs. It includes exposure to the evolving mix of energy sources powering the world, including renewables and non-renewables, the materials required to drive electrification, and growing global demand for clean water.
  • The Evolving consumer theme invests in the evolving demand and needs of our global population. It focuses on the rising importance of digital products and services, ageing populations and evolving healthcare solutions, and the growing wealth of emerging market consumers.

How do our Thematic Investing portfolios work?

We’ve designed our Thematic Investing portfolios with careful consideration for the needs of our investors. If you select one of our themes, your Thematic portfolio will be split into two portions:

Thematic

This portion of your portfolio will be invested in ETFs that focus on your chosen theme. The size of this portion will be determined by your risk level. The higher your risk level, the greater your thematic exposure. For example, if your risk level is 5, the thematic portion is 10% of your overall portfolio, and if your risk level is 10, your exposure to Thematic funds is 20% of your overall portfolio.

The Thematic portion of your portfolio will be reviewed by our investment team annually and will be rebalanced at regular intervals. Due to the long-term nature of the trends that these portfolios invest in, this portion requires less frequent intervention.

Actively managed

The remaining portion of your portfolio will be made up of actively managed funds that invest in a globally diversified range of ETFs. This portion (between 80-90%, depending on your risk level) is not specific to your chosen theme and will be actively managed by our experienced investment team, which regularly rebalances your portfolio and makes tactical adjustments based on macro-economic data, market activity, news and analysis.

This approach allows us to ensure that your portfolio is risk-adjusted and globally diversified while allowing you to choose the trend you think has the most potential.

How we select Thematic ETFs

The global ETF thematic universe is vast. To select the ETFs which form our thematic portfolios, we look at three key criteria:

  • Theme purity – how the underlying index classifies its constituents and more specifically the rules behind its construction, to ensure it aligns closely with the theme.
  • Assets under management – larger funds mean less risk of ownership concentration for our clients. Ownership concentration risk amplifies when an investor becomes a sizeable holder of a fund, such as owning at least half of the fund’s holdings. If the fund is relatively small and is not growing in size, the fund provider may elect to close it on the grounds that it is no longer viable for them.
  • Market liquidity – the more liquid a fund, the lower the spread cost is (the difference between buying and selling prices).

When selecting the ETFs for our Thematic Investing portfolios, we choose those which have a strong relationship to our themes, are an appropriate size, and have sufficient market liquidity.

Relationship to the theme

Thematic Investing ETFs invest in a basket of companies that are aligned to their chosen theme.

The thematic fund's index provider chooses which companies to include, and uses a set of criteria to help them do this, which can range from industry classification to where they earn their money, and more. There are many index providers and many thematic funds, and this results in a great deal of variety across the board.

We look at the methodologies of different index providers, focusing specifically on purity of the theme – in other words, how aligned each company is to the theme of that overall ETF. Methodologies dictate which stocks are selected, and how they are weighed against one another, and therefore are a significant driver of investment returns.

Size and market liquidity

The size of a fund and its market liquidity (how easily and quickly a security can be sold) are closely related.

Larger funds have more liquidity. This minimises the costs to our investors. In addition, it also means that our clients are not concentrated into a fund which has increased risk of it being closed by the provider.

Given the long-term nature of the thematic portion of the portfolios, we don't expect to make frequent adjustments or changes to its underlying ETFs. However, we regularly review the ETFs within the thematic portion, and also keep an eye on developments within the industry. New ETFs come to market quite regularly, and scalability is also an important consideration; we may make changes where it is appropriate for us to include new ETFs due to changes in size, market liquidity or both.

If you need information about different investment products, or want to see if our Thematic Investing portfolios could be suitable for you, you can book a free call with one of our experts to discuss your options.

Why is Thematic Investing only available for risk level 5 and above? 

Thematic Investing is only available for clients with a risk level of 5 or above due to the nature of this investment strategy. To ensure your Thematic Investing pot is focused on your chosen theme it must be exposed to a certain amount of equities that focus on the trends underlying this theme. For risk levels one to four – which have a higher overall allocation to bonds, a lower-risk asset – the thematic allocation would be too small, and could no longer be considered ‘thematic’.

In risk levels one to four, portfolios are managed with a greater emphasis on minimising foreign currency risk. The Thematic portion of Thematic portfolios has a greater exposure to foreign currencies, particularly the US Dollar. This makes these portfolios unsuitable for lower risk investors.

 

Risk warning

As with all investing, your capital is at risk. The value of your portfolio with J.P. Morgan Personal Investing can go down as well as up and you may get back less than you invest. Past performance and forecasts are not a reliable indicator of future performance. Thematic Investing carries specific risks and is not for everyone. A trend isn’t guaranteed to deliver positive investment returns. Our themes, like Resource Transformation, don’t include ESG considerations. For example, Resource Transformation is likely to involve a mix of renewable and non-renewable materials and energy sources. We do not provide investment advice in this update. Always do your own research.