Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today published its Global Thematic Funds Landscape Report. Over the three years to the end of 2021, assets under management in thematic funds more than tripled to $806 billion worldwide. Thematic funds’ share of all assets invested in equity funds globally was 2.7% as of the end of 2021, up from 0.8% 10 years ago.
“In recent years, we’ve seen a dramatic rise globally in the popularity of thematic funds,” said Kenneth Lamont, senior manager research analyst at Morningstar. “Our data shows these funds’ assets are growing to record levels across the globe, and as the menu of themed funds continues to expand, investor demand for clarity and guidance has increased commensurately.”
The Global Thematic Funds Landscape is available here. Additional key findings from the report include:
- A record 589 new thematic funds debuted globally in 2021, more than double the previous record of 271 new fund launches in 2020. These funds attempt to harness secular growth themes ranging from artificial intelligence to Generation Z.
- More than half of thematic funds globally survived and outperformed the Morningstar Global Markets Index over the three years to the end of 2021. However, this success rate drops to just one in ten thematic funds when looking at the trailing 15-year period. More than three-quarters of the thematic funds that were available to investors at the onset of that 15-year period were closed.
- Europe is the largest market for thematic funds, accounting for 55% of global thematic fund assets, having expanded from 15% since 2002. In the U.S., thematic funds’ market share shrank to 21% from 51% over the same period.
- Funds tracking Multiple Technology Themes, with $105 billion in combined assets, represent the most popular thematic grouping globally. These funds’ tendency to favor disruptive technology companies influences where they land on the Morningstar Style Box. In the U.S., 70% of thematic funds fit on the growth side of the Morningstar Equity Style Box, while just 7% landed on the value side.
Thematic Funds Dataset in Morningstar Direct’s Analytics Lab
The Thematic Funds dataset featured in this report is now accessible to Morningstar Direct users through a new capability called “Analytics Lab.” Morningstar’s prebuilt datasets scale analysis, visualize results, and document methodology so users can automate processes that were previously cumbersome or impossible to accomplish.
Using the Thematic Funds dataset, Morningstar Direct users can:
- Understand the Morningstar thematic funds’ landscape, what investments are classified as thematic funds, and where they fall in the thematic taxonomy.
- Analyze the asset growth for specific investment themes and highlight which have caught on as being most popular with investors.
- Identify which open-end funds and exchange-traded funds are classified to a specific theme.
