Kanish Chugh

ago before ETFs were around in Australia, very limited capacity for an investor to say, well, I want to take the theme of demographics.

I want to take the theme of robotics and automation.

You just couldn't do so.

You even probably couldn't do the liberal sector investing that you can do now.

As ETFs have evolved, investors now have an ability to really be specific in targeting areas in their portfolios that mean something to them or that they want to take exposure to because they believe that

area and so that's really where why we're seeing thematic investing grow is because of that evolution I feel of ETFs.

Now to think about thematic investing you know I linked it back to sectors I also want to link it to

making sure people understand that when you're talking about thematics in Australia, you're talking about exposures to disruptive long-term mega trends.

So that's things like robotics and automation, biotechnology, you know, battery technology, cybersecurity, even e-sports to a certain extent.

You don't have ETFs yet that are what I call a fat ETF.

And so that's where

We get a lot of questions when talking to retail clients, when talking to financial professionals as well.

They say, well, I like the idea of robotics and automation, but how do I actually allocate to it?

Because, you know, where do I fit it into my portfolio?

And what I say is, well, if this is a thematic that you believe is a long-term disruptive megatrend, well, then it has a place as a satellite in your portfolio in the same way a sector would or the same way emerging markets would.

Because in a lot of ways, emerging markets and thematic investing can be seen along the same line, you know, the idea of...

The emerging new economies such as India, that's a thematic in itself.

So that's what I would say is make sure when you're looking at thematic investing, look at it with the lens of is this a long term disruptive megatrend?

You know, if you looked at the US ETF market, you'd probably find some short term or what I call fad ETFs.

So make sure your thematic view is not a fad.