Morningstar data shows a surge in activity globally, but Canada's stats are choppy
Assets under management (AUM) in thematic funds more than tripled globally between 2018 and the end of 2021.
The total AUM was US$806 billion at the end of that period, while 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.
However, Morningstar research shows that, while growing, thematic funds are a small part of the Canadian fund universe. AUM was $2.6 billion at the end of 2021, although this was up from $405 million five years earlier.
Last year started with $755 million inflows for Canadian thematic funds in the first quarter but slowed to less than $200 million for each of the other three quarters. With more than $1 billion invested, this was double that of the previous year.
Globally, there was a record number of launches with 589 new thematic funds in 2021, up from the previous record of 271 in 2020. There were 23 debuts in Canada.
"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."
Most popular funds
Funds tracking multiple technology themes are the most popular thematic funds, Morningstar’s Global Thematic Funds Landscape Report reveals.
Canadian investors favoured social, physical world, and technology focused funds. Energy transition themes were by far the largest by AUM.
Europe is the largest market for thematic funds, accounting for 55% of global thematic fund assets, having expanded from 15% since 2002. In the US, thematic funds' market share shrank to 21% from 51% over the same period.
🚨 Record Breaking News 🚨
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589 new thematic funds debuted globally in 2021, more than double the previous record of 271 funds launched in 2020. Morningstar dives deep to find the inspirations behind the changing landscape. https://t.co/HTsLdAeQdr
