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Laxman Pai, Opalesque Asia: Thematic investing has gained traction among Asian investors during the pandemic, evident from the net inflows of US$19.8 billion and US$19.3 billion gathered in 2020 and 2021, respectively, said a study.
According to the report by Cerulli Associates, managers launched 112 sector equity funds domiciled within Asia in 2020, and another 198 such products in 2021.
The report said that in search of higher returns amid prolonged low-interest rates, investors flocked to equity funds in 2021, especially thematic-focused investments. Within the region, equity funds achieved asset growth of 27.9%, the highest among all asset classes, and gathered net inflows of US$155.6 billion.
Asia-domiciled global large-cap equity funds posted positive monthly net inflows throughout 2021, which accumulated to US$42.8 billion, it said.
With the technology sector forming the largest constituent of the S&P 500, at 28.7% based on its January 2022 factsheet, it is unsurprising that a similar trend was spotted for technology sector equity funds, where positive monthly net inflows during the year aggregated US$13.3 billion.
However, the stickiness of investors in these funds remains a concern, and as thematic funds are typically used for shorter-term bets, this runs the risk of investors booking profits after gains. Furthermore, returns slipped in 2021-for instance, technology sector equity funds in the region saw median yearly returns plummeting from 47.1% i...................... To view our full article Click here
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