22 Apr 2020

Thematic ETFs: staying one step ahead in an ever-changing world


For Marketing Purposes:

FOR QUALIFIED INVESTORS ONLY– This document is reserved and must be given in Switzerland exclusively to Qualified Investors as defined by the Swiss Collective Investment Scheme Act of 23 June 2006 (as amended from time to time, CISA).

What is thematic investing?

Thematic investing is a kind of top-down approach which focuses less on traditional economic indicators such asinflation and GDP growth. Instead, it looks at longer-term, structural trends in the world, ones that could driveperformance in ways traditional investors may not yet realise.

These could be geopolitical, such as growing power and wealth in emerging economies, or technological, such as thetransformative impact of disruptive technology and digitalisation, or social, such as the way accelerating urbanisationwill expand the world’s cities many times over in the decades to come. Climate change and resource scarcity is anothersuch ‘megatrend’ which will cascade through the world’s companies over the next few decades – a shift which atraditional shorter-horizon investment approach may not accommodate.

Thematic investing’s global and long-term view is unconstrained by the geographical or sector categories of traditionalinvestment approaches. It aims to identify companies, wherever they are in the world, that may be positioned to benefitfrom emerging themes set to play out over years or even decades – not just the next financial quarter.

This forward-looking investing approach analyses how tectonic shifts will bring some companies great success, and othersexistential struggle. Tomorrow’s leading companies may be unknown today, operating in areas which will come torevolutionise some aspect of daily life, whether that’s AI, carbon-neutral technology, fully autonomous vehicles orsmart homes.

Conversely, today’s winners – the world’s biggest companies, systematically preferred by market-cap-weighted funds – maystruggle in a new millennial-led environment of green energy, digital transformation and disruptive technology

How to capture themes in investment portfolios

Thematic investing isn’t a new concept. Some active investors have practised this approach for decades, usinghuman-based quality control and dynamic stock selection. This has often been accompanied by higher management fees and alack of transparency.

What’s new about thematic investing in recent years is the democratisation and cost reduction of the strategy – bringingadvanced technologies and low-cost passive investment vehicles into a space that was once the preserve of the activemanager.

Lyxor has partnered with indexing giant and data powerhouse MSCI to create a new set of indices covering some of thebiggest thematic investing trends of our world. These combine active human oversight, passive implementation, and thelatest data science technologies to build portfolios that should thrive in the future – for a fraction of the price ofmost standard active funds.

The five new Thematic ETFs cover what we feel are the most important emerging investment themes of our age: the growthof the Digital Economy and Disruptive Technology, urban change with Future Mobility and Smart Cities, and the buyinghabits of Millennials.

Digital economy

Digital Economy

The Digital Economy refers to economic activity resulting from online connections between businesses, devices and people. It includes established areas such as e-commerce, online payments and digital advertising, as well as rapidly developing fields such as cybersecurity, financial technology (fintech) and the sharing economy

Future mobility

Future Mobility

Transport revolutions have transformed the world over the past 300 years. The canal network, the creation of the railways, steam-powered ships, the introduction of petrol and diesel internal-combustion engines in cars, and the invention of flight were the biggest breakthroughs. Future Mobility captures the next stages of human transport, which will upend our lives once again

Smart Cities

Smart Cities

Cities already house half of all people on Earth, and another 2.5 billion people are expected to join them by 20501. Ninety percent of this increase will be in Africa and Asia2. Smart Cities tackle challenges such as urbanisation and climate change with new technologies such as automation, the Internet of Things and smart grids.

Disruptive technology

Disruptive Technology

New Disruptive Technology will deliver simpler, more accessible, and often more cost-effective solutions to many of the biggest challenges faced by humankind. This is sometimes called “the fourth industrial revolution” – a revolution that will transform how we live and work. Companies embracing disruptive tech have the power to reinvent themselves and create new markets



Millennials – or Generation Y as they are also known – are set to have a huge impact on the global economy. Their spending and saving decisions will mean the demise of some long-established business models and the rise of new ones. Millennials include the 2.4 billion people born in the 1980s and 1990s3. They make up almost one-third of the global population and are already taking over from the baby boomers and Generation X who drove the economy in recent decades.

Each of our Thematic ETFs combines human insight, cutting edge data science and Artificial Intelligence techniques in a unique way to identify the companies that matter most, and ensure your portfolio stays one step ahead. As a pioneering ETF provider with a history of innovation, we’ve gone the extra mile to build some truly state-of-the art funds for a new state of mind.

We’re incredibly excited about this range and hope you can join us in preparing portfolios for change.

1 McKinsey Global Institute, June 2018, Smart Cities: digital solutions for a more livable future
2 United Nations, World Urbanization Prospects 2018. 3C40 Cities, https://www.c40.org/why_cities
3 Bloomberg using United Nations World Population Prospects data, August 2018,https://www.bloomberg.com/news/articles/2018-08-20/gen-z-to-outnumber-millennials-within-a-year-demographic-trend

Risk Warning

This document has been provided by Lyxor International Asset Management that is solely responsible for its content.

LYXOR INDEX FUND - Lyxor MSCI Digital Economy ESG Filtered (DR) UCITS ETF - Acc, domiciled in Luxembourg, LYXOR INDEX FUND - Lyxor MSCI Millennials ESG Filtered (DR) UCITS ETF - Acc, domiciled in Luxembourg, LYXOR INDEX FUND - Lyxor MSCI Smart Cities ESG Filtered (DR) UCITS ETF - Acc, domiciled in Luxembourg, LYXOR INDEX FUND - Lyxor MSCI Disruptive Technology ESG Filtered (DR) UCITS ETF - Acc, domiciled in Luxembourg, LYXOR INDEX FUND - Lyxor MSCI Future Mobility ESG Filtered (DR) UCITS ETF - Acc, domiciled in Luxembourg, (Registered Funds) are collective investment schemes approved by the Swiss Financial Market Supervisory Authority FINMA (FINMA) as foreign collective investment schemes pursuant to article 120 of the Swiss Collective Investment Schemes Act of 23 June 2006 (as amended from time to time, CISA) for distribution in Switzerland to non-Qualified Investors as defined in the CISA. The above mentioned Exchange Trade Funds (ETFs) are listed on the SIX Swiss Exchange.

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