Theme funds: Special - or too special?
Anything with animals? Sounds like the career aspirations of primary school students. Is also a new fund of Allianz Global Investors with the pet fund. Or hemp. The entire value chain up and down. What smells of only a handful of thematically pointed funds is by no means an isolated case. On the contrary: a whole series of new funds pounce on pointed investment themes. No calming development.
But from the beginning. And at the beginning are the numbers. According to industry association BVI, 548 new funds were launched in 2017, 374 funds closed and 103 merged. In total, there are over 10,000 funds. The trend is clear - towards more and more new funds.
The vendors are facing a real challenge: In view of these figures, how do you succeed in bringing the umpteenth multi-asset or global bond fund to the man or woman? Away from gun violence probably not an easy task. After all, the eternally same story would have to be told, about the immense significance of the scatter. The story is true and remains true, but already told many times. Amazement, interest, Have-Will effect? Nope.
The power of stories
So what could be better than tempting investors with new stories that have not yet been heard. Stories, sales veterans will confirm, always go. From adaptive chassis cars to kitchen appliances that provide recipe suggestions. And of course funds, for example with the focus on animals, robotics or hemp. Incidentally, this will also sharpen your profile as a provider with your hand on the pulse of the time. In addition, the fund companies emphasize the importance of active management - which is becoming more and more important in view of the steadily increasing spread of ETFs. But the colorful stories often do not catch on forever. And that is once more due to the bad numbers.
Above all, the sheer number of funds. There are more funds in Europe than in America, but on average they are smaller. But that also means that the funds are more expensive for savers. Simply because some costs have nothing to do with the size of the fund and are therefore more difficult on small funds than on large ones. Small funds are therefore more likely to be closed. For the customer this is annoying every time, but also for the provider. Because a good story then fades like morning mist in the wind of reality.
Risk of club risk
In addition: Thematic funds often carry a high concentration risk. This is shown by the example of logistics funds which were sold to the public around the turn of the millennium with great marketing effort. The bundled shares of logistics companies. And those, so the idea of fund providers, would benefit from the emerging online trade. But because it was precisely this competition that melted the margins of the logistics, the funds could not score. Good idea, good story - but not a good ending.
The boundaries between niche and utility are therefore fluid. Investors can use such theme funds to play trends in their own portfolio. But only if the trend is just "trending". Example Internet - initially a niche, now a megatrend in the form of digitization & Co. Well, who sat early on it. And the timing came up. Today a self-employed person.
But at the turn of the millennium? Some remember: The funds became popular when the hype ended. Lost money, shrank and closed. Back remained long faces with investors and providers. This is having an effect - just as many providers of open-ended real estate funds are still suffering from the closure and settlement of the then-beloved investor favorites.
New funds need the land. Really?
So the key question is: do you need special funds that play specific topics? Not necessarily. Large-scale large-scale funds, such as multi-asset funds, can also implement such themes. And even under the eyes of a fund management, which also keeps track of other trends and reacts if necessary. Only: This would make dogs and hashish only a partial aspect of the investment spectrum. And that may not attract a new investor behind the stove. Whereby, there are also counterexamples. The M & G Global Basics, for example, and its philosophy of only buying what people need on a daily basis. The manufacturers of toothpaste about. Or from dog food. A story, together with broad portfolio diversification? Go then.