In most cases, investing in theme funds was not worthwhile in 2022.

As the analysis company Scope now explains in a study, most funds were not only in the red in a difficult year for stocks, they also performed worse than the global stock markets as a whole.

Daniel Mohr

Editor in Business.

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The study, which is available exclusively to the FAZ, examined the 132 theme funds that can be purchased by German investors and that focus on several themes that are perceived as particularly attractive at the same time;

a popular and growing asset class, as Scope notes, with currently €72 billion invested.

On average, the sectorally broad multi-theme funds lost around 16 percent in value by the end of November 2022.

Investors who instead simply relied on the MSCI World global stock index fared much better with a minus of 6 percent.

A comparison group of 840 globally oriented equity funds without fixed themes also performed better than the multi-theme funds, down 11 percent.

With a view to three years, many theme funds are in positive territory

The performance looks much more attractive over a three-year period.

The themed funds are in the black with a return of 5 percent per year, but here too they remain well behind the return of 10 percent per year for the MSCI World.

However, this would not lead Scope analyst Simone Schieg to conclude that they should generally avoid investing in themed funds: "They are no substitute for basic investments such as broad global funds, but they can have their charm as an admixture," says Schieg.

“The investment thesis is intact for most funds.

But investors should study the funds carefully and understand them before they buy.”

Some funds, such as the largest in the category with an investment volume of a good 10 billion euros, Pictet - Global Megatrend Selection, focus on twelve main themes such as clean energy, robotics and smart city and 17 sub-themes such as circular economy, industrial efficiency and "happy living".

Energy stocks make the difference

Only three of the 132 funds examined had a positive annual return up to November 2022, the JSS Sustainable Equity Global Dividend with a focus on dividends, the Fulcrum Thematic Equity Market Neutral Fund, which also bets on falling prices, and the KBC Equity Fund Strategic, which is one of the invested in energy stocks in a few theme funds, which had a particularly good year in 2022 and explain a good part of the difference in returns, as energy stocks only appear in very few theme funds.

Among the topics, demography, mobility of the future and nutrition did best.

Funds for the new digital economy and fintechs funds were the weakest performers.

Even after three years, these two categories are behind, mobility of the future and robotics & automation in front.

Among the individual values, Microsoft appears most frequently.

38 percent of multi-theme funds have the stock among their top ten holdings, with an average weight of 3.5 percent.

It is followed by the Google company Alphabet, United Health, Amazon, Thermo Fisher Scientific and Apple.

Scope analyst Schieg also points to the competition between actively managed theme funds and ETFs.

"Multi-themed funds are mostly managed by active fund managers because they are complex and require extensive research, while mono-themed funds are often covered by ETFs," says Schieg.

“It will be exciting to see how the competition develops here.

Active fund managers often criticize the lack of breadth and depth of the market for monothematic strategies to have enough stocks to choose from, ETFs have it easier here.”