InvestmentsMar 17 2023

Moneyfarm launches thematic investing portfolios

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Moneyfarm launches thematic investing portfolios
Giovanni Daprà, co-founder and chief executive officer at Moneyfarm
BySonia Rach

Moneyfarm has launched thematic investing portfolios to allow clients to invest in companies with revenues that are tied to social-economic megatrends.

Investors will have the opportunity to choose between three distinct investment solutions covering three megatrends.

These include: technology and innovation; demographic and social shifts; and sustainability. 

A fourth portfolio will also be available which is "multi-trend", ie, a mix of the three identified macro-trends.

Investors with a minimum of £10,000 “core” invested with Moneyfarm will have the option to allocate a small proportion of their investments in these “satellite” portfolios. 

They in turn are 100 per cent invested in equities with underlying ETFs dedicated to the main macro themes that have the potential for improved growth in the future, such as clean energy, smart cities, and the blue economy.

Using a mid to long-term strategy, Moneyfarm has adopted a ‘core-satellite’ investment approach, with portfolios designed to give investors with a medium to high-risk appetite more alpha (excess return) and the ability to align the investments with their own values and interests.

Richard Flax, chief investment officer of Moneyfarm, said: "Our rigorous approach, supported by machine learning technologies, guides and supports the investor through the world of thematic investing, explaining strategies and helping the investor to make informed and appropriate decisions. 

“As an asset allocation team, we constantly track emerging megatrends that we may wish to consider, and respond to the ever-changing needs of our clients. Our objective is to always provide investors with cutting-edge tools to improve and personalise their portfolios.”

To ensure a balanced level of risk, each investor will be assigned a total quota by Moneyfarm, from 5 per cent to 20 per cent of their portfolio, that they will be able to invest in one or more megatrends. 

Moneyfarm said the cap is designed to safeguard investors from taking any undue risks with their “core” investments and instead have a measured exposure to high yielding “satellite” portfolios. 

The firm has therefore ensured that the thematic investments are not provided as standalone products, but are part of the client’s portfolio.

Moneyfarm said by correctly inserting them into the clients' portfolio, it carefully evaluates the risk linked to the single asset class, unrelated to the general trend of the market in this solution which is higher than in traditional investments. 

The core and satellite portfolios will be managed and displayed separately, so clients can view and assess their respective performance figures without any ambiguity.

Investors will also be supported by a Moneyfarm investment consultant who will assist them in choosing the right themes that match their values as well as their risk appetite, return objectives, and that offer the best value over time.