The HANetf thematic survey has revealed how financial professionals see thematic investing impacting their investment decisions over the next 12 months.
The survey was circulated to wealth managers and IFAs (independent financial advisers) across Europe, with a combined collective AUM (assets under management) of €136.125bn.
The results of the survey indicated that 90% of respondents expect to increase their exposure to thematic ETFs (exchange-traded funds) over the next 12 months, and 95% reported increased client interest in thematic investing.
Thematic performance
The survey also includes performance of the indices tracked by HANetf’s thematic UCITS ETF range.
Since Russia’s invasion of Ukraine in February, oil and gas prices have soared and its therefore no surprise that the Midstream Energy theme has driven performance.
From 31 December to 30 April, the Alerian Midstream Energy Dividend UCITS ETF (MMLP) made a return of 18.3%
Natural gas prices briefly jumped above $8 per million British thermal unit (MMBtu) on 18 April. Prices were driven by colder than expected temperatures, strong LNG export demand, and below-average inventories.
“Companies in the Midstream Energy space are also becoming more ESG focused, looking toward solutions such as carbon capture and responsibly sourced gas,” said the report.
Midstream Energy is favored for its income potential – in 2021, the ETF provided a yield of 8.3%.
The long-term outlook for US natural gas benefits from plentiful resources and growing demand. The US Energy Information Administration (EIA) forecasted that US natural gas demand will grow through 2050, while production is expected to grow by over 20% from 2021 to 2050.
The expected growth in natural gas production and demand will require additional energy infrastructure, which is the “bread and butter of midstream energy”.
Thematic Survey
Financial professionals already have sizeable exposure to thematic funds. However, they expect both their own exposure to thematic funds and the wider thematic ETF market in Europe to continue to grow.
The survey was completed by 60 wealth managers and IFAs across Europe. Those surveyed had a collective AUM of €136.1bn.
Overwhelmingly, advisers both expect client interest and exposure to increase over the next 12 months.
They also expect the amount of AUM in thematic ETFs to grow to at least $50bn by the end of 2022.
Financial professionals are split on which themes they are most bullish about. However, among the most popular were blockchain, decentralised finance and the crypto economy, renewable and clean energy, and the Metaverse.
The largest number of respondents (26.7%) identified “blockchain, decentralized finance, and the crypto economy” as the theme they feel most positive about.
Clean and renewable energy was also popular, with 25% of respondents identifying it as the theme they are most bullish about.
An emerging theme over the past year has been the Metaverse. 93.3% of respondents said they were either very or somewhat bullish on the theme. Less than 4% said they were not bullish on theme.
