Morningstar's Global Thematic Funds Landscape Report Shows Record Inflows into Thematic Funds Since the Start of COVID-19 Pandemic
Morningstar (MORN) has released its Global Thematic Funds Landscape Report, highlighting significant growth in thematic funds. Assets under management in these funds have surged to $806 billion, tripling over three years. The report notes a record 589 new thematic funds launched in 2021, more than twice the previous year's total. Notably, over half of thematic funds outperformed the Morningstar Global Markets Index in three years, although only one in ten succeeded over 15 years. Europe now dominates the market, holding 55% of assets, while the U.S. share decreased to 21%.
- Thematic funds' assets under management rose to $806 billion, up from $270 billion in 2018.
- A record 589 new thematic funds launched globally in 2021, indicating strong industry growth.
- More than half of thematic funds outperformed the Morningstar Global Markets Index over three years.
- Only 10% of thematic funds outperformed the market over a 15-year period, indicating potential long-term risks.
- More than three-quarters of thematic funds available 15 years ago have closed, suggesting instability in the market.
CHICAGO, March 24, 2022 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today published its Global Thematic Funds Landscape Report. Over the three years to the end of 2021, assets under management in thematic funds more than tripled to
"In recent years, we've seen a dramatic rise globally in the popularity of thematic funds," said Kenneth Lamont, senior manager research analyst at Morningstar. "Our data shows these funds' assets are growing to record levels across the globe, and as the menu of themed funds continues to expand, investor demand for clarity and guidance has increased commensurately."
The Global Thematic Funds Landscape is available here. Additional key findings from the report include:
- A record 589 new thematic funds debuted globally in 2021, more than double the previous record of 271 new fund launches in 2020. These funds attempt to harness secular growth themes ranging from artificial intelligence to Generation Z.
- More than half of thematic funds globally survived and outperformed the Morningstar Global Markets Index over the three years to the end of 2021. However, this success rate drops to just one in ten thematic funds when looking at the trailing 15-year period. More than three-quarters of the thematic funds that were available to investors at the onset of that 15-year period were closed.
- Europe is the largest market for thematic funds, accounting for
55% of global thematic fund assets, having expanded from15% since 2002. In the U.S., thematic funds' market share shrank to21% from51% over the same period. - Funds tracking Multiple Technology Themes, with $105 billion in combined assets, represent the most popular thematic grouping globally. These funds' tendency to favor disruptive technology companies influences where they land on the Morningstar Style Box. In the U.S.,
70% of thematic funds fit on the growth side of the Morningstar Equity Style Box, while just7% landed on the value side.
Thematic Funds Dataset in Morningstar Direct's Analytics Lab
The Thematic Funds dataset featured in this report is now accessible to Morningstar Direct users through a new capability called "Analytics Lab." Morningstar's prebuilt datasets scale analysis, visualize results, and document methodology so users can automate processes that were previously cumbersome or impossible to accomplish.
Using the Thematic Funds dataset, Morningstar Direct users can:
- Understand the Morningstar thematic funds' landscape, what investments are classified as thematic funds, and where they fall in the thematic taxonomy.
- Analyze the asset growth for specific investment themes and highlight which have caught on as being most popular with investors.
- Identify which open-end funds and exchange-traded funds are classified to a specific theme.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, and institutional investors in the debt and private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately
Morningstar's Manager Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC. This press release is for informational purposes only; references to securities or a separately managed account investment strategy in this press release should not be considered an offer or solicitation to buy or sell the securities or to invest in accordance with that strategy.
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Morningstar Media Contact:
Landon Hudson, +1 312 696-6037 or newsroom@morningstar.com
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