NAVIGATE OUR THEMATIC RANGE

Invest in the long-term trends transforming the way we live and work.

WHAT IS THEMATIC INVESTING?

Thematic investing is an approach which focuses on predicted long-term trends rather than speciﬁc companies or sectors, enabling investors to access structural shifts that can change an entire industry. At the centre of iShares’ Thematic investing philosophy lies 5 megatrends: rapid urbanisation, climate change and resource scarcity, emerging global wealth, demographics and social change – all driven by the ﬁnal megatrend: technological breakthrough.

A conﬂuence of these global megatrends is prompting structural shifts in many industries and changing the drivers of companies’ earnings.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

THEMATIC INVESTING AT BLACKROCK

BlackRock & iShares Thematic suite is positioned to access the long-term effects of these megatrends, offering both index and actively managed funds.

Our Thematic Research and Investment Group (TRIG) identifies long-term themes driven by one or more of the 5 global megatrends, as well as working with outside resources to look for trends. They then apply a repeatable process to decide if the theme is better suited to an index approach, or an active approach.

Index: Narrow investment universe, low divergence between companies and few Initial Public Offerings (IPO).
Active: Broad investment universe, high divergence between companies and many IPOs.

5 MEGATRENDS SHAPING OUR FUTURE

Technological breakthrough

Technology is driving exponential progress in the tech sector and far beyond.

Rapid urbanisation

Mass migration to cities will require new business models and infrastructure.

Demographics and social change

Longer lifespans and modern lifestyles will change medicine and consumer habits.

Climate change and resource scarcity

Demand for a clean, green tomorrow will advance energy and conservation.

Emerging global wealth

Newly affluent consumers will expand in Asia and across emerging markets. Emerging market economies are predicted to represent largest economies.

NAVIGATE OUR RANGE

iShares funds (index) Top by AUM as at 30 September 2021

ALL FUNDS

TECHNOLOGICAL BREAKTHROUGH

Breakthrough innovation is necessary to address large-scale challenges (e.g. ageing economies, climate change), while new solutions are also targeting relatively minor problems (e.g. payments, streaming). This backdrop has created a fertile ground for disruptive innovation and Thematic investing.

RAPID URBANISATION

Cities have always been hubs for talent, capital and innovation. In the last decade, hundreds of large cities have been built in emerging economies, attracting significant infrastructure investments. Understanding the advantages and challenges of future cities can help us identify sources of growth.

DEMOGRAPHICS AND SOCIAL CHANGE

The forces that underpin this megatrend include ageing populations, the outlook for future jobs, immigration pressure, skills imbalance and different priorities of younger generations. Changes in global demographics will bring significant challenges and opportunities for societies and businesses.

CLIMATE CHANGE AND RESOURCE SCARCITY

An expanding population and the rising demand for food, energy and materials continue to strain the finite resources of the planet. The need for solutions that improve energy efficiency, lower food waste and provide alternatives to scarce resources has never been greater.

EMERGING GLOBAL WEALTH

In the last twenty years, developing economies have been lifted by the rising tide of globalisation and manufacturing shifting. The emergence of a sizeable, aspirational middle class, particularly in China might offer significant growth potential for domestic and multinational firms.