Neuberger Berman: Staying on theme

Diverse exposure

When inflation, interest rates and global economic uncertainty are rising, cash today can seem more urgent than exposure to the markets of tomorrow. At times investors will have other priorities for their portfolios.

But investors who take that view could risk missing out.  When investors think about thematic investing, they tend to think about information technology and growth stocks, and about the long duration of a growing earnings stream. There is a lot of truth in this, which is why so many stocks in thematic portfolios have sold off so sharply since the start of this year. But it is not the whole story. When themes are defined sufficiently broadly, portfolios can not only be constructed with diverse exposures, but those exposures can be actively managed in response to changes in the macro...