Man Group examines quantitative approaches to thematic investing

Man Group PLC has published a study evaluating the role of quantitative techniques in thematic investing. The firm suggests that traditional discretionary approaches may not fully capture the nuance of thematic trends, and that systematic, data-driven methods offer a more rigorous framework for exposure.

According to the report, thematic fund assets under management grew to $806 billion by the end of 2021. Man Group notes that advancements in data analytics allow investors to model companies as connected networks that transcend traditional sector classifications, providing a more granular understanding of market trends.

The analysis outlines three primary challenges: theme identification, the selection of optimal exposure, and determining the appropriate timing for allocation. By applying quantitative models to these processes, Man Group argues that investors can better manage unintended biases and evaluate the viability of themes through a more structured methodology.