Thematic funds have been added to the FE Invest Approved List for the first time.
The 12 thematic funds will cover seven sectors; financials, energy, commodities, consumer, technology, infrastructure and healthcare, while also providing exposure to macro trends.
For the commodities sector, Shawn Driscoll's T.Rowe Price Global Natural Resources Equity fund has been selected while for energy the $261m Guinness Global Energy and the Artemis Global Energy funds have joined.
In the consumer sector, the €986m Fidelity Global Consumer Industries and the Morgan Stanley Global Brand funds have been added to the Approved List while for healthcare, David Pinniger's $479m Polar Capital Biotechnology and the Schroder Global Healthcare funds have also joined.
Finally, the Premier Global Infrastructure Income fund is the one infrastructure fund added while two financial funds have joined; the Jupiter Financial Opportunities and Polar Capital Global Insurance funds.
The methodology for selecting the funds mirrors the broader FE Invest Approved List, however due to the performance being highly correlated to the sectors they are invested in, additional weight is given to the qualitative overlay to avoid punishing funds for sector performance.
Rob Gleeson (pictured), head of research at FE, commented: "Rather than covering a particular asset class, style or strategy, thematic funds focus on a sector or theme.
"This means they often behave differently to general asset classes, so incorporated in a broader portfolio can offer additional diversification benefits."
"We believe that predicting the future is futile and that preparing portfolios for, and protecting them against, all scenarios is best practice.
"The funds picked are those we believe to be the best within each sector and, importantly are not highly correlated to other funds on the FE Approved Invest List - maximising the diversification potential."
While commenting on two of the funds added to the FE Invest Approved List, Sophie Meatyard, fund analyst at FE Invest, said: "The Jupiter Financial Innovation fund aims to benefit from the digital transformation of the financial services sector. The fund has a strong track record of investing in financials and the manager has proven his ability to pick winners versus his peers.
"The Fidelity Global Consumer Industries fund, invests across the consumer staples and consumer discretionary industries on a global basis. Manager Aneta Wynimko has established a strong track record of stock picking and her ability to position the portfolio across the defensive staples, and sensitive discretionary sectors to benefit from different market conditions is impressive."