Investors see artificial intelligence (AI) as the most compelling long-term thematic investment opportunity ahead of biotech and cyber security, research commissioned by ETF provider WisdomTree has revealed.
Almost three-quarters (71%) of the European-based professional investors polled by WisdomTree and CoreData Research said they were most excited by the AI theme, with three-fifths (60%) choosing biotechnology and half (47%) selecting cyber security. Next most popular were cloud computing and battery solutions at a third (33%).
Meanwhile, three-fifths (61%) said they expected to increase their allocations to these themes over the next 12 months, with a quarter thinking their exposure would stay the same.
WisdomTree's head of UK and Nordics Ravi Azad said the research showed a growing popularity for thematic investing, which he noted had "benefitted from strong returns during the coronavirus pandemic".
"While AI, biotech and cyber security present compelling long-term opportunities, cloud computing has had a strong year as organisations have transitioned to the cloud quicker than experts anticipated," Azad reasoned.
"Once seen as a fad, thematics are becoming important building blocks in portfolio construction due to their long-term growth potential."
Biotech has been thrust into the spotlight through the current health crisis, as firms look to find solutions or vaccines for the virus. Cyber security, meanwhile, has also been a key focus, as more people work from home.
Christopher Gannatti, head of research for Europe, added: "As investors look to add high growth specific allocations to portfolios, we expect the popularity of thematic equities that provide differentiated exposures to continue growing."
The survey asked 440 professional investors, including wholesale advice firms to wealth managers and family offices, from across Europe managing around €240bn in assets.