When constructing a portfolio, active managers should have a clear investment philosophy that outlines the types of companies that will align with their strategy. Growth investors typically seek companies that will outgrow the economy, their peers, or the market at large. Emerging growth investors want to find those same companies early in their development. The challenge lies in sourcing these prospective companies, as they are often small, undiscovered, or not widely covered by Wall Street. This is where “thematic investing” can be a valuable tool, offering a strategic approach to finding these hidden gems.

THE MAKING OF A GOOD THEME

Thematic investing starts with identifying undeniable tailwinds in a market, industry or the economy at large and then broadly applying those indisputable market truths to potential new investment ideas. A dynamic, change-fueled marketplace constantly serves up these new trends. Whether driven by technological innova