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Welcome, hello, my name is Philippe Muller.

I am responsible for investment themes at UBS Chief Investment Office.

You can invest in companies.

You can invest In regions or you can actually invest in asset classes.

But today I want to talk about Investment in themes.

Investment in themes is complimentary, and

first we need to understand what is a theme?

So today I would say a theme is not the same as security and

I would say its not an asset class, why?

I'm looking for a theme as a group of security that is behaving and

being driven by some drivers and not necessary just by a regional allocation.

Now that we understand that this can be a grouping of securities,

we need to understand the benefit of that.

Now grouping securities quite often brings the benefit of diversification.

So grouping securities that, for example, react to high dividend quality or

to specific demands patterns can actually enhance diversification.

Securities that we classify our themes can actually also add

additional performance potential for investors.

Think about it that the normal portfolio invest in US equities.

I'd like to understand what's best within US equities,

so maybe share buyback stocks in the US might be a good opportunity.

And the third benefit for me, is actually not just that's a communication tool

helping a client to understand his investment and

maybe even to move his portfolio from a less optimal situation to a better one.

But it is actually also where the client understands his investment,

he can tilt his portfolio according to his needs.

Take an example, sustainable investments.

You can add sustainable investment into your portfolio

without changing the risk of your portfolio.

Using the word of risk, very important.

I look at investment themes as being a complementary part to the traditional

allocation.

So it is typically a satellite.

It should not affect your overall risk behavior.

Don't put too many things together that would suddenly be a very risky portfolio.

Spice up your portfolio with investment themes to have a good feeling and

capture additional performance potential.

Now, why are themes not part of a fixed asset allocation?

It's simple, because themes are usually an evaluation opportunity or dislocation.

Once the valuation opportunity is gone, the opportunity and the theme is gone.

It's temporary in nature.

But to be honest, it can be couple of months,

such as dividend investing in Europe,

where you have an opinion that it might outperform the next couple of months.

Or it can be actually based on structural trends such as population growth,

aging, or even urbanization drivers affecting themes in the long run.

So investment themes can be sustainable investment themes,

it can be long term themes, it can be short term themes.

I hope you understand it's a complementary investment style.

And with this, a thank you for your attention.

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Thematic investing - UBS guest speaker

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