The contemporary world of thematic investing offers unique glimpses into India’s ever-evolving growth story – from AI to electric vehicles to renewable energy, these sectors will play a pivotal role in the path carved by the Indian economy in the coming years. As more and more investors jump onto the thematic investment bandwagon, the space is seeing radical shifts in terms of the definition of themes. Also, with a bunch of sectors bringing about disruptions in the economy and the lives of citizens, the realm of thematic investing is witnessing the advent of new themes. Here are a few global themes that are here to stay and investors should consider adding to their portfolios:

ESG: In the realm of thematic investing, ESG investing has been receiving attention from the investor community across the globe and in India too, the chatter around ESG investing has only grown louder.The belief that investors have the power to usher in change by pushing large corporations to implement responsible practices in terms of environmental, social and governmental practices forms the crux of ESG investing. ESG investing can help serve two purposes: it can be viewed as a risk mitigation tool, and it can open windows for monetising new opportunities. This can safeguard returns in the long term because of the investments being spread out in companies that are better equipped to deal with the challenges arising due to climate change and as an investor you can capitalize on emerging technologies. Also, the chances of unethical or illegal practices at such companies would be lower because of strong social and governance value systems.

Renewable energy: The urgency of the climate change problem and the need to fundamentally change how the global population consumes energy has triggered disruptive innovation that is drastically altering the energy landscape. Retail investors can play a crucial role in accelerating this global switch to clean energy. The Indian energy sector is also going through a tectonic shift. There is a significant thrust on the part of the government to maximize the usage of clean energy sources. A large number of large-scale sustainable power projects in the country continue to materialize and there is an extensive promotion of green energy.India’s efforts in embracing clean energy are showing results too – India earned the third position after United States and China in EY’s Renewable Energy Country Attractive Index 2021.Thus the renewable energy sector can offer investors chances to reap handsome returns in the long run.

Artificial intelligence: In this age, an overwhelming majority of the global population is using products and services that use artificial intelligence (AI) as their building blocks. Be it the algorithm stitching together your music playlist, the product suggestions on your favourite e-commerce portal or the instructions you dole out to your voice-powered personal assistants like Siri and Alexa – artificial intelligence is what powers these functionalities and makes lives simpler. Artificial intelligence entails the development of computer systems with the goal to replicate human behaviour to an extent and perform activities and tasks that would otherwise need human intelligence. The world of AI is still in its nascent stages but it is undeniable that it will impact our daily roles in deeper ways and shows great promise for the future. The AI global market is already worth hundreds of billions of dollars and is only going to expand with leaps and bounds which makes it a worthwhile investment idea.

Electronic Vehicles: With top Indian automakers in India making a beeline to launch a repertoire of electric vehicles, the electric vehicle space in India has emerged as a new flavor of the season in the realm of thematic investing. The Indian electric vehicle market size was valued at USD 220.1 million in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 94.4% from 2021 to 2030. India’s existing prowess in the technological sector and its enviable resources of renewable energy sources are expected to provide a conducive environment for the evolution of the electric vehicle industry in India. Besides, the government has also undertaken multiple initiatives to promote the adoption and manufacturing of electric vehicles across the country. The growth trajectory for EVs is expected to be strong and this makes it a theme that investors should watch out for in the future.

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