30 NOV, 2023
WisdomTree’s research found that AI ranked as the most compelling long-term thematic investment
opportunity (28%) for European professional investors as developments in artificial intelligence and
solutions like ChatGPT propelled a tech stock rally in the first half of 2023, against an uncertain
AI was also deemed the most compelling long-term thematic investment opportunity in the 2019
professional investment survey commissioned by WisdomTree, which showcases investor
confidence in the theme over recent years.
The survey, conducted by Censuswide, a market research consultancy, polled 803 professional
investors across Europe, ranging from wholesale financial advisory firms and institutional investors
to wealth managers and family offices. The investors surveyed are responsible for approximately €4
trillion in assets under management.
In 2022, a series of overlapping geopolitical and economic shocks undermined investor sentiment
and risk taking, putting portfolios on a defensive footing. This year, despite many of these headwinds
persisting alongside new risks to contend with, an optimistic technological breakthrough around AI
has provided a powerful counter narrative for investors to buy into.
Alongside this, the research found that across Europe, nearly seven in 10 (68%) of professional
investors surveyed reported that the risk appetites of their clients increased, as they look to boost
exposures to riskier asset classes such as thematic equities like AI.
“The story for tech investors in 2023 has been driven by AI yet it has been the mega cap tech stocks that have benefited most, rather than those pure play AI companies suggesting there is still upside to be had for those interested in the theme. As always, investors need to take a balanced view to short-term positive or negative performance in thematics as these strategies need to be adopted with a long-term investment horizon. For those with long-term conviction in AI, there are smaller and exciting tech stocks providing pure exposure to artificial intelligence that have not necessarily participated in the rally we’ve seen.”<strong>Pierre Debru, Head of Quantitative Research & Multi Asset Solutions, WisdomTree</strong>
When looking to invest in AI, almost half (48%) of professional investors surveyed said they are
seeking diversity of exposure to relevant business models, rather than to one part of the AI supply
chain entirely. Purity of exposure to artificial intelligence (44%) ranked second, indicating investors
are seeking investment products that truly represent the AI theme rather than those investing in
companies loosely associated with it.
Currently, 85% of European professional investors have an allocation to at least one thematic
strategy, with 52% using ETFs to gain their exposure. ETFs are known for their flexibility and
transparency, fully disclosing their holdings on a daily basis. As no two thematic strategies in a given theme are created equal, having this level of transparency allows investors to take a deeper look at
holdings to ensure purity of theme, something they are unable to do with other investment vehicles.
“When it comes to investing in artificial<strong>Chris Gannatti, Global Head of Research, WisdomTree</strong>
intelligence, like many thematic investment products, investors have an array of options available. A
benefit to accessing thematics through ETFs is that they are transparent, allowing investors to spot
any overlaps in their portfolio. This transparency can also help investors determine if a product is an
accurate reflection of the promised theme or if the strategy provides limited exposure too. We
believe that thematic ETFs, built with third-party subject-matter experts, are best placed to
accurately reflect the industry and ecosystem – while providing all the transparency needed around
holdings. Our research seems to indicate that this approach is what investors desire, allowing them
to potentially access the winners of tomorrow and beyond.”
By Alexis Bienvenu
By Duncan Lamont