A survey commissioned by WisdomTree has revealed that professional investors in Europe regard artificial intelligence (AI) as the most compelling long-term investment theme.
The survey conducted by Censuswide polled 803 professional investors across Europe responsible for managing approximately €4 trillion in assets. These investors include those from wholesale financial advisory firms, institutional investors, wealth managers and family offices.
Despite the geopolitical and economic challenges of 2022, which led to a defensive approach in portfolio management, 2023 has seen a more optimistic outlook, partly fueled by breakthroughs in AI technology. This optimism has been driving a tech stock rally, particularly in the first half of the year, despite an uncertain macroeconomic environment.
The survey also found that nearly 70% of professional investors reported an increase in their clients’ risk appetites, leading to a greater focus on riskier asset classes like thematic equities, including AI.
When investing in AI, 48% of the respondents emphasised the importance of diversified exposure to various business models within the AI sector. Furthermore, 44% prioritised purity of exposure, seeking investment products that accurately represent the AI theme.
Currently, 85% of European professional investors allocate to at least one thematic strategy, with 52% using ETFs for this exposure.
Pierre Debru, head of quantitative research & multi-asset solutions, WisdomTree, said, “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 of 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.”
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