Introduction

In a previous post, we introduced Thematic, a modern platform for building, launching, and managing custom investment products at scale, with a focus on indices, Exchange Traded Funds (ETFs) and structured products for asset managers of any size. We believe that there are thousands of great investment managers and investable themes that could come from anywhere—not just the traditional financial institutions and asset management firms.

To that end, we’re building a platform that lets people with investment ideas focus on creating and managing investable products. Thematic’s technology stack was built from the ground up to meet the demands of investment managers (current and prospective) working across all investable sectors. With Thematic, emerging managers can express their views of the market, build their reputation as thought leaders, and provide investors with finely-tuned strategies that can react to changing market conditions.

We’re just getting started, and we’re excited to bring you along for the journey. Here we’ll detail what you can do with Thematic and give you a sense of where we’re going.

How Thematic works

Thematic starts with you. Let’s say you have an area of deep interest or expertise, or an investing thesis backed with research and conviction. You’re curious to see how your investment thesis might play out, compared to the market and other investment products. You pull together publicly available financial data into a spreadsheet and track the performance over time. And you’d be interested in sharing your ideas with others, potentially making income from products you build.

If any of this resonates, you’re like a lot of us - people with a lot of creativity, and energy, but lack a platform and tools to channel investing ideas. We’re building Thematic for you. So how’s it work?

Thematic starts with creating an index to express your investment thesis. Current index creation workflows are no picnic - our customer research shows us that the workflow goes something like this:

1. Develop index investment thesis
2. Screen for securities via rules
3. Search for individual securities
4. Research individual securities for fit
5. Determine index characteristics (i.e. weighting methodology)
6. Calculate performance
7. Backtest and compare to other investment products
8. Repeat steps 2 - 7 until deciding to proceed
9. Publish index
10. Perform reconstitution/rebalancing at predetermined intervals

⁠This is a really lengthy process that takes a lot of motivation and determination to get through. How can we make this whole process easier and more accessible to high-signal individuals and teams? Our research indicated that index creators needed the most help with screening index constituents, calculating performance, and backtesting. So we’ve focused on those steps for the Thematic Index Builder.

The Thematic Index Builder is a tool built for individuals and teams to express their investment ideas in the form of an index. We’ve created a powerful query and search function to help index creators create security screening rules, search for individual securities, and filter out securities that are too small, too new, too illiquid, etc. Once the index creator has put together their basket of securities, they can easily run the performance of the basket, and compare the historical performance to other indices or securities. But perhaps one of the best features is that the creator can create “drafts” of the index and run them against one another. Once the creator has found a draft that they’re happy with, they hit publish, and - boom - the index is out in the public domain.

The Thematic Index Builder helped to create Lux Capital's indices and is also powering the quarterly reconstitution and rebalancing process for each index. If you’re interested in creating your own index, please reach out to us - we’re currently bringing on customers slowly to gather feedback and refine our product. Some of the fun things we’ve got on our product roadmap include community tools to help index creators support each other, marketing and distribution support via digital channels, and helping our creators turn indices into - investable ETFs!

And of course, if our mission and product resonate with you, we’d love to see if there’s a fit with our incredible team!

Thanks, and happy building, Team Thematic