fam megatrends is a sub fund for fam evolution icav, a ... · cities 7,1% fintech 8,2% ageing...

FAM Megatrends is a sub fund for FAM Evolution ICAV, a UCITS Fund with segmented liability between sub funds. Fineco Asset Management D.A.C is part of the FinecoBank Group.FAM Megatrends is a sub fund for FAM Evolution ICAV, a UCITS Fund with segmented liability between sub funds. Fineco Asset Management D.A.C is part of the FinecoBank Group.

Born to Innovate

[email protected]

Fineco Asset Management D.A.C.One CustomHouse Plaza, IFSC, D1, Dublin, Ireland

FAM Megatrends is a sub fund for FAM Evolution ICAV, a UCITS Fund with segmented liability between sub funds.

Fineco Asset Management D.A.C is part of the FinecoBank Group.

Fineco Asset Management D.A.C. is regulated by the Central Bank of Ireland.

5

Index

MEGATRENDS

What are Megatrends and why should I invest?

Identifying Our Megatrends

Our Megatrends Demographics Sustainability Urbanisation Technology & Innovation

Underlying Thematic Drivers

OUR THEMES

Ageing PopulationOncologyWaterElectric & Autonomous VehiclesClimate Change

Smart CitiesFintechDrones

Themes Not Selected

OUR SELECTED FUNDS

Fund Selection ProcessPortfolio Construction

PortfolioFunds in detailFund Manager Biographies

PORTFOLIO ANALYSIS

7

9

1011121314

15

1819

202122

232425

26

3132

333438

44

INDEX

MEGATRENDS

9

What are Megatrends and why should I invest?

Megatrends are the powerful socio-economic, environmental and technological forces that shape ourlives. The digitisation of the economy, the rapid expansion of cities and the depletion of the Earth’s natural resources are just some of the structural trends transforming the way countries are governed, companies are run and individuals live their lives.

Megatrends, in short, are reshaping our world.

Certain companies are poised to benefit more than others from these structural changes, while others will struggle to stay relevant in a rapidly changing world. This presents a strong investment opportunity for those who can look beyond the short-term swings in the economic cycle and focus more on the long-term Megatrends that really matter.

Underlying these Megatrends it is possible to identify themes for investment. We believe that a portfolio of companies whose value drivers are underpinned by secular growth in this way can outperform the global equity market. Indeed, this ‘thematic’ approach to investing has been shown to add significant value over time.

MEGATRENDS

20

102

011

20

122

013

20

142

015

20

162

017

20

182

019

10

MEGATRENDS

The table above illustrates the performance of various investment themes compared with the broader equity market (MSCI World index). Historically, different investment themes have dominated at different points in time, and selecting the right themes at the right time is imperative. It is our goal to construct a portfolio of carefully researched and chosen themes which, properly constructed, can outperform the global equity market.

* YTD return as at December 12, 2009

Security

37,3%

Brands

12,5%

Timber

28,2%

Ageing Population46,5%

Biotech

24,4%

Big Data

18,1%

Robotics

24,2%

Health Care5,2%

Oncology

44,3%

Consumer Trends25,5%

Smart Cities0,8%

Smart Cities7,9%

Smart Cities9,1%

Biotech

-20,0%

Biotech

2,0%

Drones

-14,6%


Health Care1,9%

Timber

-16,6%

Health Care26,6%

Timber

25,0%

Timber

3,1%

Water

19,6%

Digital

34,7%

Security

23,2%

Security

17,3%

Digital

12,5%


Fintech

1,0%

Fintech

38,4%

Health Care32,7%

Biotech

11,0%

Biotech

24,6%


Health Care49,8%

Digital

19,6%

Environ-mental17,2%

Digital

21,2%

Brands

2,8%

Robotics

40,5%

Brands

20,7%

MSCI World-2,4%


Water

26,1%




Environ-mental16,3%

Security

-1,9%

Security

35,0%

Digital

29,9%



Biotech

39,6%

Biotech

42,2%


Brands

17,7%

Robotics

16,0%

Drones

18,9%


Environ-mental39,2%

Timber

20,6%

Digital

-3,0%

Health Care18,9%

Environ-mental25,6%

Brands

20,1%


MSCI World10,7%

MSCI World10,7%

MSCI World-4,1%

MSCI World30,0%


Consumer Trends-3,2%

Environ-mental18,6%

Fintech

22,6%

Digital

19,8%

Environ-mental12,3%

Water

10,6%

Fintech

12,9%

Digital

-2,1%

Biotech

34,4%

Water

16,2%

Water

-14,6%

Timber

-11,1%

Security

15,0%

Health Care21,9%

Fintech

18,6%

Smart Cities7,7%

Big Data

11,0%

Consumer Trends-7,6%

Big Data

30,6%

Health Care11,8%

Timber

9,3%

Timber

12,9%

Big Data

-3,4%

Water

33,0%

Biotech

13,9%

Health Care-12,1%

Brands

12,0%

Security

20,0%

Water

16,2%

Security

3,4%

Brands

10,5%

Water

-7,7%

Drones

29,7%

Water

11,7%

Brands

8,3%

Water

12,8%

Robotics

-5,9%

Smart Cities32.5%

Environ-mental4,2%

Environ-mental-12,4%

Environ-mental11,0%

Health Care-8,8%

Smart Cities2,7%

Environ-mental-12,7%

Digital

28,9%

Fintech

5,6%

Digital

11,7%

Smart Cities17,3%

Brands

14,9%

Timber

10,5%

Timber

15,2%

Ageing Population-1,4%

Security

10,0%

Biotech

-9,1%


Smart Cities7,1%

Fintech

8,2%


Smart Cities-6,8%

Brands

31,8%

MSCI World19,5%

Security

-6,1%

MSCI World14,0%

MSCI World21,2%

MSCI World19,5%

MSCI World10,4%

11

Identifying Our Megatrends

The concept of identifying secular growth drivers and macro trends for investment is not entirely new, and there exists a large catalogue of academia documenting research in this area. Consuming and analysing this research was a starting point for identifying the most attractive Megatrends for our portfolio.

A list of all the Megatrends extracted from this research was compiled, and we found that a small number were common across much or all the research we reviewed. By contrast, other themes might appear in only one paper and are not widely adopted. We focused our analysis on those Megatrends that are supported by well-documented and data-driven research from multiple sources, are easily relatable and have an intuitive investment rationale.

Importantly, to be included in our portfolio, these Megatrends must be:

TRUE

Factually proven with data driven research and statistical significance

IDENTIFIABLE

Can we witness these Megatrends in action?

DURABLE

Expected to grow further over the long term (10 years +)

INVESTABLE

Do companies operate in this space and can the Megatrend be captured within an accessible

investment opportunity?

1

2

3

4

MEGATRENDS

12

Our Megatrends

Having researched the marketplace extensively, we identified the following Megatrends as satisfying the criteria above and ultimately suitable for our portfolio:

By their nature, these MegaTrends are all intertwined. Developments in one MegaTrend often impact on at least one other. For example, improvements in living standards (technology & innovation) is supporting the growth in the global population (demographics), and this in turn impacts our use of natural resources (sustainability) and our requirement for urban development (urbanisation).

MEGATRENDS

DEMOGRAPHICS

URBANISATION

SUSTAINABILITYTECHNOLOGY & INNOVATION

13

1/4 - Demographics

The global population is forecast to increase by over 1 billion by 2030, according to reports published by the United Nations (UN) .

This unprecedented rate of growth is not evenly distri-buted either by geography or by generation. The world’s population is getting older, facilitated by improvements in medicine and technology, and increasingly the ideals of the millennial generation will begin to have an influence over employment patterns, consumption and expenditure.

Geographically, the effect is visible in both developed and emerging nations, however it is most pronounced in Asia. There are already more over-65s in Asia than there are people in the United States; in the next 25 years, there will be more over-65s in Asia than the populations of the Eurozone and North America combined.

This undeniable MegaTrend has a number of very tangible implications: the ageing of the world’s population will give rise to ever-greater focus on health care provision and de-velopments of new medicines; the shifting influence of the generations will change consumption habits and trends; and the increased population will continue to place pres-sure on our already scarce resources.

1 https://www.un.org/en/development/desa/population/publications/trends/population-prospects.asp

MEGATRENDS - Demographics

In order to accommodate these changes, we will requi-re new technology and innovation in the way we live, communicate, manufacture, transact and consume. In this way, the Demographics MegaTrend is intertwined with all the MegaTrends as outlined below.

1960

Population of the United States(Millions of people)

85+

65 - 69

45 - 49

25 - 29

75 - 79

55 - 59

35 - 39

15 - 19

5 - 9

80 - 84

60 - 64

40 - 44

20 - 24

70 - 74

50 - 54

30 - 34

10 - 14

0 - 4

AgesMale MaleFemale Female

2060

0 5 101015 155 0 5 101015 155

14

MEGATRENDS - Sustainability

2/4 - Sustainability

According to NASA, global temperatures have increased by 1.9*F since 1880, and 18 of the 19 warmest years on record have occurred since 2001 . Meanwhile, satellite data illustrate the shrinking of the polar ice caps, resulting in sea levels which are rising at a rate of over 3mm per year. And at the same time, carbon dioxide levels in the air are at their highest in 650,000 years, attributable in large part to the human desire for agri-culture, deforestation and the burning of fossil fuels. These alarming effects are only likely to be exacerbated by the growing global population unless we can identify more efficient fuels, materials and processes to reduce our impact on the planet.

There is already an established movement in progress to counter these effects, and the drive to make the world more sustainable and environ-mentally friendly is rapidly picking up pace. Increasingly consumers are turning to alternative materials to replace plastic which is resource-intensive and difficult to recycle, and to more efficient fuels and energy sources such as lithium batteries and renewables to replace traditional fossil fuels. The rise in veganism has been largely driven by the effort to reduce our requirement for carbon-heavy agriculture, and governments are more frequently incentivising us to reduce our waste and recycle where possible.

2 https://climate.nasa.gov/

200019601920 198019401900

Glo

ba

l Te

mp

era

ture

(°F

)

CO

2 C

on

cen

tratio

n (p

pm

)

58.5

58.0

57.5

57.0

56.5

Global Temperature and Carbon Dioxide

400

380

360

340

320

300

280

260

15

3/4 - Urbanisation

In 1990 there were only 10 cities in the world with a population excee-ding 10 million – the so-called ‘megacities’. Today the number of worl-dwide megacities has nearly tripled to 28.

In 1950, 30% of the world’s population lived in urban areas, and that’s forecast to increase to 66% by 2050. With the corresponding growth in population over this time, towns and cities as we know them will have to adapt to the changing demands of their citizens. New, smarter cities will also be required to accommodate this expan-ding urban population.

MEGATRENDS - Urbanisation

Transport will become more efficient and will likely invol-ve some level of autonomous driving, and ever-smarter network solutions will be required to keep people and busi-nesses connected and secure.

Moreover, the growing desire of the world’s population to concentrate themselves in cities and large urban areas will further drive technological advancement and impact climate change, therefore having its own influence on other MegaTrends.

1950 1980 2010 20401960 1990 2020 2050

Urban and rural population of the world (1950-2050)

urban

rural

Source: https://esa.un.org/unpd/wup/Publications/Files/WUP2014-Highlights.pdf

7,000

Population (millions)

4,000

6000

3,000

1,000

5,000

2000

0

1970 2000 2030

16

MEGATRENDS - Technology & Innovation

4/4 - Technology & Innovation

Developments in technology are improving our productivity at a faster pace than ever before. Innovations in robotics, artificial intelligence and communications technology are shaking up traditional industries such as retail, manufacturing, agriculture, transport, medicine and finance.

The pace of change is exponential, and machines capable of learning faster than humans will be disruptive: 60% of all occupations could see 30% or more of their constituent activities automated . While this inevitably means that certain jobs will be replaced by machines, it also means that the potential for new and emerging industries and opportunities is greater than ever before. More automated and efficient processes will also have the positive effect of driving down costs, allowing us to afford better products and therefore improving our standards of living.

And increasingly, our world is becoming ever more connected to the ‘Internet of Things’. Our coffee machines and fridges, lighting, central heating and even doorbells will all be controllable from our tablets and smartphones. Gartner estimates that in 2016 the-re were 6 billion ‘things’ connected by the internet; by 2020, that will rise to over 20 billion.

In many ways, the technology & innovation megatrend is both a beneficiary of and driver of all the other megatrends outlined above. If we are to accommodate the shifts in global demo-graphics and urbanisation and manage the ongoing climate change crisis, then continued investment and adoption of these technologies is vital.

3 https://www.mckinsey.com/businessfunctions/digital-mckinsey/our-insights/where-machines-could-replace-humans-andwhere-they-cant-yet 4 https://www.gartner.com/newsroom/id/3598917

Productivity increase through The steam engine

Productivity increase through

Early robotics

Productivity increase through

Information technologyProductivity increase through

Automation

0.3%1850-1910

0.6%1995-2005

0.4%1993-2007

Increasing productivity at the core of technologies

0.8-1.4%2015-2065

17

Underlying Thematic Drivers

Underlying these MegaTrends, a number of sub-themes emerge. We have outlined some of these in the table below, and indicated the MegaTrends we believe support and impact on these themes.

MEGATRENDS - Underlying Thematic Drivers

Improving Health Care; Developments in BioTech;

Shifting Consumer Trends

Search for the cure for cancer

Companies seeking solutions to climate change and its

environmental effects

Efficient vehicles; Alternative fuels; Driverless cars

New technologies required to accommodate increasing global

demand for water

Smart buildings & infrastructure; connected devices; security

Wireless payments; online banking; Blockchain

Growth in consumer and commercial drone use (e.g. agricultu-

re; emergency services; military; real estate; retail delivery).

Oncology

Climate Change

Electric & Autonomous Vehicles

Water

Drones

Ageing Population

Smart Cities

Fintech

SUB-THEME EXAMPLES OF UNDERLYING DRIVERS

MEGATRENDS

De

mo

gra

ph

ics

Su

sta

ina

bili

ty

Urb

an

isa

tio

n

Te

ch. &

Inn

ova

tio

n

01

05

0203 04

06

07 08

OUR THEMES

20

01. Ageing Population

The ageing of the world’s population is widely considered one of the most enduring demographic shifts in human history. Japan is currently the only country in the world where 30% of the population is over the age of 60, but this is forecast to be the case in 55 countries by 2050.

Developments in medicine diagnostics and treatments as well as improvements in quality of life are helping us all live longer. We believe that companies paving the way within the Health Care sector, especially within Biotech, will be the greatest beneficiaries of this permanent and non-cyclical trend.

OUR THEMES - Ageing Population

21

02. Oncology

Worldwide cancer deaths are projected to increase by 72%, from 9.5 million currently to 16.3 million by 2040.

In response, an increasing number of companies are committing capital to cancer research to develop better diagnostics, better technology and better drugs. The first victories are already being achieved, with 83% of survival gains in cancer attributed to new treatments. Advances in treatment have dramatically improved survival rates, but there is still a long way to go.

OUR THEMES - Oncology

5 E. Sun. et al, Journal of Clinical of Oncology, 2008

22

03. Water

Water is an irreplaceable and essential commodity. Population growth, urbanization and water-intensive dietary changes are adding to rising industrial water demand.

Water use has increased 9x since 1900 and is only set to grow further, driven by urbanisation as well as increased industrial and agricultural usage. Implementing solutions to these challen-ges is critical to survival and a pre-requisite for further economic growth.

22

23

04. Electric & Autonomous Vehicles

With some nations now placing tariffs on internal combu-stion engine vehicles, some experts predict that by 2040 we will all be driving electric vehicles . And while the idea of driverless cars might still feel like science fiction, companies such as Daimler expect full production of autonomous vehicles by the early 2020s .

Manufacturers of both electric and autonomous vehicles as well as their components and other companies in the supply chain all stand to be beneficiaries of this paradigm shift.

OUR THEMES - Electric & Autonomous Vehicles

6 https://www.bbc.co.uk/news/business-41268513 7 https://global.handelsblatt.com/companies/daim-lers-driverless-future-673931

24

05. Climate Change

Indications of climate change now hit our headlines on a daily basis: floods, wild fires, tornadoes and hurricanes are all becoming alar-mingly frequent. 18 of the 19 hottest years on record have occurred since 2001 . At the same time, as industrialisation marches onwards, we are not doing enough to reduce the amount of CO2 being relea-sed, plastic being produced or waste being dumped.

The investment opportunity here comes from backing those compa-nies that are mitigating our environmental impact: these companies will be the greatest winners as world leaders, governments, pension funds and individuals alike take up the environmental fight.

OUR THEMES - Climate Change

8 https://www.giss.nasa.gov/research/news/20170118/

25

06. Smart Cities

Cities occupy two per cent of the earth’s surface, but they are home to more than half its population and generate 80 per cent of all economic output.

As their populations swell, cities must find smarter solutions to meet the needs of their residents and improve their quality of life. There is a huge growth opportunity for the companies helping to design,

build, operate and manage cities in a better and more sustainable way.

OUR THEMES - Smart Cities

25

26

07. Fintech

The financial ecosystem is becoming increa-singly digital. Artificial intelligence and big data are disrupting traditional banking and insurance businesses as well as more recent sectors such as online payments and electronic trading.

With these enhancements comes an ever-greater focus on security, and technologies such as blockchain are enhancing processes in finance and beyond. As online payments become main-stream and cash becomes the exception, digital finance will open the way to 2 billion people who currently have little or no management of their financial affairs.

China and India are leading the way here, but digital finance is being adopted globally: the com-panies developing or adopting these technologies stand to benefit most from this trend.

OUR THEMES - Fintech

26

27

08. Drones

Drones and UAVs (unmanned aerial vehicles) were developed by the military, but the technology has now been released to the civilian population. Analogous technologies that were originally controlled by the military include mobile phones, microwaves and GPS: the growth in the UAV market to date suggests drones may be set to follow a similar trajectory. Besides recreational use, the explosion in drone popularity has both industrial and commercial applications which could transform traditional industries as widespread as retail, real estate, agriculture and emergency services.

OUR THEMES - Drones

28

OUR THEMES - Themes Not Selected

Themes Not Selected

Throughout our research, a number of themes emerged which ultimately were not included in our final por-tfolio. Some of these are presented below:

Brands

Robotics & Automation

5G

While we find the case for brands and franchises compelling, many fall into the ‘luxury goods’ space which can be cyclical and therefore prone to disproportionate downside in the event of an economic slowdown. Many of the names in these sectors are also trading at excessive multiples which we do not believe to be sustainable. A better entry point may see us incorpo-

rate this theme into our portfolio.

This is an excellent theme: robotics are undoubtedly transforming industrial processes, and this automation introduces efficiencies which satisfy several of our MegaTrends including Sustainability and Technology & Innovation. However our research suggests that as an investment opportunity, this theme is currently overbought and therefore very expensive. Robotics & Automation remains one to watch closely, and a better entry point may see us

incorporate this theme into our portfolio.

Fifth generation (5G) technology is expected to enable the next level of digitalisation with billions of devices connected to the internet and generating high volumes of data. While we are attracted to this theme, it currently does not offer sufficient investment opportunity

THEME REASON FOR EXCLUDING

29

Cyber Security

Big Data

to constitute a standalone theme. It is captured to an extent by some of our other themes under the demographics and technology MegaTrends.

This is another trend that is certainly picking up pace as consumers become increasingly concerned over data breaches, identity theft and digital security. This trend is captured within our Smart Cities and Fintech themes, but we do not believe it warrants a standalone

allocation within the portfolio.

Improvements in computing power and digital storage capacity have paved the way for a quantum leap in the amount of data that researchers can process and analyse. So-called ‘big data’ is transforming traditional industries such as advertising, banking, health care and retail. In fact, the application of big data is so widespread that we feel it is already incorpo-rated into many of the themes within our portfolio, including Ageing Population, Smart Cities and Fintech, therefore it does not warrant further investment in a theme of its own.

OUR THEMES - Themes Not Selected

01

05

0203 04

OUR SELECTED FUNDS

06

07

08

33

Fund Selection Process

Having identified the most compelling megatrends, the Investment Management team will use a rigorous and disciplined fund selection process to construct a portfolio that expresses these strategic

and tactical views.

Morningstar Universe of

Funds

Performance Screen

Quant Analysis

MegaTrend Relevance

Qualitative Review

PORTFOLIO

The team will select the investments by analysing the Morningstar universe of funds, screening for instruments which have a focus on investing in sectors and regions relevant to our defined megatrends. The team will narrow down the universe on which investment due diligence will be carried out in order to establish appropriate funds for inclusion in the portfolio from an investment perspective. Due diligence will examine factors, including but not limited to, the investment policy and objectives, performance track record, investment strategy and process, as well as the team structure and risk management processes employed by investment managers.

SELECTED FUNDS - Selection Process

34

Both quantitative and qualitative analysis will be considered in the evaluation, selection and on-going monitoring of underlying funds and their investment managers. As part of this analysis the investment management team will, amongst other things, check for any liquidity issues, investment risk issues and the impact of the proposed investments on the portfolio as a whole. The team may seek to benchmark any potential investment under analysis against other opportunities in the marketplace, in order to ascertain the relative merits of the investment opportunity.

Portfolio Construction

The final portfolio was constructed with the objective of gaining as much exposure as possible to our identified Megatrends and their underlying drivers. Weights allocated to each fund were determined partially by our conviction in the theme and partially by our conviction in the fund to represent this theme effectively. In addition to this, a risk management overlay ensured we maintained a balanced portfolio in terms of exposure to sectors, styles, market capitalisations, and that in general a satisfactory balance of risk and reward is maintained in line with the investment objective.

1 .2.3.

Conviction in Theme

Conviction in underlying managers

Portfolio balance & risk management

STEPS:

SELECTED FUNDS - Portfolio Construction

35

The Portfolio

Janus Henderson Global Life Sciences Fund

Invesco Global Consumer Trends

10,0%

7,5%

Pictet SmartCity

First Trust Cloud Computing ETF

15,0%

10,0%

Robeco Global FinTech Equities

First Trust Indxx Innovative Transaction and Process ETF

10,0%

7,5%

Ageing Population

Smart Cities

Fintech

Oncology

Water


Climate Change

Drones

Candriam Equities L Oncology Impact 7,5%

Parvest Aqua 10,0%

Global X Autonomous & Electric Vehicles ETF 5,0%

Nordea 1 Global Climate and Environment Fund 10,0%

ETFMG Drone Economy Strategy ETF 7,5%

THEME FUND POSITION

SELECTED FUNDS - Portfolio

* Sample Portfolio update to 30 September 2019.

36

Ageing Population01Janus Henderson Global Life Sciences Fund This actively managed global health care fund seeks to invest in companies that address unmet medical needs or make the health care system more efficient. The portfolio is balanced across the pharmaceuticals, biote-chnology and services/devices subsectors.

Invesco Global Consumer TrendsShifting demographics are also changing the way we consume: this fund is focused on identifying the trends and companies that are driven by changes in demographics, standards of living and connectivity.

Oncology02Candriam Equities L Oncology ImpactThis fund invests in listed companies that develop and or sell products and services for the treatment of cancer. The universe includes companies whose products make a difference to patients in the diagnosis, profiling and treat-ment of cancer. This includes companies that show innova-tion in surgery, radiation and oncology drugs. The universe ranges from big caps to smaller companies.

SELECTED FUNDS - Funds in detail

37

Water03Parvest Aqua Global equity fund investing in companies that provide technology, products and services relating to the water value chain. This includes water distribution, management, treatment and analysis as well as irrigation.

Electric & Autonomous Vehicles04Global X Autonomous & Electric Vehicles ETFThis ETF seeks to invest in companies involved in the development of autonomous vehicle technology, electric vehicles (“EVs”), and EV components and materials. This includes companies involved in the development of autonomous vehicle software and hardware, as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt.


38

Climate Change 05Nordea 1 Global Climate & Environment FundThe Nordea 1 Global Climate and Environment Fund was launched in 2008 to invest in innovative companies that advance an environmentally sustainable society and gene-rate attractive returns by recognising the research gap in this area.

Smart Cities06Pictet SmartCity Global equity fund investing mainly in companies that con-tribute to the global urbanisation theme or benefit from it. These companies typically operate in mobility & transpor-tation, infrastructure, real estate or sustainable resource management sectors.

First Trust Cloud Computing ETFThis fund tracks the performance of companies actively involved in the cloud computing industry. This may include pure play cloud computing (direct providers such as network hardware/software, storage, cloud computing ser-vices) and non-pure play (companies that provides goods and services in support of cloud computing technology). a supporto della tecnologia di cloud computing).


39

Fintech07Robeco Global FinTech EquitiesThis actively managed fund aims to profit from the abundant opportunities stemming from the digitization of the financial sector. In constructing their portfolio, the team seek to find balance across 3 segments: Winners (stable, well-established companies that already stand out from their peers); Enablers (companies that help the financial industry to develop and implement technology); and Challengers (younger, less establi-shed companies that have the potential to become tomorrow’s winners). The team apply fundamental analysis and a proprie-tary valuation framework to select stocks with good earnings prospects and a reasonable valuation. Companies are indivi-dually assessed on the basis of industry trend analysis alongsi-de in-depth discussions with corporate management, analysts and industry experts.

First Trust Indxx Innovative Transaction and Process ETFThis ETF provides exposure to companies across the global that are actively using, investing in, developing, or have pro-ducts that are poised to benefit from blockchain technology. Eligible securities are classified into 3 categories: Enablers (actively developing blockchain technology); Users (using blockchain technology); and Explorers (companies exploring the incorporation of blockchain technology into their business).

Drones08ETFMG Drone Economy Strategy ETF This strategy seeks to capture the growth opportunity in drone flight, and invests in manufacturers of drones and drone components, as well as those companies and industries best positioned to benefit from this new tech-nology.


40

SELECTED FUNDS - Fund Manager Biographies

Ageing Population01Janus Henderson Global Life Sciences Fund Andy Acker, CFA is the Portfolio Manager responsible for managing Janus Henderson’s Global Life Sciences and Bio-technology strategies since 2007 and 2018, respectively. He also leads the firm’s Health Care Sector Research Team. Andy was assistant portfolio manager on the Global Life Sciences strategy from 2003 to 2007. He joined Janus in 1999 as a research analyst focused on companies in the biotechnology and pharmaceutical industries. Prior to this, he worked as a strategy consultant for the Boston Consul-ting Group and as a health care analyst for Morgan Stanley Venture Partners. Andy received his bachelor of science degree in biochemical sciences from Harvard University, graduating magna cum laude and Phi Beta Kappa. He also earned an MBA with honours from Harvard Business Scho-ol. Andy holds the Chartered Financial Analyst designation and has 23 years of financial industry experience.

Invesco Global Consumer TrendsIdo Cohen has been lead Portfolio Manager on this fund since 2011. Ido graduated from University of Pennsylvania

40

41


Oncology02Candriam Equities L Oncology ImpactRudi Van Den Eynde, Head of Thematic Global Equity Management at Candriam since 2011, is lead PM on the Oncology Impact fund. Rudi’s career started in 1987 in the euro bonds department of Dexia Bank Belgium. He spent 11 years with the company in a variety of roles including 4 years as a currency trader and later as an institutional portfolio manager. In 1998 he joined Candriam as a senior equity fund manager and became Head of thematic global equity management in 2012. Rudi has a BSc degree in medicine from the University of Antwerp in Belgium.

and has over 20 years’ investment experience. Ido spe-cialises in the coverage of large-cap consumer, internet, media and telecommunications companies.

Juan Hartsfield, CFA is co-Portfolio Manager. Juan gradua-ted from University of Texas and also holds an M.B.A. from University of Michigan. Juan focuses his sector coverage on small-cap consumer, homebuilders, hotels, restaurants and retail.

Water03Parvest Aqua

The Parvest Aqua Fund is co-managed by Hubert Aarts and Bruce Jenkyn-Jones who have 27 and 26 years’ investment experience, respectively. Hubert and Bruce have both been involved in the management of the Aqua fund since its inception in 2015.

Hubert is an Executive Director and Co-Head of Listed Equity along with Bruce Jenkyn-Jones. Hubert also leads Impax's macro-economic research process. Hubert started his career in the investment industry in 1990 and joined Impax in January 2007. He has extensive experience investing in Pan-European equities as a portfolio manager at MeesPierson and Merrill Lynch Investment Managers, where he chaired the European Sector Strategy Group. Hubert joined Impax from Cambrian Capital Partners LLP where he was a partner and portfolio manager of the Curalium fund, and Incremental Leveraged hedge funds. Hubert has a Master's degree in Economics and Business Administration from Maastricht University.

Bruce joined Impax in July 1999 and serves as Co-Head of Listed Equity along with Hubert Aarts. Bruce joined

42


Smart Cities06Pictet SmartCity The Pictet SmartCity fund is managed by Ivo Weinöhrl, Senior Investment Manager, and Lucia Macaccaro, Investment Manager, who both joined Pictet Asset Management in 2016.

Before joining Pictet, Ivo worked at DWS / Deutsche Asset Management where he held joint responsibility for the DWS Top Dividende fund. Ivo's investment ma-nagement career at DWS also included being the lead manager for a global value fund and managing US equity funds – including a high dividend strategy. Ivo holds a

Climate Change 05

Impax in 1999 where he worked initially on venture capital investments before developing the listed equity business. Before joining Impax, Bruce worked as a utilities analyst at Bankers Trust and as an environmental consultant for Environmental Resources Management (ERM). Bruce has an MBA from IESE (Barcelona), an MSc in Environmental Technology from Imperial College and a degree in Chemistry from Oxford University.

Nordea 1 Global Climate & Environment FundThe fund is managed by two portfolio managers, Thomas Sørensen and Henning Padberg.

Thomas Sørensen has been the portfolio manager of the Nordea 1 Global Climate and Environment Fund since its launch in 2008. Thomas began his career in 1997 with Nordea. In 1999, he joined the Asset Management division and has undertaken a number of portfolio mana-gement and research responsibilities. Today, he is also responsible for the Commodities Super Sector research globally and part of the European Focus equity team. He holds a BSc. Finance from Copenhagen Business School.

Henning Padberg has been the portfolio manager of the Nordea 1 Global Climate and Environment Fund since 2009. He began his career in 2008 with Nordea Asset Management as a research associate focusing on the financial sector globally. In 2011 Henning became respon-sible for the IT sector research globally and in 2014 he also became responsible for the Cyclical Super Sector research globally. Henning holds a MSc. in Business Ma-nagement from the University of Münster, Germany.

43

Diplom-Kaufmann in Business Administration & Electrical Engineering from the Technical University of Munich and is a CFA charterholder.

Lucia Macaccaro joined the graduate program in Pictet Asset Management in 2016, based in both the Geneva and London offices. At the end of the program, she joined the Thematic Equities team as an Investment Manager. Lucia holds a Bachelor and a Master Degree in Finance from Bocconi University and is a CFA level 3 candidate.


Fintech07

from October 2003 to December 2007. He started his investment career in 1993. Patrick holds a Master’s in Business Economics from Erasmus University Rotterdam and is a CEFA charterholder.Jeroen van Oerle is also co-PM on Robeco’s Global FinTech Equities fund. Jeroen researches multiple invest-ment trends with a focus on the financial sector. He joi-ned Robeco in 2013, and he is also vice-chairman of the board at the UK-based FinTech company, M3 Holdings. He holds a master’s in Financial Economics from Erasmus University Rotterdam and is a CFA charterholder.

Robeco Global Fintech Equities Robeco Global Fintech Equities is co-managed by Patrick Lemmens and Jeroen van Oerle. They are part of the Finance-Fintech portfolio management team which sits within Robeco’s Trends Equities team situated in Rotterdam, the Netherlands.

Patrick Lemmens is co-PM on Robeco’s Global FinTech Equities fund, and has also been lead manager on their New World Financial Equities fund since 2012. Prior to joining Robeco in 2008, Patrick was Global Financials Analyst at ABN AMRO and managed their Financials fund

45

PORTFOLIO ANALYSIS

46

PORTFOLIO CONSTITUENTS

Pictet SmartCity I EUR 15.00

Janus Henderson Glb Life Scn I USD Acc 10.00

First Trust Cloud Computing ETF A USD 10.00

Robeco Global FinTech Equities I € 10.00

Parvest Aqua I C 10.00

Nordea 1 - Global Climate & Envir BI EUR 10.00

Candriam Eqs L Onclgy Impct I USD Cap 7.50

First Trust IndxxInnvtvTrsctn&PrcssETFA$ 7.50

Invesco Global Consumer Trnds C EUR Acc 7.50

ETFMG Drone Economy Strategy ETF 7.50

Global X Atnms & Elctrc Vhcls ETF 5.00

8

10

11

7

9

4

6

3

5

2

1

%

PORTFOLIO ANALYSIS

Portfolio overviewPortfolio Constituents


Stock

Cash

Bond

+99.20%

0.80% 0.00%

0

10

40

20

50

80

30

60

90

70

100

47

Deep value

Core value

Blend Core growth

High growth

Mic

roS

ma

llM

idLa

rge

Gia

nt

Portfolio Portfolio Constituents Benchmark

Equity Style Box

21

8

6

9 3

4

11

7

105

PORTFOLIO CONSTITUENTS* * Sample Portfolio update to 30 September 2019.

1 Pictet SmartCity I EUR2 Janus Henderson Glb Life Scn I USD Acc3 First Trust Cloud Computing ETF A USD

4 Robeco Global FinTech Equities I €5 Parvest Aqua I C6 Nordea 1 - Global Climate & Envir BI EUR

10 ETFMG Drone Economy Strategy ETF11 Global X Atnms & Elctrc Vhcls ETF

7 Candriam Eqs L Onclgy Impct I USD Cap8 First Trust IndxxInnvtvTrsctn&PrcssETFA$9 Invesco Global Consumer Trnds C EUR Acc

STYLE BREAKDOWN % PORTFOLIO*

Large Value 9.84

Large Core 21.27

Large Growth 27.58

Mid Value 5.80

Mid Core 9.34

Mid Growth 14.02

Small Value 2.22

Small Core 4.07

Small Growth 5.86

Large Cap 58.70

Mid-Small Cap 41.30

Value 17.86

Core 34.68

Growth 47.46

PORTFOLIO ANALYSIS

48

WORLD REGION BREAKDOWN

% PORTAFOGLIO*

Americas 65.87

North America 65.33

Latin America 0.53

Emea 21.81

United Kingdom 4.35

Europe Developed 16.50

Europe Emerging 0.77

Africa/Middle East 0.18

Greater Asia 12.32

Japan 4.32

Australasia 0.51

Asia Developed 3.30

Asia Emerging 4.19


PORTFOLIO ANALYSIS

The portfolio has a macro exposure focused mainly on Americas, ca. 65% of total asset, especially on North America.The exposure on EMEA area is ca. 22%, focused mainly on Europa Developed.The exposure on Asia is currently low and equally shared among Japan, Asia Developed and Asia Emerging.

Equity component

WORLD REGION BREAKDOWN

22EMEA

22%

12ASIA

12%65NORTH

AMERICA

65%

49

EQUITY SECTOR BREAKDOWN

% PORTFOLIO*

Cyclical 29.21

Basic Matls 4.22

Cons Cyclical 10.84

Financial Svcs 10.79

Real Estate 3.37

Sensitive 47.73

Comm Svcs 1.35

Energy 0.00

Industrials 17.63

Technology 28.75

Defensive 23.06

Cons Defensive 0.95

Healthcare 18.88

Utilities 3.23


PORTFOLIO ANALYSIS

Sector by sector, the main exposure is on equities belonging to the Tech industry, followed by Healthcare and Industrials.

It should be noted that ca. 23% of the portfolio has a defensive component (exposure on Healthcare, Consum-er Defensive and Utilities).

A livello settoriale, l’esposizione più importante è verso i titoli appartenenti al settore Tecnologico seguito da Healthcare e Industrials.

Da notare che circa il 23% del portafoglio ha una com-ponente difensiva (esposizione a Healthcare, Consumer Defensive e Utilities).

Equity component

EQUITY COMPONENT

17INDUSTRIALS17%

19HEALTHCARE

19%28

TECHNOLOGY

28%

50

3.000.00

-1.00

2.00

5.00

8.00

11.00

14.00

17.00

20.00

23.00

26.00

12.00 21.006.00 15.00 24.00

*where the 3-year data was not available, the "return from inception date" data was used.

9.00 18.00

3 Yr Std Deviation %

3 Y

r Tota

l Re

turn

%

Risk-Return

1 Pictet SmartCity I EUR2 Janus Henderson Glb Life Scn I USD Acc3 First Trust Cloud Computing ETF A USD

4 Robeco Global FinTech Equities I €5 Parvest Aqua I C6 Nordea 1 - Global Climate & Envir BI EUR

10 ETFMG Drone Economy Strategy ETF11 Global X Atnms & Elctrc Vhcls ETF

7 Candriam Eqs L Onclgy Impct I USD Cap8 First Trust IndxxInnvtvTrsctn&PrcssETFA$9 Invesco Global Consumer Trnds C EUR Acc

PORTFOLIO CONSTITUENTS* ** Sample Portfolio update to 30 September 2019.

PORTFOLIO ANALYSIS

1

10

79

11

6

3

4

25

8

Portfolio Portfolio Constituents Benchmark

51

STATISTICS 1 Y 3 Y 5Y

Relative Statistics

Beta 1.12 1.08 1.09

Up Capture Ratio 113.43 109.05 111.56

Down Capture Ratio 109.82 91.72 104.38

Risk Statistics

Standard Deviation 18.42 12.17 13.49

Sharpe Ratio 0.61 1.16 0.96

Sortino Ratio 0.92 1.92 1.53

Worst Month -8.80 -8.80 -8.80

Max Drawdown -14.26 -14.26 -14.26

PORTFOLIO ANALYSIS

From a statistical standpoint, the portfolio shows a potential to protect the capital among periods of elevated negative volatility, especially in the medium and long-term.

The Shape and Sortino index also show a potential to reach attractive returns once the risk adjustment is settled.

In the last three and five years the Shape Ratio equaled to 0,96. The same data emerges considering only the downside volatility. The Sortino index equaled to 1,92 in three years and 1.53 in five years. This shows the port-folio’s potential protection when called upon.

High market negative volatility

HIGH VOLATILITY

EFFECTIVE CAPITAL DEFENSE

Statistics

52

2013 20172015 20192014 20182016

31

0

93

62

124

155

Tota

l Re

turn

%

Portfolio MSCI World Index

Cumulative return

PORTFOLIO ANALYSIS

53m

ar-14

mar

-15

mar

-16

mar

-17

mar

-18

mar

-19

giu-14

giu-15

giu-16

giu-17

giu-18

set-1

4

set-1

5

set-1

6

set-1

7

set-1

8

dic-14

dic-15

dic-16

dic-17

dic-18

80

90

100

110

120

140

160

180

200

220

240

270

130

150

170

190

210

230

260

250

280

290

Blockchain

Consumer Trends

Fintech Smart Cities

Climate changes

DronesOncology

Health Care

MSCI WorldWater

Cloud Computing


PORTFOLIO ANALYSIS

Thematic Portfolios vs MSCI World

[email protected]

Fineco Asset Management D.A.C.One CustomHouse Plaza, IFSC, D1, Dublin, Ireland

FAM Megatrends is a sub fund for FAM Evolution ICAV, a UCITS Fund with segmented liability between sub funds.

Fineco Asset Management D.A.C is part of the FinecoBank Group.

Fineco Asset Management D.A.C. is regulated by the Central Bank of Ireland.

FAM Megatrends is a sub fund for FAM Evolution ICAV, a UCITS Fund with segmented liability between sub funds. Fineco Asset Management D.A.C is part of the FinecoBank Group.FAM Megatrends is a sub fund for FAM Evolution ICAV, a UCITS Fund with segmented liability between sub funds. Fineco Asset Management D.A.C is part of the FinecoBank Group.

fam megatrends is a sub fund for fam evolution icav, a ... · cities 7,1% fintech 8,2% ageing...

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