After an extremely tumultuous year of 2021 in the financial markets, the 2022 financial year promises to be even more complex. “The investment climate seems to be getting darker and darker,” Frederick Rollins, an investment strategy adviser at Pickett AM, noted in a note in mid-May. Related lockdowns are hitting all of China, stunting growth. ” As we close these pages, the Paris market’s flagship index, the CAC 40, lost 12%, the MSCI All Countries World Index, the international market reflection, 16%, and the Nasdaq, an American technology stock index, fell 25% …
Admittedly, the year is not over, but these bad statistics remind us that financial market growth is never regular and therefore needs to be invested in the stock market in the long run. This is even more valid when choosing thematic funds. In fact, these products are built on a very long-term megatrend that structurally transforms society, such as population, urbanization, digitization of the economy … Based on this information, management companies identify committed investment themes, as they probably benefit from above-average growth. . Here are 5 themes to use in the future, on a small scale, to diversify your portfolio.
1 / Banking on the future of the web with metavers
We’ve been hearing about this for six months, yet the idea is not new. Metaverse is a virtual universe immersed in the world of video games. “This is a normal evolution of the Internet, where experiences will become more immersive, instantaneous and 3D,” explained Pauline Landrick, Axa IM’s manager. A utopia? Not for Bloomberg Intelligence, which estimates the market at 500 500 billion and predicts an average growth of about 12% per year by 2024. There are several index funds (ETFs) on this theme, which are listed in the United States and Canada. Recently, management company Axa IM launched Axa WF Metaverse Fund with a solid portfolio of 40 to 60 stocks. Managers target several sub-themes: video games, social networks, but also work.
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“We are interested in immersive and collaborative work environments, on the one hand, and the use of metavers in industry, especially for the design of prototypes, in detail, Pauline Llandric. What’s the potential for targeting some players with lesser caps and unrelated to the sector, citing the manager as an example?
2 / Climate change: Excess of funds
In 2015, during the Paris Agreement, 196 countries pledged to limit global warming to below 2 degrees Celsius above pre-industrial levels. To fulfill this purpose, there is a lot of need. So states release significant funds for environmental change, such as the European Green Deal. A huge project where money is involved, capitalizing on key companies to transform energy The frenzy is such that global, climate-focused funds doubled their wealth last year, reaching $ 408 billion, according to Morningstar. The offer is plentiful. Financial data providers explain that there are different types of funds in this universe.
Among them, “low carbon” products, which target companies whose activity is low in CO2 emissions. Advocates of other media companies whose products and services contribute to energy change. These include Pictet Global Environmental Opportunities (Pictet AM), Mirova Global Climate Ambition Equity Fund (Mirova) and Candriam Sustainable Equity Climate Action Fund (Candriam). The latter can work on renewable energy, but also on energy saving and efficiency, electric vehicles, etc. It interferes across the value chain from manufacturing to recycling. After a 40% performance in 2020, then a 24% performance in 2021, the fund has declined 21% since the beginning of the year. There is also a range of index funds (ETFs) attached to the Paris Agreement. To claim this name (the fund’s name includes the term “PAB” for the Paris-linked benchmark), these funds must have at least 50% less carbon footprint than their investment universe in the first year and then achieve a goal of at least 7% decarbonization per year. .
3 / Wellness: A theme with multiple approaches
Although environmental and technological themes have been on the rise for several years, the issue of well-being has recently emerged. According to manager Allianz GI, this market is growing twice as fast as the economy. The term covers many areas of activity, including physical activity, healthy eating and nutrition, medicine, fitness tourism … so managers’ methods can take many forms. : Allianz GI offers a sports and fitness fund, which consists of 3 pillars: sports and fitness (clothing, equipment, sports club); Food and nutrition; Sports, leisure and recreation. But other managers suggest a more targeted approach.
At Pictet AM, there is a Pictet Nutrition Fund, which focuses on tomorrow’s meals, or a Pictet Human Fund, which aims to find a fulfilling life through leisure, education and care. More original, the management company Triodos IM has just launched a product focused on the welfare and development of children. Another potential dimension: being good at work, for example Psychomore Europe Happy 8 Work (from Psychomore AM).
4 / Hydrogen, a key element in energy conversion
Why are you interested in hydrogen? Because this gas, which can be stored and transported, is at the center of energy change. Some see it as fuel for the future. Although today it is mainly produced from fossil fuels, new production techniques make it possible to produce “green” hydrogen, which emits little greenhouse gases. France has also developed a national strategy for the development of carbon-free hydrogen, which will be supported by financial assistance of 7 billion euros by 2030. The European Commission also has great ambitions in this regard. The subject is still recent and there are some products to bet on this trend. L&G Hydrogen Economy UCITS ETF or BNP Paribas Easy ECPI Global ESG Hydrogen Economy UCITS ETF. The management company CPR AMO has launched a strategy on hydrogen, within the framework of an active management fund, CPR Invest Hydrogen.
“We cover the entire hydrogen value chain, from upstream to downstream, with the production of green energy, the last customer,” explained Emanuel Sen, the fund’s manager at the launch. More specifically, the manager integrates four dimensions into the fund: green energy production (wind power, solar panels, etc.); Hydrogen-related technologies (electrolyzers, fuel cells, etc.) and components; Hydrogen production, storage and distribution; And end use through chips, cars or certain industrial companies … These funds present sectoral (industrial, energy, materials …) and geographical biases for Europe and Asia.
5 / Digitization, still topical
Tech stocks have risen in recent years, but have been hit hard since January. The theme of digitization still retains all its appeal, as the process seems inevitable. It can cover a variety of sub-themes, as managers have refined their approach. Thus, Pictet AM emphasizes the need for IT security through its Pictet Security Fund. The Pléiade AM Store has launched a special strategy on B2B cloud companies (PAM Cloud Revolution). Cloud “benefits from the acceleration of digitalisation of companies, still in its infancy”, the management company estimates. Other interesting proposals: Echiquier Artificial Intelligence Fund, which invests in companies participating in or benefiting from the development of artificial intelligence.
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Sensitive spirits refrain: the performance of the fund is yo-ying: + 79% in 2020, + 8% in 2021 but – 44% since the beginning of 2022! Finally, Edmund D. Rothschild AM offers a large data solution with a protective profile, relying on the transformation of some business models associated with the widespread use of data.
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