Generali Investments SICAV SRI Ageing Population

Transform a major trend into an investment opportunity

  • Key Features
  • Benefits from a thematic investment approach focusing on the “grey power” and companies exposed to this demographic shift, expected to generate above than average returns over the mid to long term
  • Invests in a portfolio of European stocks with exposure to the theme in Europe but also globally
  • Invest in a 100% SRI compliant strategy, with companies identified through Sycomore AM’s proprietary ESG methodology
  • Performance of the sub-fund
As of 19 June, 2020
MTD
YTD
1y
3ys
5ys
Sub-fund (Eur BX Acc.)
3.31%
-9.91%
-1.03%
1.95%
n/a
Comparison Index
4.51%
-11.61%
-4,10%
0.18%

Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. No express or implied liability or guarantee is assumed that the future performance will correspond to the performance described above. The value of and income from fund units or sub-fund units (“Units”) may fluctuate, rise or fall, so you may have a gain or a loss when the Units are sold. The performance of and income from the Units have to be reduced by costs and taxes. Current performance may be higher or lower than the quoted and no guarantee can be assumed that the investment objectives of the fund/sub-fund will be achieved.

Fund Facts
Management Company and Investments Manager
The Management company is Generali Investments Luxembourg S.A. who appointed Sycomore Asset Management as the investment manager.
Fund Manager
Olivier Cassé and Giulia Culot
AUM
€594.5 mln (31 May,2020)
Structure
UCITS
Domicile
Luxembourg
Inception date
October 12th, 2015
Share Class
BX EUR Acc.
ISIN
LU1234787205
Internal comparison index
MSCI Europe Net Total Return Index (No official benchmark)
Management fees
0.35%
Performance fees
Not applied
  • Fund Manager Comment

End of May, 2020

In May, the European markets extended their rally (+3% for the MSCI Europe TR index) thanks to the indicators reflecting the gradual economic recovery and the perspective of easing restrictions on people and business all around the globe. 

In that environment, Energy was the only sector to close the month into negative territory. Similarly to April, the best performers were a mix of growth and cyclical industries such as Industrials / Technology at +7% and Materials / Utilities at +6%.

In this context, with a total return at around 3% over the month, the sub-fund displayed a performance in line with the one delivered by the whole European market (when compared with the one achieved by the MSCI Europe TR) with similar rebounds of the three investment pillars (Healthcare, Pensions & Savings and Consumers). 

  • The HEALTHCARE pillar (up c. 3% in April) continued to post robust performances, being considered as relatively immune or even positively impacted by the covid19 outbreak. However, the drivers of this performance were significantly different from the ones that moved the sector positively in the last two months, illustrating the premise of a style rotation. Indeed, the Pharmaceuticals segment levelled off (Roche, AstraZeneca and Merck Kgaa closed the month down 1% and 2%) while the Medical Equipment & Services took the lead with players in Diagnostics (such as Siemens Healthineers and bioMérieux, respectively up 16% and 14%) and Sonova, up 19%. Investors expressed their confidence after the Swiss leader in Hearing Aids had posted sales that were more resilient than expected and had detailed some initiatives to manage costs in an efficient manner in the lockdown period.
  • The PENSION & SAVINGS pillar (up circa 3% as well) gained ground, supported by the recovery momentum in financial markets. Logically, the sub-industries of Asset Management and Private Banking were the top contributors, with Anima, Amundi and Julius Baer (resp. up 25%, 10% and 9%). On the opposite, the Life Insurance segment weighed on the absolute performance with Prudential (down 10%, due to its exposure to Hong-Kong and the consequences of the subsequent Chinese security law) and UK names such as L&G, down 6% due to Brexit negotiations.
  • The CONSUMERS pillar witnessed mixed trends with strong rebound in cyclical stocks alongside weak moves in the defensive space. Regarding the former, the luxury segment contributed positively with LVMH and Burberry among the best contributors. Trigano, the French leader in motorhomes, may be one short-term and medium-term winner of the consumer desire to keep social distancing in holidays and gained 22%. Companies that operates in Automation (i.e. long term beneficiaries of a declining working population) were supported by the medium term consequences of the covid19 crisis through European incentives to re-shore production. Schneider, Dassault Systemes and Siemens rose 10%, 15% and 16% respectively. On the opposite, players in Personal Care such as L’Oreal, Ontex and Beiersdorf lingered in May after decent performances during the March-April sell-off.

The most relevant contributors in May were as follows:

  • Positive: Dassault Systemes, Anima, Siemens healthineers, Trigano, Siemens
  • Negative: Prudential, Ontex, Scor, Lagardere, Roche

 

Portfolio Activity

Over the period, some positions that had benefited from their defensive profile in this uncertain environment or companies that were seen as clear winners of the coronavirus pandemic were cut, such as bioMerieux, Grandvision and Astrazeneca. Moreover, because this crisis is leading to “cash burn” situation for hotels amid a slow occupancy upturn, we decided to reduce our exposure to the industry with transactions on Melia, Intercontinental Hotels Group and Accor. 

In return, we reinforced some growth stories such as Sonova / Air Liquide and undervalued companies such as Trigano / Julius Baer. In addition, we initiated a new line in FinecoBank, a brokerage and banking platform in Italy that offers financial solutions to clients who want to complement their basic pensions.

At the end of May, the respective weightings of Consumers, Healthcare and Pension & Savings stood at respectively 47%, 34% and 19%.

Outlook 

Ageing population is a structural growth theme supporting above average returns over time. Businesses within our investment pillars of Healthcare, Pension & Savings and Consumers are expected to grow faster than global GDP over the coming years and to show lower cyclicality. Examples include travel & leisure, asset management, oncology, incontinence, anti-ageing cosmetics, vitamins and dietary supplements.

 
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