Generali Investments SICAV SRI Ageing Population
Transform a major trend into an investment opportunity
As of 31 August, 2020
Sub-fund (Eur BX Acc.)
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.
Management Company and Investments Manager
The Management company is Generali Investments Luxembourg S.A. who appointed Sycomore Asset Management as the investment manager.
Olivier Cassé and Giulia Culot
€469.82 mln (31 August, 2020)
October 12th, 2015
BX EUR Acc.
Internal comparison index
MSCI Europe Net Total Return Index (No official benchmark)
End of August, 2020
After a break in July, European equities markets resumed their gains in August (+3% for the broad MSCI Europe index) in a supportive environment fueled by earnings releases beating analysts’ expectations, liquidity injections from central banks and the easing of lockdown restrictions worldwide. This backdrop helped the most cyclical sectors such as Consumer Discretionary, Industrials and Materials to outperform the defensive ones ie. Utilities, Healthcare, Consumer Staples.
In this context, the main drivers of performance in August for GIS SRI Ageing Population were the Pensions & Savings and Consumers investment pillars. In the meantime, the Healthcare pillar lost ground, mainly affected by the style rotation.
The Consumers pillar’s monthly return (at circa +5%) were supported by the outperformance of cyclical names, particularly in the Travel & Leisure sub-segment. Accor and Intercontinental Hotels Group were among the top performers, respectively up 26% and 21%, following a French press report mentioning that Accor is mulling a bid for IHG. Other companies in the sub-segment also contributed positively with Easyjet, Melia and Trigano, respectively up 29%, 12% and 10%. Illustrating investors’ hope in tourism recovery and strong figures from the Chinese demand, the Luxury groups performed well with Burberry, LVMH and Compagnie Financiere Richemont, up 16%, 7% and 6%. In the defensives space, investors were more reluctant to hold their positions; as such, l’Oréal, Beiersdorf and Unilever stalled over the month, but remain outperformers since the beginning of the Covid-19 crisis. In that segment, players in Nutrition were outliers and they have continued to rise (DSM and Symrise up 4% and 9%).
The Pensions & savings pillar contributed positively in August (up circa 4%) thanks to positive returns posted by both sub-segments Life Insurers and Asset Managers / Gatherers. Within the former, Prudential gained 12% and was the top performer thanks to the confirmation of its US subsidiary Jackson minority IPO or demerger in 2021. This transaction reassured investors about the future risk profile of PRU and its focus on Asian operations (composed of markets with sound growth prospects due to their low penetration of protection products). Within the latter, Julius Baer posted an 8% gain following strong results underpinned by robust clients’ activities and cost savings measures initiated by the new top management since end-2019.
The Healthcare investment pillar was the only one to fall in August. The Medical Equipment & Services sub-segment weighed on the pillar’s performance. After having delivered strong double-digit gain since the beginning of the year, players in Imaging and Diagnostics were the main detractors over the month. Siemens Healthineers, Philips and bioMerieux lost respectively 13%, 10% and 8%. The German medical equipment manufacturer suffered from the announcement of Varian acquisition, a $16bn deal that would place the NewCo as the global leader in radiotherapy, Imaging and #3 player in Diagnostics. However, investors negatively reacted to this accretive deal due to Varian’s valuation, the reimbursement landscape in US and a looming capital increase to partially fund the transaction. On the opposite, the Pharmaceuticals sub-segment delivered a positive return, helped by Ipsen and Merck Kgaa performances (+6% and +5% respectively) that contrasted with the broad sector behavior in August (affected by style rotation and profit taking in names with double-digit year-to-date gains such as Roche, AstraZeneca and Novo Nordisk).
The most relevant contributors in August were as follows:
- Positive: Intercontinental Hotels Group, Burberry, Symrise, Prudential and LVMH
- Negative: Philips, Siemens Healthineers, Beiersdorf, Orpea and Korian
Over the period, we completed the disposals of Elis (excessive financial leverage according to us) and GrandVision (limited upside and potential risk around the EssilorLuxottica bid) and slightly cut our exposure to AstraZeneca, Straumann and Novo Nordisk.
At the end of August, the respective weightings of Consumers, Healthcare and Pension & Savings stood at respectively 48%, 31% and 21%.
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.