Endowus has selected the Fund because it benefits from
Fund Objective: Aims to achieve long term capital growth by investing primarily in companies that provide products or services on a subscription basis with an attractive risk-return profile driven by secular trends.
Suitability: Investors who are looking for exposure to equity markets on a global basis, are interested in investing in a responsible thematic fund, are looking for a relatively concentrated portfolio, can afford to set aside capital for at least 5 years, can accept significant temporary losses and can tolerate volatility.
Fund Inception: 23 December 2019
Share Class Inception: 9 December 2020
Benchmark: MSCI All Country World Index
Fund AUM: SGD 329m
Source: MorningStar as of 22 July 2021. Please refer to the FMC page for the most updated AUM.
Source: MorningStar as of 31 May 2021. Allocation data indicate actual exposure as a percentage of the Fund's total Net Asset Value. Please refer to the Fund Manager Page for the most updated information on Fund Holdings and Breakdown.
Thematics Asset Management (“Thematics AM”) is a dedicated equity manager in innovative thematic strategy. It was founded in 2019 by 6 partners, 5 of which are experienced portfolio managers who managed a range of successful thematic strategies in Pictet Asset Management. For example, Nolan Hoffmeyer, the lead portfolio manager for Thematics Safety Fund, co-managed Pictet Digital Fund and delivered a superior track record before he co-founded Thematics AM.
Thematics AM’s overarching approach to theme definition is clear with a strong investment intuition — they start by understanding the primary forces behind different secular growth trends, and identify the most attractive opportunities where multiple forces converge and reinforce one another to give rise to a theme. The themes they identify:
In identifying the theme exposure of individual funds, they would assess materiality in terms of earning sensitivity as well as the leadership position the company has in that specific area.
In terms of the Subscription Economy theme, it covers:
The investment universe is diverse enough with 250-300 names, and there is room for growth as technology continues to evolve to allow easier subscription and better customisation and more consumers shift their preferences to a subscription model due to the improved convenience and affordability.
The investment team adopts a bottom up and high conviction investment process that is ESG integrated. They assess management capability, execution risk, the company’s competitive position, trading risks and a range of additional financial, non-financial and ESG considerations to value the business and set a risk-adjusted target price. While the Fund does not target sustainable investments, it promotes it and part of its investments are in companies with sustainable objectives.
The Fund is more defensive in nature as companies with a subscription model have higher visibility to its cash flow and less cyclicality. However, the Fund would underperform if there is a rotation to cyclical stocks. It also has a bias towards mid-cap and small-cap stocks, and towards growth style compared to the MSCI AC World Index.
Investors should be aware that thematic strategies can be narrower in scope than traditional funds that are exposed to the broader market. Hence a thematic fund will be more suited as a satellite strategy than a core part of an investor’s portfolio.
Updated by Endowus: July 2021
** Disclaimer: Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Any opinions expressed reflect a judgment at the original date of publication by us and are subject to change without notice.
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