Endowus has selected the fund for its:
Fund Objective: Seeks to maximise total return by investing primarily in companies engaged in any activity forming part of the food and agriculture value chain globally.
Suitability: Investors who seek to maximise total return by investing in equity securities of companies engaged in activity forming part of the food and agriculture value chain worldwide, and are willing to adopt capital and income risk.
Fund Inception: 9 February 2010
Share Class Inception: 4 October 2012
Benchmark: MSCI All Country World Index
Fund AUM: SGD 454m
Source: MorningStar as of 23 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.
Endowus has selected the Fund because firstly, it has theme clarity as well as sub-theme diversification. The BlackRock Thematic Research and Investment Group is responsible for formulating the theme, and in order to identify themes, a number of criteria needs to be met: (a) the identified theme needs to be linked to megatrends; (b) there needs to be convergence of the regulatory, societal and economic forces; (c) the theme needs to be long term rather than faddish; and (d) the theme needs to be investable through global equity markets.
The Fund invests broadly in three trends across the supply chain, namely eating trend, buying trend and growing trend, and there are regulatory, societal and economic forces that support the structural growth of these trends. The proprietary investment universe based on theme exposure includes more than 600 names, and there are multiple sub-themes within each trend to ensure enough name-level and sub-theme-level diversification. It is an actively managed fund and the typical number of holdings is 30-60.
We like how the team structures the portfolio using three buckets — Core holdings (60-70% of NAV), Cyclicals & turnarounds (20-30% NAV), New markets and disruptors (5-15% of NAV). The Core holdings are established companies with structural growth related to nutrition, cyclicals & turnarounds are commodity — like products where cyclical factors outweigh structural ones, and new markets and disruptors are new industries or product categories that disrupt established markets. This portfolio construction structure, together with the focus on bottom-up fundamental analysis, gives the portfolio a quality bias while at the same time flexibility to invest in the most exciting names in the nutrition space.
Finally, the Fund is a sustainable thematic fund. It has >70% of its holdings which contribute to seven of the United Nations Sustainable Development Goals ("SDGs" 2, 3, 9, 12, 13, 14 and 15). ESG considerations are also an integral part of the investment process. The Fund is classified as Article 9 under the EU Sustainable Finance Disclosure Requirement (SFDR), and has also received FebelFin and French SRI labels.
Investors should take note that the Fund has a slight European overweight and bias towards consumer sectors. Investing solely in this Fund involves taking on concentrated sectoral risk, and we recommend investors to use this as a satellite allocation and diversify your holding with exposure to other sectors, themes and asset classes.
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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