Fund Rationale: Thematics Meta Fund

Thematics Meta Fund  (the “Fund”)
SGD Class R/A Accumulation Shares (ISIN: LU2125909593)
Fund Manager Page
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Endowus has selected the Fund because it benefits from: 

  • Thematics AM’s specialisation in thematic investing and its portfolio managers’ prior experience in thematic investing with a strong track record;
  • Diversified exposure to multiple themes that have the potential to grow at a rate superior to that of the broader global economy, due to the long term secular growth drivers that underpin them;
  • Low holdings overlap and diversification effect between underlying themes; 
  • A unique bottom-up, high-conviction investment process that integrates environmental, social, and governance ("ESG") considerations in stock selection and asset allocation decisions; and
  • Retail share class with 100% trailer fee rebated back to Endowus investors to achieve lower cost of access.

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Key Information

Fund Objective: Aims to achieve long-term capital growth by directly investing in the equities of companies that fall under Thematics AM's AI & Robotics, Safety, Subscription Economy, and Water strategy.

Suitability: Investors who are looking for exposure to equity markets on a global basis, are interested in investing in a responsible thematic fund, can afford to set aside capital for at least 5 years, can accept significant temporary losses, and can tolerate volatility.

Cost:
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  1. Total Fund-level Fees include fund management fee of 1.90%.
  2. This is a retail share class with 100% trailer fee rebated back to Endowus investors to lower the cost of access.
  3. Endowus does not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Fund Characteristics

Fund Inception: 20 August 2020
Share Class Inception: 20 December 2018
Benchmark: MSCI All Country World Index

Fund AUM: SGD 1.03bn
Source: MorningStar as of  22 July 2021. Please refer to the FMC page for the most updated AUM.

Regional Allocation:
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Sector Allocation:
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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. 

Selection Criteria

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, including Pictet Digital Fund, Pictet Water Fund, Pictet Security Fund, and Pictet Robotics Fund. 

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 

  • Should provide opportunity to earn a sustainable long term premium over the market
  • Should offer a duration of at least 10 years, but typically a much longer lifespan, allowing for a stable, long-term strategy that outlives business cycles and their swings as well as short-term trendiness, 
  • Must be reasonably broad and deep to be investable and to create a diversified portfolio of high conviction stocks, and at the same time have a focused investment opportunity set.

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. 

The Fund invests in 4 thematic strategies, namely, Safety, AI & Robotics, Water, and Subscription Economy on an equal weight basis. Although each thematic strategy is managed by 2 portfolio managers independently in a fund structure, the Fund invests directly in equity of companies and is not a fund-of-fund structure. It rebalances the portfolio on a monthly basis. 

Below is a summary of what each theme covers: 

  • Safety: invests in companies that contribute to the protection of assets, data, goods and people’s health 
  • AI & Robotics: invests in companies that focus on the provision of products and services powered by AI and/or Robotics
  • Subscription Economy:  invests in companies with the business model where companies offer access to products and/or services to the consumers for recurring payments (either on a subscription or a pay-per-use basis) instead of selling them as a one-time transaction
  • Water: invests in companies that contribute globally to the universal provision of clean water, in water pollution prevention and control and more broadly in the global, sustainable use and protection of all water resources 

Due to the different emphasis, holdings overlap of the underlying thematic strategies is low, and the Fund also benefits from the diversifying effect between the underlying themes. 

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 explicitly target sustainable investments, it advocates  this aspect and part of its investments are in companies with sustainable objectives. 

The Fund typically has more than 160 holdings, and hence is one of the most diversified thematic strategies. As Thematics AM identify new themes over time, they may get incorporated in the Fund gradually. 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.  

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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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