Flexibility, adaptability, resilience are some of the qualities and advantages of investing in thematic funds through the DPAM NEWGEMS
Identifying the winning themes of the future and, within them, the leading companies in the coming years is not available to everyone. Therefore, the best option is to do it through specialized managers and, if it is through a product that combines the 7 disruptive themes of the future, it is the DPAM Invest B Equities NEWGEMS Sustainable.
Adaptable, resilient and flexible: three qualities the thematic investment through the DPAM New Gems
To talk about topics of the future is to talk about topics related to technology with all the subtopics that it entails: cloud computing, intelligence, biomedical research … etc. But it is also talking about nanotechnology, ecology, wellness, Generation Z, manufacturing 4.0 or security. Themes that, in one way or another, are linked to the great demographic, social and economic trends that are being defined today looking to tomorrow. Gonzalo García Valero, responsible for advising at Caser Asesores Financieros recognizes that issues such as the aging of the population “we like but it is true that, within this theme, there are others such as consumption, tourism for the elderly … and where we see great potential is in topics such as video games, e-commerce – which is also growing at the real estate level with the creation of logistics points – and issues related to water, health, safety…. ” See: DPAM Invest B Equities NEWGEMS Sustainable: possibility of investing in 7 megatrends in a single fund.
A multitude of topics and stories in which to invest in which it is sometimes difficult to identify who will be the winners. Juan Hernando, head of fund selection for Morabanc says that today there are many very good topics, but “when making a portfolio it can be difficult for me to choose the 3-4 winners. This type of multi-thematic approach seems to me quite accurat.
Manager experience, correlation and coherence: three qualities to look for in the thematic funds
It speaks of an approach like that of DPAM Invest B Equities NEWGEMS Sustainable, a global equity fund that invests in the seven themes mentioned above. But how do these strategies fit in at a time when most economies are in recession? What role do they play in the portfolio at a time like today? Javier Martín, partner of Ursus 3 Capital assures that “the themes are no more than evidence of human needs and, therefore, there will be business opportunities for a long time.” In fact, from the sector they assure that they are investment trends that will grow even above what the world will do in the coming years.
This expert recognizes that, throughout the coronavirus crisis, sectors such as infrastructure or the real estate market have been seen as economies such as ASia or the United Kingdom have suffered, for different reasons, and where he currently finds attractive valuations . And, in addition, there are the small and medium-sized companies. In this sense, it is important to think about which will be the disruptive businesses and which will be the disrupted ones. “There are traditional sectors that are disrupted in which we do not invest, an example are the European and Spanish entities, although we do not discriminate by sector, since we have paypal and Visa in our portfolio,” says Amparo Ruiz Campo, Country Head Iberia and Latam of DPAM.
When it comes to having an approximation to the funds that it invests in these issues, from Morabanc they consider it key to see what is the economic sense of the investment, what is behind it. “There are themes that can be very striking and that is not your time. The theme itself is one thing and whether it makes economic sense or not is another, ”says Hernando. In addition, assures this expert, it is important to analyze who is the manager and his experience managing the topics; the valuations of the companies in which it invests and try to see both the biases and the correlation that the different themes have with each other. Caser’s expert would also add the portfolio’s own composition. “Normally when I analyze investment funds linked, for example, to the autonomous vehicle Google, it is the first position but it is also in funds that invest in artificial intelligence or finance. It is necessary to know what is the percentage of income that the company has to have in a subject to justify the investment in it ”. This expert believes that if Artificial Intelligence reports 5% of the profits to Google, there is no point in having a 6% position in the portfolio.
A type of investment, the thematic, which has a growing demand in the Spanish market. From Caser they believe that the Spanish investor is increasingly aware and the thematic part of the investments has greater importance in their portfolios “because the thematic funds have shown to have tremendous resilience, flexibility and adaptation to change and, in the long term, have offered a profitability-risk binomial more attractive than other strategies ”. And also, these themes are stories that the client understands perfectly because he is living them.
On the supply side, Consuelo Blanco, head of funds for Investment Strategies believes that the supply of products in Spain is varied and “there are very good products.” An offer that has probably taken over from the sector funds. From Morabanc they speak of a transversality of these strategies since the same theme “can cover 3-4 sectors. The offer at the national funds level has grown a lot, and an important part has been due to the results and evolution, but another has been due to the story. It’s a nice part of explaining. ”