Matthew Drennan
Zurich Investments has announced the launch of its Global Thematic Focus Fund, a high conviction, long-term strategy offering Australian advisers and their client’s access to a select number of investment themes with high return potential.
Based on the biggest structural changes of the next decade, the strategy consists of three to six high conviction investment themes. These translate into a portfolio of typically 35-50 global stocks directly anchored to these themes – rather than constructed relative to a benchmark.
“This high conviction, long-term style of investment has been high on the wish-list for financial advisers for some time now, and we are pleased to bring this strategy to Australian investors during a period of historic global challenge but also significant investment opportunity,” said Head of Savings and Investments for Zurich Investments, Matthew Drennan.
“Australian advisers now have the ability to provide clients the opportunity to invest in the upside potential of global structural change in a purpose-designed, long-term investment,” he added.
Focus on higher returning themes
The investment team’s global framework, sourced directly from extensive discussions with company management and industry research, guides the identification of the major structural drivers of the next decade, which are currently:
- Geopolitics – deglobalisation, demographics and the rise of China;
- Monetary policy – debt and disinflation;
- Sustainability – addressing climate change and inequality; and
- Technology – the impact of AI, connectivity, and industry disruption.
The team then identifies key investment themes which fit within this view of the world and will benefit from these structural changes over the next 3-10 years. These proprietary themes, which evolve over time, are specifically designed to allocate capital to high-return opportunities. The current themes are:
- Asset Efficiency – companies that deploy industrial operating systems to harvest efficiency gains;
- Bits of Chips – key components that enable the digitisation of transportation, industry and communications;
- Empowered Consumer – consumer-facing companies with strong and adaptable business models;
- Software as a Standard – software companies that are augmenting and automating white collar jobs;
- Digital Runway – the emerging markets fintech and financial inclusion opportunity; and
- Data, Networks and Profits – capturing returns from artificial intelligence while navigating the increasing need for data privacy.
The Global Thematic Focus strategy also has a fully integrated approach to sustainability, including theme alignment with the UN’s Sustainability Development Goals and a proprietary sustainability framework for stock selection.
“This is a forward looking, style agnostic fund that focuses on the long-term and how companies are allocating capital, especially as we see emerging trends resulting from the global pandemic,” said Mr Drennan.
“In a market polarised between growth and value, the global thematic strategy offers advisers a compelling option for portfolio construction that can deliver excess returns regardless of prevailing market style. Instead of consensus positions and short-termism, these proprietary themes, based on real world observations, can evolve to capture the best ideas within a changing world.”
“Our best-of-breed approach to bringing proven asset management expertise to Australian advisers and clients identified the clear opportunity to expand our long-term partnership with Lazard Asset Management which manages the underlying Fund,” he concluded.