Technology, population aging, mobility or new forms of consumption are some of the trends that managers identify when investing. Most of them coincide in defining what these megatrends are and interpreting them as a significant reality that implies a structural change in the business models or habits of the population, and that are sustained by technology, government commitment or by the culture of society.
However, how to approach investment in these fields is what makes the difference between some managers and others, as well as between their strategies. From Robeco defend that hitting the entry point is essential to succeed when investing in trends.
"We believe that this type of investment makes more sense if it is done with a long-term horizon. This may cause you to underestimate the potential that some companies may have at the beginning, but we believe that it is better to identify what the companies of the future will be and that requires analysis and not getting carried away by fashion. Locate what or who is behind the change, "says Ed Vesrstappen, customer portfolio manager at Robeco Global Consumer Trends .
The manager is committed to a strategy of high conviction and is agnostic with the indices. Their way of investing is top down when it comes to selecting those trends that will have a long-term impact on the economy and a bottom-up view when selecting the companies that can best monetize those trends. "In particular, we look for companies that generate structural changes and we focus on companies that continue to be leaders within ten years," says Richard Speetjens, manager of the Robeco Global Consumer Trends Equities fund .
According to Speetjens right now the rising and most attractive trends to invest in are digitization and consumption. "Consumer platforms, digital payment media and gaming are areas with a great potential for growth and income thanks to the implementation of artificial intelligence, augmented reality and the internet of things," he says. This is compounded by two aspects that will further its growth: the growing middle class of emerging countries and the high loyalty of consumers.
However, he argues that, at this point in the cycle, we have to be more selective because we will also see more dispersion in the benefits. Within the selection process, the manager selects companies that have a quality and sustainable business model, that are in a competitive environment and in a growing industry and that exceed the ESG criteria applied by the manager.
Technology and finance
One of the sectors in which Robeco has set its eyes has been in the fintech, for which it has launched the Global Fintech Equities fund . The manager focuses on those companies that are changing the business model of banks and financial services. These trends are developing strongly thanks to the new regulations, which advocates transparency, and the rapid assimilation of the use of technology by users.
"It is not a simple sector to invest because you invest in the financial sector and technology, and it shows that there are not many managers that have fintech strategies. Our portfolio consists of banks, technology companies, digital payments and security, one of the great challenges facing this sector, "says Verstappen.
In his opinion, countries like Aisa or India will lead all this growth, as well as greater collaboration between the banks, which are the ones that have the clients, and the fintech, which are the companies that have the technology. "The fund allows a great balance because the banks are more defensive and the technology more aggressive. Undoubtedly, digitization in finance is a phenomenon that can not be stopped and that arrives almost ten years later than it really should have arrived ", concludes the manager.
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