Our thematic equity investments track disruptive secular growth themes—including safety, water, and AI & robotics—and are managed by a team with decades of thematic investing experience. The team taps markets that have the potential to grow at a rate superior to that of the broader global economy thanks to a range of long-term secular growth drivers. See how this can help you make the most of the innovation and trends shaping the future.
An experienced thematic equities team
Portfolio managers Arnaud Bisschop, Frédéric Dupraz, Simon Gottelier, Karen Kharmandarian and Nolan Hoffmeyer are the latest addition to the multi-affiliate family of leading investment managers at Natixis Investment Managers. The team have, on average, more than a decade of thematic investing experience.
Mohammed Amor, CEO, introduces the team’s approach to global equity investing.
How would you describe the team’s approach to investing
Which market segments or themes do you focus on?
Take water, for example. Our strategy seeks to identify investment opportunities in the companies participating in the provision of ’water infrastructure’, ‘pollution control’ and ’demand efficiency’ products and services.
Water is a basic need, not only for human life but also for economic development. It is a limited resource with growing demands placed upon its provision to sustain demographic and economic growth.
With the increasing need to treat or transport water where it is required, and collect it when used to avoid cross contamination, demand is increasing for the provision of technologies and services to deliver the required quantity and quality of water. The companies participating in this market therefore stand to benefit from its potential growth. We believe that the ever-growing water service industry represents a large, diversified, attractive and differentiated investment opportunity.
As for the automation and technological improvements brought by AI & robotics, they are changing in new and unforeseen ways how we live, interact and do business. This is occurring through the combination of significant advancements in performance capabilities and rapidly declining costs in key enabling technologies. And, as AI & robotics is a ‘general purpose’ technology that is growing exponentially rather than linearly, use cases are already many and growing – from opportunities in industrial automation and healthcare to office tasks and consumer services.
Likewise, the technology rapidly changing our world also creates new risks to the safety of individuals, communities, industries and nation states. As new threats emerge to this basic need, new steps will be taken to mitigate them. That creates a huge opportunity to invest in those market participants that will be on the forefront of the changes in safety.
AI & robotics, safety and water are all ‘themes’ that are becoming more prevalent in every aspect of our daily lives, with each one benefiting from long-term global trends in demographic, environmental, technological or lifestyle factors. We believe they each represent a potentially attractive and differentiated investment opportunity.
Why are you the best team to rise to these challenges?
Prior to joining Natixis Investment Managers, these managers were part of an extremely well-known and successful thematic franchise. Over time, they have developed and launched a range of thematic funds and together have been involved in the management of more than $21 billion.
How does a thematic approach differ from traditional portfolio construction?
This differentiates thematic investing from traditional stock-picking. We are benchmark agnostic, breaking away from market-cap weighted indices – which give more weight to companies and industries that have won in the past – and focusing instead on the winners of tomorrow. Our investment horizon is therefore inherently long term.
Our thematic equity investments
We offer unconstrained and concentrated portfolios with a high active share relative to any major global equity index. Each one identifies companies with an attractive risk/return profile driven by long-term secular trends and meeting non-financial criteria relating to ESG issues.
Water - Water is essential to life. One of our most important natural resources, water is affected by global issues, from population growth, urbanization, and increasing regulation to pollution and climate change. Thematics Water Fund invests in companies participating in the provision of water utilities, pollution control and water infrastructure services.
AI and Robotics - Artificial intelligence and robotics are becoming more and more ingrained in every aspect of modern life. Significant advancements are boosting performance and lowering costs across a variety of sectors of the economy – and dramatically shifting the way we do business, live, and interact. Thematics AI and Robotics Fund invests in companies that focus on the provision of products and services powered by AI and/or Robotics.
Safety - Every-day activities – from travel and online shopping to energy production and networking – are secured by forces that are practically invisible. These intangible resources underpin the framework of human safety in our global world today. Thematics Safety Fund invests in companies that offers products and services for the physical and digital protection of individuals, business and government.
Subscription Economy - While some companies and industries were born as subscription services, others are increasingly using subscriptions to monetise their services or products – from video and music streaming to fitness, video games and retail. Shifting consumer preferences, technological innovation and increasing sustainability concerns mean the subscription economy is poised for accelerating future growth. Thematics Subscription Economy Fund invests in companies that provide products or services on a subscription basis.
META - We believe that each of our funds invests in the themes that are driving the future humanity, society, and the planet. To that end, Thematics Meta Fund is comprised of the strategies within our thematic franchise – offering broad exposure to these critical themes in a single place. It invests directly in equity of companies and is not a fund of funds.
Thematic Equity Investing Strategies:
Both consumers and businesses are subscribing more and more to products and services. This Insight shines the light on some of the long term factors that are driving the broad adoption of subscription based models across a nice mix of industries.
Karen Kharmandarian, co-manager for the Thematics AI & Robotics strategy, explains why AI and robotics will continue to influence all aspects of our lives.
Frederic Dupraz, lead manager of the Thematics Safety strategy, explains why the response to emerging threats to our safety create investment opportunities.
With the right supporting demographic, technological and sustainability drivers in place, the subscription economy is poised to see further accelerating growth
Simon Gottelier talks about Thematics Asset Management’s proposition and how they integrate ESG into the mix.
In the future, will everyone be investing in megatrends? And who benefits from shifts in demographic, innovation, globalisation and scarcity?
Sustainable investing focuses on investments in companies that relate to certain sustainable development themes and demonstrate adherence to environmental, social and governance (ESG) practices; therefore the universe of investments may be limited and investors may not be able to take advantage of the same opportunities or market trends as investors that do not use such criteria. This could have a negative impact on an investor's overall performance depending on whether such investments are in or out of favor.
This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions expressed are as of August 31, 2019 and may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted, and actual results may vary.