Aktien aus den Bereichen IT-Sicherheit und Security entwickelten sich zuletzt positiv – in der Konsequenz schraubte der Pictet Security P EUR (WKN A0LC44, ISIN LU0270904781) im Handelsmonat Oktober seine bisherige jährliche Wertentwicklung auf +27,96 Prozent nach oben. Das aus Yves Kramer, Alexandre Mouthon und Rachele Beata bestehende Pictet Security Management Team analysiert für alle Investoren der FondsStrategie SJB Nachhaltig die jüngsten Marktentwicklungen und Veränderungen im Portfolio. Zudem thematisiert der aktuelle Marktbericht die FondsPerformance im Detail und gibt einen Ausblick auf die Aktienmärkte des Security-Sektors.
Market review
Global equities gained 3% in local currency terms, as investors welcomed signs of reprieve in the US-China trade tensions and monetary stimulus measures from major central banks. The Fed cut interest rates by a quarter of a percentage point to 1.75% and the ECB continued liquidity injections. US stocks gained about 2%, with the S&P 500 index setting a fresh record high. Stronger than expected economic data from China helped emerging market equities perform better still. The pattern of returns across equity sectors reflected a growing appetite for risk. Cyclical sectors such as technology, financials, real estate, industrials and consumer discretionary outperformed. On the flip side, defensive sectors – consumer staples and utilities – finished the month in the red. Regarding the security universe, IT Security Products, Security Services and Physical Security Products were all positive over the month.
Performance analysis
The portfolio underperformed the MSCI World over the month. Security Services returned a negative contribution while Physical Security Products and IT Security Products were positive. In the IT space, some cybersecurity names experienced weaknesses while hardware security contributed positively. Within Security Services, the negative contribution was mainly split amongst some specialized security services stocks and one secured consumer payment name. Finally, the main contributors within the Physical Security Products segment were our life sciences names together with the transportation safety segment.
Portfolio activity – overweightings & underweightings
Over the month, we continued to reduce the allocation to both the IT Security Products and Security Services by reallocating the proceeds to Physical Security Products. In this segment, we mostly added to our industrial safety names. In Security Services, we started to take profit from some of our fintech stocks, following a strong yearly performance, and increased our exposure to our data and physical storage stocks. Finally, within IT Security Products, we increased our exposure to cybersecurity and took profit from data centers. Over the month, we sold four companies from the fintech, business services, industrial safety and cybersecurity segments. We added two companies in the cybersecurity, data and physical storage space.
Market outlook
Given the persistent uncertainty surrounding the current state of the economy, we believe that securing the critical infrastructures of countries, protecting citizens’ integrity and ensuring the ability of businesses to meet their objectives is a top priority. We therefore remain confident about the fund’s ability to outpace the global equity market on earnings and cash-flow growth over the next few years, as stricter regulation (such as PSD2, GDPR) is likely to remain a key driver for security going forward; and IT systems and cybersecurity remain a priority for governments and companies. We are therefore confident that the fund is an attractive investment opportunity to capture a long-term trend with strong fundamentals and good diversification properties.
Portfolio strategy
Business cycle indicators persistently show risks to world economic growth. Leading indicators suggest global GDP growth will slow to 2.4% annualized, from 2.9% at end-2018, with developed economies responsible for most of that slowdown. Concerns about a full-blown trade war between the US and China have led to deterioration in business confidence and economic activity, particularly in the developed world. However, current near-term progress in the US-China trade negotiations would help to calm the corporate and global uncertainty. There is also a chance that the US Congress will pass the US-Mexico trade agreement, which would be a boost to American businesses. Against this backdrop of potential positive news on trade, along with low interest rates worldwide, the global GDP growth should start to reaccelerate. Consequently, we to believe that a wellbalanced portfolio is likely to deliver stronger results. We favor companies that have strong structural positioning, can expand margins, grow earnings and have plenty of cash.
Pictet Security Management Team
Yves Kramer
Alexandre Mouthon
Rachele Beata
