Was hat sich zuletzt bei den Aktien aus den Bereichen IT-Sicherheit und Security getan, die das Portfolio des Pictet Security P EUR (WKN A0LC44, ISIN LU0270904781) dominieren? Das aus Yves Kramer, Alexandre Mouthon und Rachele Beata bestehende Pictet Security Management Team hat die Antworten für alle Investoren der FondsStrategie SJB Nachhaltig parat. Der aktuelle Marktbericht per Ende April thematisiert die FondsPerformance, die Veränderungen im Portfolio sowie den Ausblick für die Aktienmärkte des Security-Sektors.
Market review
Global equities rallied in April, with the MSCI World Index reaching record highs. The gains were driven by cyclical, high beta sectors. Financials, IT, communication services and consumer discretionary sectors gained between 5% and 7% respectively over the month. In contrast, healthcare and real estate underperformed, ending April in the red. On a regional basis, most major markets achieved solid gains. European shares added over 5%, while the US market rose 4%. Strong consumer spending data helped the S&P 500 hit record highs. The developing world’s outperformance owes a lot to China, where recent fiscal and monetary stimulus along with continued progress in US-China trade talks have helped stabilise the world’s second largest economy. China’s industrial production has rebounded to the strongest level since 2014, while infrastructure spending and car sales have stopped their precipitous decline. In the security universe all sub-segments were in positive territory during the month. The IT security products segment recorded the strongest performance, followed by security services and physical security products.
Performance analysis
The portfolio outperformed the global equity market during the month. Every segment contributed positively to performance. In IT security products, our hardware security names contributed the most. Within security services, fintech was the best contributor. Physical security’s contribution was driven by industrial safety companies. Lifesciences was the main detractor due to profit-taking following a very strong start of the year.
Portfolio activity – overweightings & underweightings
We made some changes to the portfolio. First, we continued to reduce our overall exposure in the security services sub-segment, favouring instead both the physical security products and IT security products sub-segments. In the security services subsegment, we have ade some selective adjustments by reducing our data & physical storage segment and fintech exposure. For the physical security product sub-segment, we increased our weighting on some of the industrial safety names, while remaining cautious on the sell-off of Lifesciences. In IT security products, we added to our hardware security segment. During the month, we added two stocks, one industrial safety name and the other in the cybersecurity 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, and IT systems and cybersecurity remain a priority for governments and companies. As such, we are confident that the fund is an attractive investment opportunity for capturing 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% annualised 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, central banks are once again taking action to support growth. The US Federal Reserve has signalled a halt to rate increases, and it may also slow the pace of sales in its bond portfolio. What is more, China has implemented monetary stimulus on top of fiscal measures to stabilise economic growth. Together, the actions of the world’s most powerful central banks are likely help calm investors’ nerves following the market rout at the end of 2018. Still, central bank action cannot completely eliminate investment risks, i.e. tensions between the US and China. Following the good performance of riskier asset classes last month, valuation metrics are now back in neutral territory. Consequently, we currently believe that a portfolio well balanced is likely to deliver stronger results. We favour 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
