SJB | Korschenbroich, 31.08.2021.
Im Juli konnte der Pictet Security P EUR (WKN A0LC44, ISIN LU0270904781) eine erfreuliche Wertentwicklung aufweisen und mit seiner Performance den MSCI World übertreffen. Positiv zur FondsPerformance trugen alle drei Untersegmente (Halbleiter-Produzenten, Sicherheits-Dienstleister sowie Cyber-Security) bei. 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 im Detail und berichtet über die im Portfolio vorgenommenen Veränderungen. Zudem thematisiert der aktuelle Marktbericht die FondsPerformance und gibt einen Ausblick auf die Aktienmärkte des Security-Sektors.
Market review
Equities performed reasonably well, picking up 0.7% on the month, led by the US, up 2.4%. Chinese stocks, however, did suffer from heavy losses as Beijing’s regulatory crackdown on industries, such as tech, education, and property, raised concerns about future profitability and could further reduce valuations for high-growth sectors. This dragged down emerging market assets, though EM Asia stocks took the brunt of the losses, down some 7.5%. Japan also suffered, though concerns about a serious wave of Covid also played its part, knocking more than 2% off the market. Growth-oriented stocks far outperformed value on the month, returns from these two factors are now neck and neck for the year: value was a big winner for the first few months of 2021. Profit-taking knocked back energy stocks, losing more than 5% on the month, though they were still up more than 20% on the start of the year. Materials, health care and IT all performed well. Regarding the security universe, Physical Security Products, IT Security Products and Security Services were all positive over the month.
Performance analysis
The strategy outperformed the MSCI AC World over the month, with all three segments contributing positively to performance. The performance of Physical Security Products was mainly driven by the life science names. Security Services continued to see a comeback in the credit bureau space. Within the IT Security Products pocket, the main performers were the cybersecurity names.
Portfolio activity – overweightings & underweightings
Over the month, our trading activity led to an increase in Security Services. In Physical Security Products, we decreased our exposure to the industrial safety names. While in Security Services, we continued to come back in some data and physical storage names and some business services names. In IT Security Products, we reduced our exposure to the one Chinese stock we hold. Over the month, we sold one name in the IT Security Products segment.
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 are top priorities. 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
The trend for equities is still looking good. The Covid-19 vaccines allow us to look beyond the pandemic and focus on the strengthening economy, which remains supported by a substantial growth of corporate profits. However, attention recently turned to central banks and the growing prospect of a winding down of the monetary stimulus that boosted stocks since the onset of the pandemic. With the vaccine roll-out gathering pace in many parts of the world, the worry is that policymakers, especially in the US, risk over-stimulating the economy and stoking inflation. Consequently, financial markets are in the process of transitioning from a liquidity to growth-driven pattern, which comes with higher volatility. We believe this is a logical and healthy development. As such, market rotations remain the key thing to watch with reflation and reopening stocks, which may continue taking the lead due to an evidence of a better recovery and GDP. With such a backdrop, we continue to focus on quality names within the portfolio and we will be opportunistic by raising exposure to cyclical names when appropriate.
Pictet Security Management Team
Yves Kramer
Alexandre Mouthon
Rachele Beata
