The Zurich Investments Global Thematic Share Fund has introduced some important theme evolutions over the last two quarters. For example, the ‘Gas & Oil’ theme has been replaced with ‘Energy Transitions’ to reflect two important shifts now occurring in the sector. The first transition is the gradual shift in global energy mix as a response to climate change. The second is that the balance of power that has administered oil prices in the past four decades is now under threat. The holdings that make up this theme must be part of the solution to climate change and not just part of the problem – they must be on the right side of policy change.
Sustainable exposure to Energy? Fresh thinking in the Global Thematic Fund
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| 13 Feb 2020
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While the majority of the themes within the fund are intended to drive wealth creation, the ‘Energy Transitions’ theme plays an important diversification role within the overall portfolio. There are moments in markets when having exposure to this area can be extremely helpful to overall portfolio returns and extremely helpful in reducing overall portfolio risk. Having the right level of balance and portfolio exposure to these differentiated themes is crucial in providing sufficient participation in up-markets with a level of capital preservation in down-markets to deliver attractive returns. Over the last three years (to the end of January 2020), the team has delivered 17.8% against a decent, but occasionally bumpy index* return of 16.3%.
Steve Wreford, Portfolio Manager of the Fund, discusses the ‘Energy Transitions’ theme and how it fits into the portfolio in more detail in this video:
The ‘Asset Heavy’ theme is also evolving into two distinct structural investment opportunities. ‘Asset Efficiency’ will continue the previous focus of ‘Asset Heavy’ around the importance of industrial operating systems to improve resource efficiency. In contrast, ‘Bits of Chips’ will focus on specific areas of the semiconductor and hardware industries where the team sees structural change in both demand and supply-side drivers. The Global Framework, which seeks to summarise the team’s broad view of the important structural changes of the next decade and which plays an important role in shaping the ongoing theme development, also incorporates new observations relevant for the years ahead.
To learn more about these evolutions and to understand the role that this differentiated strategy can play in your global equities exposure, please contact your Zurich BDM or visit the website
*MSCI World (ex-Australia) Accumulation Index in $A (net dividends reinvested)
Important information: The content of this publication are the opinions of the writer and is intended as general information only which does not take into account the personal investment objectives, financial situation or needs of any person. It is dated February 2020, is given in good faith and is derived from sources believed to be accurate as at this date, which may be subject to change. It should not be considered to be a comprehensive statement on any matter and should not be relied on as such. Zurich Investment Management Limited ABN 56 063 278 400 AFSL 232511 of 5 Blue Street North Sydney NSW 2060, nor any of its related entities, employees or directors (Zurich) give any warranty of reliability or accuracy nor accept any responsibility arising in any way including by reason of negligence for errors and omissions. Zurich recommends investors seek advice from appropriately qualified financial advisers. Zurich and its related entities receive remuneration such as fees, charges and premiums for the financial products which they issue. Details of these payments