Raiffeisen-MegaTrends-ESG-Aktien at a glance
Investment in three megatrends in roughly equal proportions: technology, demographics, climate
Sub-trends include, for example: Artificial intelligence (AI), electric mobility, health (long life), cloud computing, cyber security, etc.
Around 100–120 equities, minimum market capitalisation of 250 million Euro
Sustainability considerations and ESG criteria are systematically integrated into the investment process (Raiffeisen ESG indicator* as the minimum sustainability benchmark)
What are megatrends about?
Megatrends are deep-seated, long-term changes (for example technological innovations, ageing societies, climate change) that shape markets and business models in a lasting way, usually over decades. Economic trends or geopolitical developments may temporarily overshadow these megatrends, but they do not permanently slow them down or stop them.
Why are megatrends a sensible investment theme?
Megatrends offer structural growth opportunities that are less dependent on the economic cycle. However, they are of course not immune to economic ups and downs. Market leaders in key areas often show strong profitability and a high willingness to innovate. Broad diversification across sub-trends reduces the risk of individual investment themes. However, price declines and even capital losses are still possible.
Raiffeisen-MegaTrends-ESG-Aktien
Invest in megatrends
Current positioning of Raiffeisen-MegaTrends-ESG-Aktien
The global Raiffeisen-MegaTrends-ESG-Aktien fund invests in companies whose business models are directly or indirectly connected with megatrends, for example AI platforms, chip manufacturers, renewable energies, healthcare innovations, e-mobility and water infrastructure.
The fund management does not invest in short-term trends, pure speculation without permanently superior business models, or in companies without a clear link to the megatrends.
How does the equity fund invest in megatrends?
The portfolio is globally oriented toward developed markets and emerging markets. Each of the three major thematic blocks (technological change, demographic change, climate change) makes up approximately one third of the fund portfolio, whereby this reflects the strategic orientation and the respective shares fluctuate and are not constant.
Within the three major thematic blocks there are numerous sub-trends:
artificial intelligence (AI),
e-mobility,
health (longevity),
cloud computing and
cyber security.
The fund invests in a fundamentally oriented way and focuses in share selection on the earnings power and financial health of the companies (bottom-up). The macroeconomic and monetary policy environment plays a subordinate role. However, the fund remains exposed to general market movements.
In the technology area, the fund management currently sees the expansion of power grids, data centres and artificial intelligence as the most exciting themes. The fund management is among other things focusing on companies that are indispensable for the expansion of power grids, as well as on those that supply the necessary components for data centres and AI infrastructure. These include, for example, chip manufacturers and their suppliers. In the area of demographic change, longevity (including quality of life) is currently a strong focus. In the case of climate change, renewable energies naturally form an important focus.
Opportunities
Long-term growth opportunities, for instance in AI, cloud computing, healthcare, renewable energy and e-mobility
Diversification effects across sub-trends can (partially) offset or mitigate temporary setbacks
Investment in market leaders with strong innovative capabilities
Risks
Rapid technological change and high capital requirements (e.g. chip industry, power grids, AI infrastructure)
Political/trade-related uncertainties (e.g. measures by the US administration, tariffs, geopolitical conflicts and wars)
General equity market risks: price declines and even loss of capital are possible
Equity funds are also subject to fluctuations in the capital markets and may result not only in capital gains but also in capital losses.
Outlook
Overall, the fund management sees Raiffeisen-MegaTrends-ESG-Aktien as currently well positioned in all three major megatrends, and all three have contributed positively to fund performance in recent years. The diversification effects of these major trends and their sub-trends have also worked quite well so far.
There is, of course, no guarantee that this will continue in the future, and in the event of a sharp general decline in the stock market, almost all fund positions would likely be affected, despite the long-term good earnings prospects offered by megatrends. One trigger for this could be the war between the USA and Israel against Iran if it lasts for a longer period and leads to sustained, severe disruptions. At the same time, however, there are areas within the megatrends and the individual sub-trends that would likely be less affected even then, for example pharmaceuticals and healthcare products.
Other topics or sectors could even benefit indirectly from this war and the rising prices of oil and gas. This applies, for example, to companies active in wind power, solar energy and the storage technologies required for these. Because in addition to climate change, there is now also a stronger strategic, political and economic incentive to reduce dependence on fossil fuels.
>> Brief portrait of Raiffeisen-MegaTrends-ESG-Aktien
In the video, fund manager Günther Schmitt provides an overview of the fund, including which companies the fund invests in and who might find the fund interesting.
Investing sustainably in megatrends
Sustainability criteria are an integral part of stock selection. This means that social aspects, environmental aspects and the way a company is managed are taken into account in decision-making, as are economic indicators. The fund therefore combines financial analysis with a minimum sustainability level. For this purpose, it mainly uses the “Raiffeisen ESG Indicator” created by Raiffeisen KAG itself, which is updated monthly. The focus is on companies that provide solutions for sustainable challenges (renewable energies, energy efficiency, circular economy, water, healthcare solutions, e-mobility).
Impact assessment
Incidentally, the fund
*Raiffeisen Kapitalanlage-Gesellschaft m.b.H. continually analyses companies and countries with the help of internal and external research providers. Together with an overall ESG rating including an ESG risk assessment, the results of the sustainability research are converted into the so-called Raiffeisen ESG Indicator. The Raiffeisen ESG Indicator is measured on a scale of 0-100. The assessment is made in consideration of each company’s respective branch of business. Further information can be found in German at Raiffeisen-ESG-Indikator and in English at Raiffeisen ESG Indicator
The fund Raiffeisen-MegaTrends-ESG-Aktien exhibits elevated volatility, meaning that unit prices can move significantly higher or lower in short periods of time, and it is not possible to rule out loss of capital.