Cedrus’ global equity fof 40% exposed to thematic funds
French boutique Cedrus Asset Management, specialised in SRI fund selection, reported its global equity fund of funds Cedrus Sustainable Megatrends (CSM) was exposed at 40% to thematic equity funds at the start of January.
The fof launched in 2014 invests in funds focusing on three long-term growth megatrends identified by Cedrus AM (energy transition, natural resources and human development) which are divided in 12 sub-themes. Its benchmark is the MSCI World Euro.
The rest of the portfolio is allocated to index funds. Equity funds playing the energy transition theme account for 15% in Cedrus’ fof allocation.
The firm explained it remains prudential in its allocation towards thematics. Cedrus said the drop in oil prices has strongly impacted some themes like low carbon energies and renewable energies. Concerns about China have as well penalised thematics.
Commenting the megatrends, Cedrus said 2016 should demonstrate the growth of the energy transition theme is decorrelated from these of the global economy, that would trigger a rebound in stock performances.
The firm highlighted a stable performance as for the natural resources megatrend.
Healthcare tows up the human development megatrend. Cedrus assessed the innovation momentum in the healthcare sector will remain strong in 2016. However, perspectives seem less bright for the sub-sector of nutrition. Values are too expensive and performances have been mainly driven by M&A activity and an environment that does not favour a risky approach.
After outperforming its benchmark in Q1 2015, the Cedrus Sustainable Megatrends fund has underperformed it from mid-April to end December 2015.
Since inception, the strategy has outperformed the MSCI World Euro index by 16.5%.