UOBAM Invest Megatrends Portfolio Performance: Q4 2022

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    08 March 2023

    Q4 2022 Portfolio performance

    • As of 31 December 2022, the UOBAM Invest Megatrends Portfolio returned -8.0% percent since its inception on 5 September 2022.

     

    Portfolio returns (% in SGD terms) and ETF weight (%) 5 September – 31 December 2022

      Return (%) Weight (%)
    Changing Demographics
    iShares Global Healthcare ETF 4.3 16.5
    Global X Millennial Consumer ETF -11.4 11.8
    Columbia Emerging Markets Consumer ETF -8.1 4.9
    Total - 33.2
    Go Green
    Invesco MSCI Sustainable Future ETF -15.8 9.7
    Vaneck Low Carbon Energy ETF -15.0 10.0
    First Trust Water ETF -2.0 14.2
    Total - 33.9
    The Digital Economy
    Amplify Online Retail ETF -16.4 7.2
    First Trust Nasdaq Cybersecurity ETF -9.9 13.2
    Global X Artificial Intelligence and Technology ETF -8.7 10.5
    Total - 30.9
    Overall Portfolio
    3 months (30 Sep - 31 Dec 2022) -2.3 -
    Since inception (5 Sep - 31 Dec 2022) -8.0 -

    Source: Factset/Bloomberg/UOBAM. ETF average weights from 5 September to 31 December 2022, cash remains at 2%.

    The information about asset allocation provided herein are subject to change at the discretion of UOBAM without prior notice. Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Returns are calculated on a single pricing basis.

     

    Breakdown By Theme

    1) Changing Demographics

    Performance (in SGD terms) 5 September - 31 December 2022

      Return (%) Weight (%)
    iShares Global Healthcare ETF 4.3 16.5
    Global X Millennial Consumer ETF -11.4 11.8
    Columbia Emerging Markets Consumer ETF -8.1 4.9
    Total - 33.2

    Source: Factset/Bloomberg/UOBAM.

    Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Portfolio returns on the scheme is calculated on a single pricing basis.

     

    Market Development

    Healthcare has performed well since the inception of the portfolio. The sector held up well as investors looked to position themselves defensively during this volatile period. The sector has the ability to pass inflation to consumers and benefit from inelastic consumer demand. Its resilience irrespective of the strength of the economy makes it an effective buffer when equity markets are volatile. On the other hand, the consumer discretionary sector did not perform as well, as persistently high inflation continues to eat into people's spending power.

     

    Outlook

    The outlook of the healthcare sector remains positive due to attractive valuations, strong fundamentals, and robust innovation. An ageing population and increasing use of new technology will provide tailwind for the sector. Healthcare profit pools are expected to continue to increase as overall patient volume rises. For the consumer discretionary sector, rising unemployment and eroding consumer savings will likely put pressure on consumer spending growth in the developed markets in 2023 should there be a recession. However, the Asian market should perform better, buoyed by the reopening of China as it relaxes Covid-19 restrictions and consumer sentiment improves.

     

    2) Go Green

    Performance (in SGD terms) 5 September – 31 December 2022

      Return (%) Weight (%)
    Invesco MSCI Sustainable Future ETF -15.8 9.7
    Vaneck Low Carbon Energy ETF -15.0 10.0
    First Trust Water ETF -2.0 14.2
    Total - 33.9

    Source: Factset/Bloomberg/UOBAM.

    Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Portfolio returns on the scheme is calculated on a single pricing basis.

     

    Market Development

    The Environmental theme’s performance was more mixed. The water and utilities sectors have performed well due to supportive government policies and growing demands for green energy as countries strive to meet their decarbonisation goal. On the other hand, electric vehicle makers such as Tesla and Nio did not fare so well. They came under pressure given their elevated valuations. Nonetheless, we continue to see the environmental theme having strong growth as the world move towards net zero targets.

     

    Outlook

    We expect the demand for renewable energy continue to grow. Enterprises and government agencies have been directing funding towards achieving new energy sources and lower carbon footprints given climate impact concerns and the limited supply of traditional energy sources. The share of renewables in global power generation has continued to rise, In the last two years, renewables have grown more than the combined increase in coal and natural gas supplies according to BP . With such structural tailwinds from the global energy transition, we remain positive on renewable and efficient technologies.

     

    3) The Digital Economy

    Performance (in SGD terms) 5 September – 31 December 2022

      Return (%) Weight (%)
    Amplify Online Retail ETF -16.4 7.2
    First Trust Nasdaq Cybersecurity ETF -9.9 13.2
    Global X Artificial Intelligence and Technology ETF -8.7 10.5
    Total - 30.9

    Source: Factset/Bloomberg/UOBAM.

    Past performance of the portfolio or UOBAM and any past performance, prediction, projection or forecast on the economy or markets are not necessarily indicative of the future or likely performance of the portfolio or UOBAM. Portfolio returns on the scheme is calculated on a single pricing basis.

     

    Market Development

    The Digital Economy theme has held up well since the inception of the portfolio. After being beaten down in the first three quarters of the year due to rising interest rates, it recovered in the last quarter of the year due to signs of moderating inflation. The US Federal fund rate is expected to peak at 4.75- 5 percent by the middle of 2023. This expectation of a stabilisation of Federal fund rates has been positive for stocks in the growth segment of the market.

     

    Outlook

    The impact of the digital trend is profound and game changing. New digital business opportunities are expanding at a rapid pace and the last two years have marked a shift in the evolution of the world’s digital readiness. We continue to see strong structural growth in the digital space due to advancements in artificial intelligence and the shift in consumption from physical retail outlets to online. We believe this will drive strong demand for digital infrastructure to support the growth.

     

    This document is for your general information only. It does not constitute investment advice, recommendation or an offer or solicitation to deal in Exchange Traded Funds ("ETFs") or in units in any Unit Trusts ("Unit Trusts", ETFs and Unit Trusts shall together be referred to as "Fund(s)") nor does it constitute any offer to take part in any particular trading or investment strategy.
    This document was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. The information is based on certain assumptions, information and conditions available as at the date of this document and may be subject to change at any time without notice. If any information herein becomes inaccurate or out of date, we are not obliged to update it. No representation or promise as to the performance of the Fund or the return on your investment is made.Past performance of any Fund or UOB Asset Management Ltd ("UOBAM") and any past performance, prediction, projection or forecast of the economic trends or securities market are not necessarily indicative of the future or likely performance of the Fund or UOBAM. The value of any Fund and the income from them, if any, may fall as well as rise, and may have high volatility due to the investment policies and/or portfolio management techniques employed by the Fund. Investments in any Fund involve risks, including the possible loss of the principal amount invested, and are not obligations of, deposits in, or guaranteed or insured by United Overseas Bank Limited ("UOB"), UOBAM, or any of their subsidiary, associate or affiliate ("UOB Group") or distributors of the Fund. Market conditions may limit the ability of the platform to trade and investments in non-Singapore markets may be subject to exchange rate fluctuations. The Fund may use or invest in financial derivative instruments and you should be aware of the risks associated with investments in financial derivative instruments which are described in the respective Fund’s prospectus. The UOB Group may have interests in the Funds and may also perform or seek to perform brokering and other investment or securities-related services for the Fund. Investors should read the Fund’s prospectus, which is available and may be obtained from UOBAM or any of its appointed agents or distributors, before investing. You may wish to seek advice from a financial adviser before making a commitment to invest in any Funds, and in the event that you choose not to do so, you should consider carefully whether the Fund is suitable for you. Any reference to any specific country, financial product or asset class is used for illustration or information purposes only and you should not rely on it for any purpose. We will not be responsible for any loss or damage arising directly or indirectly in connection with, or as a result of, any person acting on any information provided in this document. Services offered by UOBAM Invest are subject to the UOBAM Invest Terms and Conditions.
    UOB Asset Management Ltd Co. Reg. No. 198600120Z

     

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