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India rises to the COVID-19 challenge

May 13, 2020

India is poised to be an economic superpower, benefiting from structural factors such as business reform, income growth, urbanisation, domestic consumption and demographics. Tipped to be the world’s third largest economy by 2035[1], India holds appeal from a business and investment perspective. The COVID-19 pandemic has changed the outlook in many global economies but the challenges may only be temporary for India. Kanish Chugh, co-Head of Sales at ETF Securities, spoke to Kinjal Desai, Fund Manager Overseas – Equity for Nippon India Mutual Fund, on her views about India and the COVID-19 challenge. Managing COVID-19 With a population of 1.3bn, some commentators may have expected COVID-19 to ravage India but its infection rate has so far remained low compared to its population size. The Indian government was swift to enact measures[2] including: - travel ban and quarantine measures for returning travellers - total lockdown from 24 March 2020 - financial relief package of INR 1.7tr[3] - monetary relief with interest rate cuts from the Reserve Bank of India (RBI)[4] Current modelling suggests, if the ongoing lockdown continues to be implemented effectively, by July 2020, less than 0.01% of the Indian population is likely to be infected[5]. Further stimulus may be announced to support small and medium sized enterprises, as well as harder hit industries like aviation, hotels and tourism. Challenges and opportunities in lockdown While lockdown has created challenges for the economy, Ms Desai notes certain sectors have been able to continue to function. “There are certain sectors which have functioned, I would say quite well given the circumstances, which I’m looking at FMCGs, staples, telecom, pharma, power and utilities… Over a slightly longer term, I would say that it is the consumer discretionary sectors, which is your auto, durable goods, capital goods sectors which will… perform better but they have taken a very bad hit now,” she says. Ms Desai suggests focusing on individual players in each sector which may be positioned to gain in this environment. “The companies which have a strong balance sheet are the ones which are going to gain market share… We’ve seen how telecom have been, and how banking has done better over NBFC [6],” she says. Reliance Jio Infocomm Limited (Jio) is an example of a telecommunications company which was positioned for growth before the pandemic and has apparently continued to benefit. It is the largest telecommunications operator in India with a mobile subscriber base of 370 million and 35% market share (as at December 2019)[7] . Facebook recently announced it has purchased a 9.99% share in Jio, announcing a potential collaboration with WhatsApp[8]. The broader global environment has also created opportunities for India across the pandemic period, with oil prices at extreme lows. “India is actually the third largest oil consuming economy in the world, just after China and the US, and we are dependent on imports for 80% of our oil needs… we’ve seen [oil prices] come down by almost 60%, this has presented India with an amazing opportunity to store and build reserves. Indian companies have actually procured almost 7 million tons of oil, which is 20% of our annual needs in these low prices,” says Ms Desai. Has the pandemic changed India’s outlook? India was on track to be one of the next economic super-powers prior to the COVID-19 pandemic, so investors may wonder how the pandemic has influenced its prospects. Ms Desai views the COVID-19 pandemic as an external event, with the structural factors behind India’s growth prospects still favourable. She points to India’s demographics, low private sector debt, domestic demand orientation and low reliance on foreign demand as a structural advantage over peers like China and other emerging markets. “There are various factors which have pointed towards a steady recovery in growth. First, there are clear signs that private capex has started to pick up. This was reflected in our domestic credit growth which had remained subdued for quite a few years. But now we are seeing it sustainably growing. Secondly, like I said, the RBI was actually in the midst of a rate-cut cycle in 2019. And apart from this, the central bank has also been very proactively supporting the economy with domestic liquidity this will finally lead to transmission of these policies, lowering of policy rates to real life lending rates,” Ms Desai says. She also sees an additional opportunity for India from the COVID-19 pandemic. “This COVID-19 pandemic can actually be a turning point for the global supply chain… which is currently highly concentrated in China, and India can be a huge beneficiary of this shift. Global Investors are definitely looking at India to rise up to this opportunity and take this leap ahead,” she says. The US-China trade war had seen a number of multinational companies consider moving operations to India. The combination of the COVID-19 pandemic, and resurgence of tension between US and China in a pandemic ‘blame-game’ may see many businesses take a more serious approach to rebasing their operations. Is now the time to invest in India? Global uncertainty may be putting off many investors, but for some, now could be the time to revisit their investment strategy around India. Ms Desai says, “the valuations have become very attractive since good businesses are available at decade low valuations. The current time is very uncertain, but our long-term fundamentals continue to remain intact.” The longer-term opportunities for India remain. Ms Desai points to the demographics of India, skewed younger compared to peers, which offers benefits in terms of a large working base easily able to support growth through taxes and consumption. Consumption and income growth are also factors driving India’s growth. “India is a hugely unpenetrated market compared to global average and that provides enormous opportunity. Again, an example is penetration of video goods has just begun to expand as we come close to that $2,000 per capita [income] mark. Experience from other countries suggests that discretionary consumption, your cars, white goods travel all improve exponentially once you cross the two to $3,000 per capita income mark,” Ms Desai says. She also notes that financial literacy in India has also been improving as incomes have grown, with a benefit to the financial services industry. Those considering exposure to India in their portfolio could consider an ETF like the ETFS Reliance India Nifty 50 ETF (ASX code: NDIA) which covers 50 of the largest and most liquid Indian domiciled securities. [1] https://www.austrade.gov.au/Australian/Export/Export-markets/Countries/India/Market-profile [2] https://www.thejakartapost.com/academia/2020/04/19/indias-response-to-the-covid-19-pandemic.html [3] https://home.kpmg/xx/en/home/insights/2020/04/india-government-and-institution-measures-in-response-to-covid.html [4] https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=49582 [5] https://timesofindia.indiatimes.com/india/lockdown-till-may-31-can-stall-coronavirus-pandemic-says-study/articleshow/75653149.cms [6] NBFC refers to the Non-banking financial crisis in India. You can read more in https://www.etfsecurities.com.au/idea/individual-investors/the-three-key-drivers-of-indian-performance-in-2019-5e5d8ff76d22670017b30dc8 [7] https://www.mobileworldlive.com/asia/asia-news/reliance-jio-widens-lead-as-profit-soars/ [8] https://techcrunch.com/2020/04/21/facebook-reliance-jio/

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Active investing with passive funds

May 06, 2020

The debate between active and passive investing has always been contentious but has taken an interesting twist in recent times. Some investors have sought a ‘best of both worlds’ approach by using passive investments in an active way. So, what does it mean to invest in this way, and does it work? Kanish Chugh, co-Head of Sales at ETF Securities, spoke to Nazar Pochynok, Financial Adviser at Bell Partner Creations and Andrew Wielandt, Managing Partner for Dornbusch Wealth, on Active investing with passive funds. Taking an active approach Normally when investors think of passive or active, they think of very specific investment products. Passive investments are defined as those which follow rules or a methodology to automatically follow an index or benchmark with the aim to “match the market”, while active investments are discretionary, meaning they are made based on a fund manager’s research and philosophy. “The way we use active management is a little bit different. We use it from a risk management perspective of looking at how to change the dynamic asset allocation of our passive portfolios,” says Mr Pochynok. He primarily uses passive investments like ETFs in his portfolio to offer cost-effective access to particular assets and markets. Mr Pochynok says, “nothing in passive is truly passive. Everything is an active decision. For example, the underlying constituents of companies and the relative benchmarks they track from ETF to ETF really does differ. Do you choose an index that is cap-weighted or equal-weighted? Should the index have style factors incorporated, such as quality, size, momentum and volatility? All these decisions are not submissive. And they're very much active manager thinking more so in a cost-effective and simple-to-use strategy.” Is passive really passive? Passive investing has become increasingly popular in recent years as it offers liquid cost-effective exposure across the market or to specific assets, sectors or themes which may otherwise be difficult to access. Despite this, some negative connotations have still lingered, namely that passive investing offers “passive performance” and that you need to “pay for performance”, that is, pay higher fees for active management to generate returns. The historic data suggests this view is a fallacy. Mr Wielandt points to research conducted by Standard & Poor’s over 18 years. “The 29,000 data sets basically [show] that if you’re trying to be active and outperforming the market, you’ve got a 95% chance of failing. And of the 5% that succeed, if you look at them over the next five years, only 5% of the 5% will succeed,” he says. This research is supported even by recent data. “One of the SPIVA reports for last financial year, so take away COVID, also suggested that in 2019, for the financial year, almost 93% of active managers underperformed the ASX 200. And that number also persists at 83% underperformance over three years and 81% underperformance of the index over five years,” says Mr Pochynok. This isn’t to say there isn’t a place for active investments, but rather investors should be selective in using them and seek to identify those consistent performers. Passive with active overlay for clients The switch to using passive investments in an active way reflects a change in attitude for advisers as well as their clients. Mr Wielandt says, “two years ago I would have said that we were more just choosing direct equities…But certainly over the last eighteen months we've been far more using ETFs and passive ETFs and, as you're saying, sort of using ETFs in a passive tool in an active manner…There's some difficult conversations happening with clients that have got this direct equities focus, that have got that mindset. That was a 1990s mindset. 2020 today, and it's about total return. It's about broad asset allocation and terrain. You're using passive tools but in an active manner.” He notes that the Australian market is behind global counterparts in terms of how it’s using passive investments like ETFs but will get there eventually, following the path of countries like Canada with a similar environment to Australia. The choice to use passive investments in an active way will continue to be something investors and advisers grapple with across the coming years. For Mr Pochynok though, it has been a simple decision that comes back to the value proposition he offers to his clients. “Looking at it from a macro perspective, the real value that advisers bring is solving big rock problems for clients, and making their lives simple, efficient and providing them with effective solutions,” he says. From his perspective, using passive investments to allow him to focus on active risk-management and client goals is a natural fit.

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Dividend Cuts and COVID-19, what it means for income?

Apr 30, 2020

The effects, impacts and dislocations of the COVID-19 pandemic have been felt very heavily in the investment markets, and the fluttering of the black swan’s wings has certainly disconcerted income-oriented investors. The Australian addiction to dividends As interest rates ground lower in the 2010s in the wake of the global financial crisis, typical income strategies based on bonds became harder to justify. Income-seeking investors were effectively forced up the risk curve, toward corporate bonds, high-yield bonds, cash-generating real asset investments, and the share market. In particular, the income aspect of share dividends – turbo-charged by Australia’s dividend imputation system – became a major attraction, with effective yields in the 6%–8% range readily available. For this, investors had to accept several facts: one, that the dividends cannot be considered certain until they are paid; two, that dividends are paid at the company’s discretion, and can be cut at any time – even abandoned; and three, that they bore the capital risk of the share market. Finding yield in new areas In 2020, as COVID-19 became a fact of life, all three of these facts have forcibly reasserted themselves; particularly the capital risk. The danger in holding ANZ Bank, for example, for the dividend yield, might have seemed largely dormant – until it was halved in price inside a month. “As interest rates have come down over the past decade, we've had to change the way that we look at income; it's become quite driven by growth assets,” says Angela Ashton, founder and director of managed account provider Evergreen Consultants. “Having the central part of a portfolio with respect to income production in growth assets like property or shares introduces a lot more risk, unfortunately for clients, but that's the way you need to generate income today,” says Ashton. While some of the “traditional buckets” that have produced income in the past are under pressure, Ashton says there are opportunities in areas such as diversified credit, some of the Australian REITs, some of the Australian and US ETF equity-income products, and high-quality Australian shares - particularly consumer staples names such as Woolworths, healthcare stocks and infrastructure stocks. Seeking a new growth story Jamie Nemtsas, director at independent financial advisory firm Wattle Partners, expects income-conscious investors to take a more ‘total-return-oriented’ approach going forward. “High income is generally more risky, and ‘sustainable growth’ looks less so at the moment, if you think in terms of total return. You might be looking at a regional building company in New South Wales that has got a strong dividend, on paper; but it’s going to be far better to hold something like Google that has got a massive audience, low cost of capital, great balance sheet, and you're sacrificing some kind of regular income for a very, very strong company.” In this strategy, Nemtsas says, the investor is looking to “harvest” capital gains, and put them back into an income-producing bucket. “A growth story like CSL, you can sell portions of that holding, for years, and keep putting it into cash. Then you have another stock – it might be Amcor –that is trading sideways, price-wise – but it’s generating income.” Rebalancing and portfolio management It simply comes back to rebalancing, he says. “Say you have 5% cash, 10% fixed-income, 30% Australian equities, 20% global equities, and 35% real assets. If you rebalance regularly, and your Australian equities has moved to 34%, you ‘harvest’ that 4%, and put it back to cash. Your capital gain is constantly being converted into your ‘core’ capital, which we like to have sitting there as effectively three years’ worth of cash needs.” Nemtsas agrees that areas such as consumer staples, healthcare stocks and infrastructure stocks – and what he calls “fallen angel” sectors like travel – offer good opportunities at present. “There are also some great opportunities in credit, particularly in the ‘distressed credit’ space. “We’re looking at a range of individual investments, some stocks, some ETFs, particularly where we think they’ve been oversold, to set up portfolios for the next few years,” he says. “We’re getting the opportunity at the moment to build portfolios totally differently than we were eight weeks ago. But we’ll stick to that rebalancing strategy – sell those that go up, keep those that go sideways while yielding income. And think in terms of total return, not in terms of maximising your income return,” he says.

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Is COVID-19 the market correction “we had to have”?

Apr 22, 2020

The ETF Securities Partner Series joins with Australian and international investment professionals to discuss the big issues of the day and what these mean for investors. It may not be surprising that market volatility has soared since the COVID-19 pandemic hit, but could this also be, to misquote the famous line, the correction ‘we had to have’? We spoke to James Whelan, Investment Manager at VFS Group, Michael Ogg, Director at Providence Wealth and David Lane, Director – Wealth Management at Pitcher Partners on whether we should have expected the financial impact of COVID-19 and what comes next. An overdue correction At face value, COVID-19 has been responsible for immense uncertainty in markets (even aside from what it has meant for daily life), but there’s more to the story. “COVID-19 was the trigger for valuations to adjust from inflated levels rather than the cause. Valuations ultimately matter and its never obvious what the trigger may be,” says Mr Ogg. Long before Wuhan and COVID-19 started to hit the news, many had begun to wonder when the record length bull market would come to an end, and whether that time was now. Mr Lane says, “We had been concerned about the general level of equity markets for some time and had been anticipating a market correction.” From that perspective, many investors may have adjusted their portfolios in anticipation, but it is unlikely anyone could truly have been prepared for COVID-19 and the dramatic influence it has had. “You can’t prepare for a Black Swan event (which this most certainly is) and you can’t expect one every day otherwise you’ll never be in the market. The situation with this event, as with most major calamities, is that ‘correlation goes to 1’” says Mr Whelan. He notes the equity and bond market selloffs were expected investor behaviour in the face of uncertainty, but markets have also faced further challenges from the oil war, physical workplace disruptions and global interest rate cuts. Managing volatility While it is hard to create a portfolio to avoid every possible event to befall markets, investors can consider basic investment principles as an important tool to manage volatility. “Diversification of portfolios and avoiding highly geared expensive assets provides some protection for portfolios in an unforeseen event,” says Mr Ogg. Mr Lane holds a similar view to geared assets and says, “Leverage is one of the main reasons that investors (or traders) become forced sellers, and their returns can be magnified in the current markets.” Further to this, he says, “While there are always reasons to adapt to the current circumstances, a key element to being successful as an investor is to maintain a long-term core strategy.” How a diversified portfolio looks willvary according to the investor. Mr Whelan’s portfolios include “local and international fixed interest and bonds, thematic ETFs picked by our proprietary algorithm, tactical stock selections, protected dividend strategies and cash which is tailored to our client’s needs and risk tolerances.” Finding the right time to buy Some investors use volatile markets as a buying opportunity so may be wondering if now presents the right time to buy. All three experts are wary of picking the bottom. “One thing that never changes is human behaviour and the switch between fear and greed. It’s impossible in the current environment to form a view of what earnings may look like so trying to time entry points in equity markets is, at best, just a guess.” says Mr Ogg. Mr Lane agrees, saying, “the focus has shifted from earnings to balance sheet…Almost all expectations of revenue, earnings and dividends can no longer be relied upon. Everything needs to be rebased… Companies with low financial leverage, quality assets and sustainable business models will be the ones to survive.” This isn’t to say there won’t be opportunities, but the traditional measures investors may have previously focused on won’t necessarily be right for the current environment. While strong balance sheets are one key factor, Mr Whelan suggests long-term themes, including those stemming from the COVID-19 pandemic, can be valuable. Mr Whelan sees a new world order from COVID-19 that will open doors for certain companies. “We, as a planet, now have the template for what to do in a repeat event. Borders up, quarantine, work from home, order online, consume content from home. That will be (by default) the new way of life. We’re focusing on stocks and sectors that will assist that new way of life” he says. What next? Final words of advice “Be patient, do not panic and stay healthy,” says Mr Lane, offering a perspective for dealing with all aspects of life today. Mr Ogg suggests to those tempted to tweak their finances, “don’t try and be a hero, make sure that within asset classes you have quality and ensure you have enough liquidity to ride through the storm.” On the note of investment opportunities, Mr Whelan’s advice was as follows: “Get a plausible picture in your head of what the world looks like after this thing is done. Factor in the potential end of globalisation and even cheaper money at an unpayable debt. Think about what the average home and workplace will look like…Invest accordingly and don’t look at it every day.” If a new world is coming and markets were overvalued before, perhaps COVID-19 was indeed the correction “we had to have”.

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To rebalance, or not to rebalance?

Apr 22, 2020

The ETF Securities Partner Series joins with Australian and international investment professionals to discuss the big issues of the day and what these mean for investors. Rebalancing portfolios to strategic or tactical asset allocation weightings is a standard part of portfolio construction but in light of recent market volatility, many investors may be considering whether or not now is the time to rebalance. Kanish Chugh, Co-Head of Sales at ETF Securities, spoke to Zach Riaz, Investment Manager and Director for Banyan Tree Investment Group, and Chris Brycki, CEO and founder of Stockspot on the topic, To rebalance, or not to rebalance?. What is rebalancing? Rebalancing relates to overall strategy and the identified asset allocations the investor or investment manager believes will assist in achieving their strategic goals. As investments gain or lose value, the portion of the portfolio they represent may start to vary, so periodically investors may rebalance back to their determined asset allocations by selling or buying assets. “Portfolio rebalancing is all about making sure the portfolios that our clients have remain suitable for their investment risk capacity, as well as their investment time horizon… Rebalancing is about selling assets that have performed well and grown into too large a portion of the portfolio back towards their target rates and using that money to redeploy into assets that have shrunk,” says Mr Brycki. A recent example of this comes from the COVID-19 volatility. Government bonds and physical gold grew in value while equity markets fell in value, changing the asset composition for portfolios. Mr Brycki sold some of the gold and bond assets and reinvested in equities to restore the portfolios to their original asset allocation targets. The trigger points to rebalance It’s easy to let emotion cloud investment decisions, but in the case of rebalancing, it is important to focus on data instead. Mr Brycki says, “our triggers for rebalancing are when assets move a certain distance from their target weights… The evidence suggests that around 25-30% in terms of the move an asset needs to make against its target allocation has historically been around the optimal.” Both Mr Brycki and Mr Riaz recommend against rebalancing too frequently, such as on a daily or weekly basis or when moves are only small, to manage costs like brokerage or tax from capital gains. “Every time you rebalance, you’re likely to be realising capital gains tax, unless you’re in a structure that you’re not repaying a lot of capital gains tax for. That’s going to become a big drag on your long term performance… For us, it’s a very systematised process and we think if something’s moved, lets say 30% from its target weight, that the benefit of rebalancing definitely outweighs the cost at that point,” says Mr Brycki. Rebalancing in the current environment In the current market volatility, some investors may have taken the chance to rebalance, while others may have held back. “In the current environment, you’ve got to also look at rebalancing as an opportunity-cost… We’re a lot more defensive heading into it. We should be looking at this sell-off as an opportunity to…add on extra risk. And certainly, we’re looking to do that… This is a good reset period for investors to just re-check what the next 12-18 months look like, because… the market has changed and there will be opportunities to take advantage as a consequence of that,” says Mr Riaz. In terms of rebalancing within asset classes, investors should also be mindful of what or how they are rebalancing – it might not always make sense to rebalance. For example, in a portfolio of direct shares, it might not make sense to rebalance out of high performing shares into low performing ones, or high performing sectors into lower performing ones. Investors may also need to be conscious of asset characteristics like liquidity which could make it harder to rebalance. Investors in ETFs will also find rebalancing is done at regular intervals to replicate the indices they track, without any additional action required by the investor. To rebalance or not to rebalance Both Mr Riaz and Mr Brycki view rebalancing as an important activity, done sparingly, and one which should be done mindfully and with data on hand to back decisions. “You don’t need to rebalance all the time but be dedicated to rebalancing based on whatever the strategy you’ve decided is,” says Mr Brycki. Mr Riaz agrees and says, “you’ve just got to follow your investment process, and follow what’s worked for you in the past.”

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Is COVID-19 a boon for robotics and AI?

Apr 21, 2020

The ETF Securities Partner Series joins with Australian and international investment professionals to discuss the big issues of the day and what these mean for investors. Robotics, automation and artificial intelligence (AI) have rapidly advanced in recent years as humans look for more efficient and better ways to manage a range of activities. As the COVID-19 pandemic has forced us to rely more on technology than we ever have before, in many ways this crisis has been a benefit for this sector. ETF Securities spoke to Jeremie Capron, Director of Research for ROBO Global, on how robotics and AI have been affected during the pandemic and the prospects of the ROBO Global Index going forward. The COVID-19 era of uncertainty The pandemic has affected all areas of investment markets, with uncertainty and lockdowns reflected in market volatility. Most sectors offered negative performance for the quarter ending March 2020, but it is interesting to note that the ROBO Global Index was able to outperform broader global equities. According to Mr Capron, this comes down to a few aspects of robotics and AI companies. Digitalisation forms part of the solution to managing the changed way we work and live during the pandemic but is also part of a longer-term trend. Some companies will even directly benefit due to faster technology adoption. The companies in the index have strong balance sheets, with 60% holding a net cash position. This means they’re well placed to weather any lockdown challenges. This is a sector which, as a whole, has minimal exposure to areas that will be challenged during the pandemic. “ROBO has virtually no exposure to the maximum pain points in this crisis. Things like energy, or bricks-and-mortar retail, transportation, leisure, hospitality,” says Mr Capron. Robotics and AI form the solution The global efforts to work from home, almost instantly, has meant that there has been faster take-up of newer technology than would normally have occurred. While video conferencing might be of the first technology that comes to mind as an area benefitting from the current environment, Mr Capron says logistics and warehouse automation is an interesting area of growth. “E-commerce has seen another step-up increase in terms of utilization. There's an enormous strain that's being put on the logistical aspects of e-commerce... A good example of that would be Zebra Technologies here in the US, that provides all the track and trace technology that's used throughout the e-commerce supply chain or Manhattan Associate, another American company that provides the software that's behind warehouse management systems. Or… a Japanese company called Daifuku, that's the world leader in material handling and automated equipment for distribution centres,” he says, adding that these types of companies represent 12% of the ROBO Global Index. In a similar vein, he views factory automation as an area to revisit post the crisis. Companies who have had to deal with labour shortages and shutdowns during the COVID-19 pandemic are more likely to reconsider factory robots and automation to avoid any reoccurrence of challenges they may have faced this time. Computer processing and AI, representing around 22% of the ROBO Global Index, may be seeing an immediate benefit from the pandemic. “Those are the companies that provide the software or the computer power that’s behind the infrastructure backbone of online businesses… So, companies like Nvidia or Xilinx, SericeNow, all these businesses are seeing a surge,” Mr Capron says. Is now the time to buy? Given the reliance on technology and the prospects for the future, investors may be wondering if now is the right time to buy into the robotics and AI sector through ETFs like the ETFS ROBO Global Robotics and Automation ETF (ASX code: ROBO). Mr Capron views robotics and AI as a crucial sector now and in the future. “Robotics and AI is not a niche. It is really a set of general-purpose technologies that can be applied to all markets, all industries, and it's happening now,” he says. He is wary of saying when is the best time to buy in, given the difficulties of calling the bottom of the market but suggests from a longer-term perspective, buying robotics and AI could be attractive at this point. Mr Capron says, “from a valuation standpoint, the index is trading on a trailing PE that’s around 22-23 times, that’s basically a 20% discount to the historical average, and at the high, we see the PE of 30 times. I don’t know if we’ve seen the low for this cycle yet, but I know that once we are past the lows, small and mid-caps will outperform and our strategies are very strongly tilted towards small and mid-caps.” Whether you focus on the valuations now, or longer term, there is no question that robotics and AI are driving a major global industrial shift. If there’s a silver lining to the COVID-19 pandemic, perhaps it’s that it’s moving that shift faster, with benefits to how we work, as well as the companies fuelling that change.

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