Megatrends Equity
Key points:
- Long-term secular megatrends as the key performance driver
- Preference for companies with pure-play exposure to these growth trends
- Focus on companies with proven record of high returns on invested capital across sectors and regions
Philosophy
The investment philosophy for the Megatrends Equity strategy is based on our conviction that we can generate alpha:
- Top-down – by identifying the most appealing trends and themes at an early stage; and
- Bottom-up – by selecting attractively priced stocks that are set to benefit from these trends and themes.
Process
Our investment process consists of three steps. The first involves the top-down identification of long-term megatrends from a global, well-diversified perspective. The five major long-term trends are Connected Enterprise, Digital World, Emerging Middle Class, Healthy Aging, and Resource Stewardship. The second step is the bottom-up selection of companies that combine high exposure to the selected themes with upside potential. And the third step is careful portfolio construction. The position sizing that forms part of this final stage of the process is based on conviction level and risk-return trade off.
Team
The Megatrends Equity strategy is managed by two portfolio managers. They are supported a dedicated analyst for this strategy and the other trend portfolio managers in the Trends Equities team. This team is responsible for a range of trend strategies that are expected to provide above-average returns by profiting from long-term structural trends. The portfolio managers of this strategy have access to Robeco’s global, emerging markets and sustainability analysts and portfolio managers.
