The content displayed on this website is exclusively directed at qualified investors, as defined in the swiss collective investment schemes act of 23 june 2006 ("cisa") and its implementing ordinance, or at “independent asset managers” which meet additional requirements as set out below. Qualified investors are in particular regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes and central banks, regulated insurance companies, public entities and retirement benefits institutions with professional treasury or companies with professional treasury.
The contents, however, are not intended for non-qualified investors. By clicking "I agree" below, you confirm and acknowledge that you act in your capacity as qualified investor pursuant to CISA or as an “independent asset manager” who meets the additional requirements set out hereafter. In the event that you are an "independent asset manager" who meets all the requirements set out in Art. 3 para. 2 let. c) CISA in conjunction with Art. 3 CISO, by clicking "I Agree" below you confirm that you will use the content of this website only for those of your clients which are qualified investors pursuant to CISA.
Representative in Switzerland of the foreign funds registered with the Swiss Financial Market Supervisory Authority ("FINMA") for distribution in or from Switzerland to non-qualified investors is Robeco Switzerland AG, Josefstrasse 218, 8005 Zürich, and the paying agent is UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zürich. Please consult www.finma.ch for a list of FINMA registered funds.
Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco/Robeco Switzerland product should only be made after reading the related legal documents such as management regulations, articles of association, prospectuses, key investor information documents and annual and semi-annual reports, which can be all be obtained free of charge at this website, at the registered seat of the representative in Switzerland, as well as at the Robeco/Robeco Switzerland offices in each country where Robeco has a presence. In respect of the funds distributed in Switzerland, the place of performance and jurisdiction is the registered office of the representative in Switzerland.
This website is not directed to any person in any jurisdiction where, by reason of that person's nationality, residence or otherwise, the publication or availability of this website is prohibited. Persons in respect of whom such prohibitions apply must not access this website.
Since the election of Trump as the next US president, investors are starting to notice the financial sector’s low valuations and are allocating more money to it. Combining this with the fact that some segments of the financial sector are more resilient to (or even benefiting from) higher interest rates, we expect the sector to continue its strong performance in 2017.
We started 2016 with the strong belief that interest rates were too low and at some point had to turn higher. We also believed that the financial sector was seriously lagging behind with its investments in IT and was not ready for a future with distributed ledger technology, Fintech competition and ever larger regulatory demands. In a world where growth was difficult to find, it made sense to look for growth in emerging markets financials.
The focus in our New World Financial Equities strategy was and continues to be on the aging finance trend (higher interest rates at some point and increasing need for savings), the digital finance trend (IT investments and Fintech growth) and the emerging finance trend (find emerging markets with a growing middle class and invest in the best positioned financials). Initially, interest rates moved down and into negative territory. Virtually everybody was convinced that rates would stay low forever. 2016 however turned out to be a year of very unexpected market movements, with Brexit and the election of Donald Trump as the most striking examples.
At the end of 2016, especially US banks but even European banks have priced in a lot of hope after the election of Trump, which is expected to lead to lower corporate tax rates, higher interest rates, better economic growth, less regulatory pressure and possibly lending growth. Still, lending growth and regulatory relief may turn out rather difficult to achieve.
While US and European banks have rallied hard, global life insures remain relatively cheap. They have only priced in part of the realized (!) move in higher bond yields. In the digital finance and emerging finance trend we have seen poor performance because of the Trump election as higher interest rates hurt IT stocks and stocks in emerging markets. Many Fintech stocks and other digital finance trend investments have lost (a significant part of) their growth premium. Most financials in the emerging finance trend are now cheap while the growth outlook has actually improved with the US economic outlook looking quite healthy.
Since the election of Trump, investors are starting to notice the low valuations of the financial sector. They have been allocating more money to the sector, causing it to outperform the MSCI All Country World Financials index. Combining this with the fact that some segments of the financial sector are more resilient to (or even benefiting from) higher interest rates, we expect the sector to continue its strong performance in 2017.
We see further upside to long-term interest rates while beyond December’s Fed rate hike we are not automatically assuming two or three more. European politics and Europe’s banks continue to be a worry with quite a few elections taking place in 2017.
Analysts and investors are finally starting to look at 2017 with a bit more realism it seems. Some early doubts emerge whether Trump will be able to deliver on all the hopes of lending growth and deregulation. With a more realistic outlook and with long term interest rates clearly higher, attention has started to shift to (global) life insurers and emerging markets (banks). We also believe Fintech has become a lot more attractive and as investments will grow in 2017, we strongly believe investors will return to the Fintech space.
Just like in 2016, blockchain and Fintech will receive a lot of attention in 2017. Robeco New World Financials also aims to benefit from the growth in Fintech, currently investing between 15% and 20% in companies that officially are not part of the financial sector. More than one third of the portfolio is invested in the digital finance trend.
We are particularly careful not to get carried away by the hype, though. Just like some predicted in 2000 that the banking office was doomed (Euromoney: Death by a thousand clicks), many ‘experts’ are now lined up to make extraordinary predictions. Not every Fintech IPO is guaranteed to be a screaming success. Moreover, many legal, cultural and procedural obstacles have yet to be overcome before blockchain technology truly gets off the ground. Switching from legacy systems to a new technology involves costs and risks and blockchain still needs to prove itself in practical use cases. Also, business models and regulations need to be redefined. However, banks are indicating that 2017 will be a year of enhanced investment in technology. They recognize the need to do this and have more room to invest due to more favorable interest rate margins and cost cutting programs.
In the longer term, we expect blockchain to have a very important impact. Existing relevant parties will continue to play a role, however. Eventually, blockchain will allow us all to do business more cheaply, more quickly, more safely and more reliably.
We start 2017 with a portfolio that, in our view, strikes the right balance in a world of increasing interest rates and reasonable global economic growth, a world that offers solid growth prospects in emerging finance (especially emerging markets financials), digital finance (especially Fintech companies focused on banks, insurance and asset management IT) and aging finance (especially the life insurers and private equity companies).