fiducian technology fund fiducian india fund · we believe tech investments should focus on...
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Fiducian Technology FundFiducian India Fund
Presented by
Indy Singh
Executive Chairman, Fiducian Group
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The Fiducian Technology Fund
A great opportunity to own companies, which if they deliver on their promise could forever change the way we live and bring substantial gains to investors. Be part of it now or forever hold your peace…..
Fund exposure 30% Biotech and 70 % Other-Tech
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Technology is the competitive advantage of the West- Investing in a pure technology play is investing in the future
The future will largely be dictated by “BRAIN”
• Bio Technology
• Robotics
• Artificial Intelligence
• Nanotechnology
Biotech Team: Boston and London
Other Global Tech Team: Boston, Singapore, Tokyo
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Strong earnings growth is keeping the PE ratio low- Tech is not expensive today
Source: Wellington Management
Tech Wreck
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Three New Treatment Modalities
Coming decade should witness a host of wonderful new drugs and novel treatment modalities based on Gene Manipulation
• Gene Therapy: Delivers genetic instructions to patients cells to reverse harmful effects of a defective gene and produce more of the missing factor. Limited ability E.g. Haemophilia, lack of blood clotting. Eyes, blood, liver.
• Gene Editing using CRISPR system: Less disruptive that Gene Therapy and corrects or replaces an inborn genetic error by replacing or deactivating a harmful gene causing the disease. In its infancy, but rapid advancement expected
• Cell Therapy: Healthy body cells are re-engineered by changing their genetic code and turning them to cancer fighting machines i.e. Immuno-oncology. Approved by FDA in 2017. Market upwards of US$ 60 billion
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Biotech innovations coming thick and fast- the FDA has streamlined the approvals process
Source: Wellington Management
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Small – Mid Cap Stock Holdings for Future Growth
Next-Gen Cancer
Blueprint – developing targeted small molecule therapeutics for the treatment of specific genetic cancers
Seattle Genetics – developing treatments for cancer to precise anatomical locations
Rare diseases/Gene therapy
Bluebird Bio – focused on gene therapy for Sickle Cell Disease (production of abnormal hemoglobin) and cancer of the blood
Ultragenyx – focused on bringing novel products for treatment of rare and ultra-rare diseases e.g. respiratory and heart failure
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Fiducian Biotech Portfolio Construction Philosophy
• Technology assessment is a key to successful biotech investing and is the area for greatest potential differentiation
• Early entry into smaller companies at clinical trial stage with a compelling business model: just one successful drug can create a very large company
• Do not chase. If a good one gets away, let it go.
Biopharma Company Market Cap % of portfolio % of NASDAQ
Biotech Index
Large cap > US$10billion 26 44
Mid cap US$ 5 to 10billion 13 18
Small Cap US$ 1 to 5billion 39 20
< US$ 1billion 17 7
Medical Technology 1 9
Healthcare Services 0 2
Cash 4 0No. Of Stocks 57 220
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Technology Evolves 24/7. It waits for no one
The photo is a hard disk drive with 5 MB of storage in 1956
It would take 3200 of these units to equal the capacity of a little 16-Gig stick plugged into the side of a PC
Evolution of the telephone 150 years
First Flight 1903……. ……Man on the Moon 1969…….Next Mars
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Robotics - Flextronics Inc.
Flextronics Inc. – Real-time supply chain insight and logistics services to Medical, Automotive, and Industrial companies
Laser cutting technology leading to 50% decline in waste materials during production process
Robotics use will adversely impact current production in low cost countries
Medical, Industrial, Space, Military and Home Use
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Long term computer growth sectors for Fiducian
We believe tech investments should focus on long-tailed secular growth areas such as:
Artificial intelligence Internet of Things
Machine learning Mobile wallets
Block chain The cloud
Focus on pure technology plays where >80% of revenue
is driven by Fintech
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Game Changer Stock Holdings
5G connectivity
China Tower – real estate tower operator in China
• China will likely lead the world in 5G trials and rollout since the Huawei ban
• China Tower differs from every tower operator in the world. It can use state owned infrastructure
(utility poles, street furniture, etc.) and private buildings.
Marvell Technology
• Marvell is one of the most levered plays to 5G network
• There will be 4x the amount of semiconductor content in 5G base stations vs 4G – Marvell has
contracts to supply to Samsung, Nokia and Ericsson
Renewable Energy
First Solar – manufactures photovoltaic CdTe solar power systems (cost on par with traditional
energy sources but higher efficiency)
• Solar is 1% of energy generation today, but forecast to be over 25-30% in 15 years
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Game Changer Stock Holdings
Fintech
Global Payments – provider of payment technology and software solutions
• Roughly US$17 trillion in payments worldwide still use cash and checks, but digital transactions are now growing five times faster than other methods.
Guidewire Infrastructure – provides software products for property and casualty insurers worldwide.
• Most technology used by an insurance company is 1980’s developed and needs to be replaced with predictive analytics and CRM.
Nexon – Korean company benefitting from the shift of gaming from PC to mobile
Cloud Computing
• Workday – enterprise cloud applications, for finance and human resources
.
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Fiducian Global Technology Opportunities Portfolio Structure
MSCI AC World Custom
Technology
Size Portfolio Benchmark
Over USD 50 bil (%) 42 72
USD 20 – 50 bil (%) 18 16
USD 10 – 20 bil (%) 20 7
USD 2 – 10 bil (%) 17 5
Under USD 2 bil (%) 3 0
Projected EPS growth (5-yr, %) 17 14.4
Number of stocks held 57 304
% in non-US domiciled – total (%) 17 25.5
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Fiducian Technology Fund Performance The smart money has found it already
Target eps growth 13% to 15% pa
2020
An Active Multi Manager Fund to Capture the entire breadth of the Indian Stock Market
117 securities
Fiducian India Fund
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• Compound annual return of 17% over the 5 years to end-April 2019
• The market can be volatile
• the market rose 41% in 2014, fuelled by Modi’s election (BJP Party)
• the market rose only 1% in 2015 and 2% in 2016
• the market then rose 28% in 2018
• the market fell 11% in 2018
• the market rose 4% over the 4 months to end-April 2019 (with much volatility in between)
• Our fund out-performed the index by 3% per annum over the 5 years to end-April 2019
• Our fund lagged the index over the 1 year period to end-April 2019
• this recent under-performance has been due to under-performance by the small and mid-cap sectors
• these sectors are expected to revive in the near future, particularly with Modi back in power
Fiducian India Fund
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Multi Manager Multi Style % Weight
State Bank of India Large-Cap 17
Sundaram Mid & Small-Cap 42
HDFC Large & Mid-Cap 18
Tata Large, Mid & Small-cap 22
• Only blended fund available with broad exposure to mid-caps and small-caps as well as large caps
Fiducian India Fund
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• India adds c10 million to the work force each year and
• Contributes c18% to 19% of the global working age population
• Making India world's biggest supplier of work force by 2030
Source: UN Data, Jefferies
India to have world’s largest workforce by 2030
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• World’s largest democracy with high proportion of English speakers
• Favourable demographics: young, growing middle-class consumers
• Sustainable high GDP-growth economy growing by over 7% pa. Government
aware of importance of fiscal management
• Potentially the 4th largest GDP nation by 2025 and 3rd by 2030
• Resilient to global economic shocks: largely domestic-consumption driven
• Huge infrastructure spend adds to economic growth: US$ 1.7 trillion in projects,
plus US$ 1.5 trillion for roads to villages
• Compelling corporate earnings growth prospects
• Showcasing technological capability – Moon Lander
India facts
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MSCI Earnings Growth Rate Forecast
4%2%
14%
24%
8%
-5%
33%
8%
3% 3% 2%1%
18%
0%
10% 11%10%
6%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
India Australia World USA Europe Japan
MSCI Earnings Growth Rate
2018A 2019E 2020E Source: Yardeni Research, Inc.
When Global Earnings Growth is likely to be in low single digits over
the next year or so, the Fiducian Technology and India Funds can
support and generate long-term wealth for your clients.
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Fiducian Growth Fund
Ausbil
L1 Capital
Pendal (BT)
Fidelity
Solaris
Bennelong
Blackrock
Franklin
Wellington Global Research
Wellington TechnologyWellington Biotechnology
Vanguard Emerging Markets
SSgA Global Index Plus
SBISundaram
HDFCTata
iShares
Phoenix
Principal
iShares Australian Bonds
Perpetual Australian Bonds
iShares Inflation Bonds
iShares Global BondsANZ CMS
Blackrock Cash
Australian Shares
Global Shares
Property Securities
Bonds
Cash
25 Fund Manager Portfolios – Manage the Manager System
Fiducian Growth Fund Performance
6mth 1yr 2yr 3yr 4yr 5yr 6yr 7yr 8yr 9yr 10yr
Return 15.7% 7.5% 10.3% 10.6% 9.2% 10.0% 10.8% 12.1% 10.0% 9.9% 10.1%
Rank 4/195 66/193 3/178 1/173 1/168 1/167 1/165 1/161 3/151 3/135 3/130
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Disclaimer
Information in this document and given in the presentation is of a general nature.It is not intended to be, nor does it, constitute financial, legal or tax advice. The information is given in good faith and, although care has been exercised in compiling it, Fiducian Group Limited and the other members of the Fiducian Group (Fiducian) neither represent nor warrant that the information is free of errors, omissions or inaccuracies.
Fiducian takes no responsibility for losses suffered by a person relying on the information except for statutory liability that cannot be excluded.
Do not rely on this information without first seeking professional advice based on your own personal circumstances, objectives, financial situation or needs.
The information was prepared on 1 August 2019.