A connected watch capable of detecting a heartbeat that is too fast; software offering tailor-made treatment to patients through the analysis of clinical data… Because artificial intelligence (AI) is no longer science fiction, it is already possible to invest in a specialized investment in technology stocks: there are 337 in Europe for a total outstanding amount of 154 billion euros. “There are both funds exclusively invested in the technology sector (software, semiconductors, etc.) and others with a thematic approach, for example on artificial intelligence, robotics and financial services”, describes Mathieu Caquineau, head of equity fund research at Morningstar, who performed these calculations.
On the performance side, these products started the year 2023 with a bang with an average gain of nearly 17% as of May 22. “Corporate investment spending in this area is not weakening despite the economic context, indicates Frédéric Surry, deputy head of equity management at BNP Paribas Asset Management. This is good news for technology stocks whose turnover business increases, but also for their customers because this ultimately translates into productivity gains”. But this improvement is far from erasing the 32% decline in 2022. “These values suffered greatly last year from the rise in the ten-year American interest rate”, continues Frédéric Surry. Since then, rates have fallen slightly.
A journey that looks like a roller coaster
This roller coaster-like course is usual for this sector. “The volatility of these funds is 20 to 25% higher than that of the international equity index, the MSCI World, notes Mathieu Caquineau. This is why it is recommended to invest over the long term to smooth out the market shocks, and only in portfolio diversification.”
© / The Express
These precautions taken, here are three growing themes:
Artificial intelligence (AI)
Management companies did not wait for the launch of ChatGPT in November 2022 to offer funds specializing in this theme. “Artificial intelligence is a silent revolution that affects both software and semiconductors to design AI, but also the beneficiaries of these innovations in health, media, automotive or financial services” summarizes Brice Prunas, manager of the Oddo BHF Artificial Intelligence fund at Oddo BHF Asset Management. If OpenAI, the company behind ChatGPT, is not listed on the stock exchange, the managers nevertheless seek to take advantage of the extraordinary success of this robot. “Microsoft has invested heavily in OpenAI, says Brice Prunas. It’s one of the three main positions in our fund, which is a way for us to take advantage of the ChatGPT tidal wave.”
The manufacturer of graphics processors Nvidia, which provides the technological block (semiconductor, network, software, etc.) essential to the development of robots of the ChatGPT type, has also benefited from the enthusiasm for generative AI, since its price soared by around… 100% since the start of the year. Although targeting stocks linked to data in the broad sense, the EDR Big Data fund at Edmond de Rothschild Asset Management is also riding the wave of artificial intelligence. “Data is the strategic asset par excellence because it feeds AI, explains Jacques-Aurélien Marcireau, its manager. The big winners of this revolution will be found in traditional sectors such as health or finance: they will be able to create more performance of AI robots with their own data.”
The robotics
Axa Investment Managers, Candriam, Pictet Asset Management and Financière de l’échiquier manage funds specializing in robotics companies. “Our portfolio includes 50% of technology stocks such as semiconductors and software; the rest is mainly divided between industrial sectors, health and consumption” indicates Rolando Grandi, manager of Echiquier Robotics at Financière de L’échiquier. . The turnover of the securities in the portfolio should increase by 12% per year on average for the next three years, well above the 7% of the Nasdaq index, mainly focused on the Internet and smartphones. Mergers and acquisitions should continue to drive the sector as in 2022, which constitutes a factor of added value for the funds holding the acquired securities. “Our Pictet Robotics fund benefited from several operations last year with the acquisition of Xilinx, iRobot and Zendesk,” confirms Anjali Bastianpillai, product specialist at Pictet Asset Management.
innovation
Some thematic funds opt for innovation. This is notably the case of BNP Paribas Disruptive Technology, which invests in artificial intelligence, robotics, clouds, automation or the Internet of Things. The portfolio is certainly diversified across many sectors of activity, but information technologies largely dominate since they alone represent 78% of assets, with stocks such as Microsoft, Apple, or even Alphabet, the parent company of Google.
The Pictet Digital fund is also focused on innovations, particularly those related to daily life, for example in e-commerce, software, online advertising, clouds, social networks, e-learning, interactive health care or even video games. The United States represents 66% of the portfolio, China 15% and Europe less than 5%. “We are looking for dominant companies, able to set their prices and whose customers can hardly do without, relates Anjali Bastianpillai. However, these are mainly American and, to a lesser extent, Chinese.” An alert for the Old Continent.