Generali has reported that its Generali Investments Sicav (GIS) SRI Ageing Population fund has achieved a +33.70% performance (DX Share) since inception four years ago (to be compared to the lower performance recorded over the same period by the MSCI Europe Net Total Return index, used as an internal comparison index), and over €600m in assets under management.
According to Generali, the investment vehicle has captured for the last four years the investment opportunities offered by the ageing population mega-trend, with a well-diversified client base that includes both retail and institutional investors.
Rationale and investment approach
Once again, this fourth year illustrates that we can deliver good returns while investing in a responsible manner, and we are proud to share this success with more and more clients.”
The ageing of the world's population is an inevitable long-term demographic trend that is greatly affecting societies and economic models. Senior citizens (aged 60 and above) are growing faster than any other segment of the world population and in twenty years' time are expected to account for more than one third of Europe's total population.
As more and more people live longer, and with senior citizens generally having a high purchasing power and different consumption patterns, companies will increasingly have to meet their needs in terms of new products and services.
Some sectors, such as Consumer goods, Health, and Pensions & Savings, are better positioned to benefit directly or indirectly from this demographic shift, and are thus expected to generate above-average returns over the mid to long term.
The GIS SRI Ageing Population fund is managed by Olivier Cassé and Giulia Culot from Generali Investments Partners' Thematic Equity team. According to the financial group, the vehicle's uniqueness lies in the fact that it combines a long term demographic trend as an investment theme, a fundamental equity valuation process and a fully Socially Responsible Investment (SRI) compliant portfolio.
Olivier Cassé and Giulia Culot, portfolio managers of GIS SRI Ageing Population, said: "Once again, this fourth year illustrates that we can deliver good returns while investing in a responsible manner, and we are proud to share this success with more and more clients."
The thematic investment and stock-picking approach focuses on European companies that offer specific products and services for senior citizens, which are set to grow at a faster pace than the rest of the world economy, based on three pillars:
- Consumer goods: seniors consume differently from the general population, notably when it comes to leisure activities, home care and support services. Their buying power benefits to companies with a high-end positioning such as luxury and ‘ageing well' products and services (jewellery, cosmetics, gym equipment,etc)
- Healthcare: seniors are important users of medical treatments and services, benefitting players e.g. in dental implants, oncology, imaging & diagnostics
- Pensions & Savings: seniors possess wealth to be capitalized upon. Insurance companies specializing in life insurance or retirement savings should take advantage of this trend, particularly when pension schemes are increasingly falling short of meeting their needs. The positive performance of the sub-fund over four years illustrates the added value of combining the SRI screening and the careful stock-picking with the thematic approach, to generate outperformance over time.