Equity Market Review · 28.01.2020 · Union Securities Research Team [email protected]...

Union Securities Research Team

[email protected]

January 28, 2020

Equity Market Review

Equity Highlights

January 28, 2020 2

Performance

ScheduleImportant Events This Week

Tuesday: US Durable Goods Orders, Apple Earnings

Wednesday: US Wholesale Inventories, US Crude Oil Inventory,

US FOMC

Thursday: BOE Meeting, US Jobless Claims, US Crude Oil

Inventory

Friday: EU GDP

Total return performance on both the portfolios and the indices

Strategy European Global Leaders

US Global Leaders

Next-Gen Leaders

YtD 1.75% vs 1.08% / 0.67% alpha YtD 2.25% vs 2.10% / 0.15% alpha

Weekly -0.66% vs -0.72% / 0.06% alpha Weekly -1.43% vs -1.01% / -0.42% alpha

2019 32.10% vs 29.34% / 2.76% alpha 2019 35.66% vs 31.49% / 4.17% alpha

2018 -6.90% vs -11.26% / 4.36% alpha 2018 1.48% vs -4.39% / 5.86% alpha

Since Inception 183.59% vs 125.28% / 58.30% alpha Since Inception 288.43% vs 222.12% / 66.31% alpha

Since August 2011 Benchmark: EuroStoxx 50 Since August 2011 Benchmark: S&P 500

YtD 2.19% vs 0.53% / 1.67% alpha YtD 6.35% vs 4.71% / 1.64% alpha

Weekly 0.49% vs -0.29% / 0.78% alpha Weekly 0.23% vs -0.35% / 0.58% alpha

2019 31.59% vs 18.10% / 13.49% alpha 2019 33.55% vs 39.46% / -5.91% alpha

2018 -12.99% vs -16.04% / 3.05% alpha 2018 6.92% vs 0.01% / 6.91% alpha

Since Inception 33.69% vs 13.12% / 20.57% alpha Since Inception 74.13% vs 59.65% / 14.48% alpha

Since August 2017 Benchmark: Topix Since July 2017 Benchmark: Nasdaq

European Global Leaders US Global Leaders

Japanese Global Leaders Next-Gen Leaders

European Global Leaders – Weekly Recap

Market Wise

The EuroStoxx slid over the week on worries over China’s coronavirus.

US President Trump and French President Macron reached a truce in their digital tax dispute that means

neither side will impose punitive tariffs this year. President Trump also said he expects a deal with Europe

on auto tariffs.

ECB President Christine Lagarde said investors shouldn’t assume that current monetary policy is locked in

for the foreseeable future just because officials are focused on reviewing their strategy, a day after

announcing a reappraisal of the ECB’s inflation goal and policy tools.

The strategy outperformed its benchmark.

Alpha Wise

Ubisoft rose after positive reports of Oddo and as Morgan Stanley’s analysts kept a Buy rating and

increased the price target. They considered the company’s lineup of games for fiscal 2021 looks particularly

promising.

Dassault Systemes rose after Deustche Bank changed its price target to €150, from €126, and as the FY20

sales forecast is above €5bn, helped by Medidata acquisition, after reached €4bn only one year ago.

Kering and LVMH tumbled with the luxury sector as the spread of the Coronavirus disease in China

threatened consumer spending in the region.

Banco Santander slid as analysts reported that margins were still under pressure, putting upward pressure

on future earnings.

Heineken dropped after a report announced that beer sales in Vietnam have dropped by at least 25% since

strict penalties on inebriated drivers took effect on January 1st.

January 28, 2020 3

US Global Leaders – Weekly Recap

Market Wise

US Markets were flat until Thursday, but then tumbled on worries over China’s coronavirus, after reports

indicating mounting evidence of its contagiousness among humans, and a possible outbreak.

Exporters and luxury goods stocks, with the energy sector, slid with concerns of China’s economic downturn.

The strategy underperformed its benchmark.

Alpha Wise

Costco broke out after analysts upgrade, as they estimated the recent underperformance has created an

attractive entry point and believed it will beat its competitors in 2020. JPMorgan analyst also saw a high

probability of a special dividend given the company’s $9bn in cash.

Chevron and Exxon Mobil dropped with the energy sector and commodity prices as China’s shutdown is

expected to weight on the country’s economic activity.

Johnson & Johnson slid after its 4Q sales trailed estimates, as some former blockbusters continued to

decline in the face of new competition and as its baby-care business stumbled.

January 28, 2020 4

Next-Gen Leaders – Weekly Recap

Market Wise

Technology stocks rallied on the back of upbeat earnings and after the US and France struck a deal on a

global framework for digital taxation.

The strategy strongly outperformed its benchmark.

Alpha Wise

Autodesk rose after an upgrade from Hold to Buy by Deutsche Bank analysts, as they estimated that

software and IT services spending will remain solid in 2020, and that moving core systems to the cloud and

IoT will become a major spending item.

Intuitive Surgical slid despite a beat in quarterly earnings as company projected a decline of gross margin in

2020 (from 71.7% to 70%-71%) on higher sales of newer products. Sales were inflated by shipments into

China as some hospitals accelerated purchases to avoid tariffs while sales in Europe disappointed.

Take-Two dropped as it was downgraded by analysts to Neutral from Buy, as the lack of visibility into the

content pipeline increases, even if it is expanding. They also reported that consensus estimates are too high.

January 28, 2020 5

Conviction Portfolios

European Global Leaders

US Global Leaders

Japan Global Leaders

Next-Gen Leaders

January 28, 2020 6

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European Global Leaders EuroStoxx 50 Total Return


January 28, 2020 7

Total Return performance on both the portfolio and the index. The full list of constituents is available on our website.

European GL EuroStoxx 50 Delta

Weekly Performance -0.66% -0.72% 0.06%

YtD Performance 1.75% 1.08% 0.67%

1Y Volatility 11.6% 12.4% -0.9%

Perf.since inception 183.6% 125.3% 58.3%

Annualized Perf. 18.9% 14.5% 4.5%

2019 32.1% 29.3% 2.8%

2018 -6.9% -11.3% 4.4%

Volatility 14.3% 18.7% -4.4%

Max Draw Down -18.7% -27.8% 9.1%

Inception Date 31 Aug 2011


January 28, 2020 8

Weights within the portfolio are comprised between 2% and 5%

Name TickerExch

CodeTheme Sector Mkt Cap ($bn) Country

Nestlé NESN SW Food Products Consumer Staples 320.2 Switzerland

Roche ROG SW Pharmaceuticals Health Care 285.7 Switzerland

LVMH MC FP Luxury Goods Consumer Discretionary 243.1 France

Novartis NOVN SW Pharmaceuticals Health Care 240.1 Switzerland

RDSA (EUR) RDSA NA Big Oil Energy 234.5 Netherlands

L'Oréal OR FP Household Products Consumer Staples 167.6 France

SAP SAP GY Software Information Technology 167.5 Germany

Novo Nordisk NOVOB DC Pharmaceuticals Health Care 149.9 Denmark

Unilever NV UNA NA Food and Household Products Consumer Staples 148.6 Britain

Total FP FP Big Oil Energy 140.9 France

Astrazeneca AZN LN Pharmaceuticals Health Care 134.0 Britain

ASML ASML NA Semiconductors Equipment Information Technology 128.8 Netherlands

Airbus AIR FP Aerospace Industrials 117.2 France

Inditex ITX SM Apparel Consumer Discretionary 108.8 Spain

Allianz ALV GY Diversified Insurance Financials 101.1 Germany

Volkswagen VOW3 GY Automobiles Consumer Discretionary 99.6 Germany

Kering KER FP Luxury Goods Consumer Discretionary 83.7 France

BNP BNP FP Banks Financials 71.0 France

Essilor EL FP Medical Devices Consumer Discretionary 69.3 France

Vinci DG FP Infrastructure Industrials 67.8 France

Banco Santander SAN SM Banks Financials 66.4 Spain

Safran SAF FP Aerospace & Defense Industrials 66.3 France

AXA CS FP Diversified Insurance Financials 65.2 France

Heineken HEIA NA Brewers Consumer Staples 64.5 Netherlands

Dassault Systemes DSY FP Software Information Technology 45.9 France

Philips PHIA NA Health Care Health Care 44.7 Netherlands

Vivendi VIV FP Media Communication Services 33.3 France

Ferrari RACE IM Luxury Goods Consumer Discretionary 32.1 Italy

Fresenius FRE GY Diversified Health Care Health Care 30.0 Germany

Thales HO FP Defense Industrials 22.9 France

Ubisoft UBI FP Video Games Communication Services 8.7 France

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US Global Leaders S&P 500 Total Return

US Global Leaders

January 28, 2020 9


US GL S&P 500 Delta

Weekly Performance -1.43% -1.01% -0.42%


1Y Volatility 11.9% 11.6% 0.3%



2019 35.7% 31.5% 4.2%

2018 1.5% -4.4% 5.9%

Volatility 13.4% 13.6% -0.3%

Max Draw Down -18.8% -19.4% 0.6%


US Global Leaders

January 28, 2020 10


Name TickerExch

CodeTheme Sector Mkt Cap ($bn)

Apple AAPL US Hardware Information Technology 1364.9

Microsoft MSFT US Software Information Technology 1244.9

Alphabet GOOGL US Internet Media Communication Services 992.6

Amazon AMZN US e-Commerce Consumer Discretionary 923.2

Facebook FB US Internet Media Communication Services 630.7

Berkshire Hathaway BRK/B US Investment Company Financials 558.3

JP Morgan JPM US Banks Financials 428.8

Visa V US Payment Technology Information Technology 393.3

Johnson & Johnson JNJ US Pharmaceuticals Health Care 386.9

Mastercard MA US Payment Technology Information Technology 317.0

Bank of America BAC US Banks Financials 306.3

Exxon XOM US Big Oil Energy 292.3

AT&T T US Big Telco Communication Services 276.6

Walt Disney DIS US Media & Entertainement Communication Services 260.1

Verizon VZ US Telcos Communication Services 244.4

Merck & Co MRK US Pharmaceuticals Health Care 233.1

Chevron CVX US Big Oil Energy 219.6

Pepsico PEP US Food Products Consumer Staples 194.1

Citigroup C US Banks Financials 171.7

Adobe ADBE US Software Information Technology 166.0

Nike NKE US Apparel Consumer Discretionary 160.1

McDonald's MCD US Restaurants Consumer Discretionary 158.0

Medtronic MDT US Medical Devices Health Care 157.3

Bristol Myers BMY US Pharmaceuticals Health Care 155.9

Costco COST US Mass Merchants Consumer Staples 132.9

Accenture ACN US IT Services Information Technology 131.8

Honeywell HON US Diversified Industrials Industrials 129.1

Starbucks SBUX US Restaurants Consumer Discretionary 108.1

Goldman Sachs GS US Banks Financials 90.4

Japanese Global Leaders

January 28, 2020 11


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Japan Global Leaders Topix Total Return

Japan GL Topix Delta

Weekly Performance 0.49% -0.29% 0.78%


1Y Volatility 14.6% 12.6% 2.1%



2019 31.6% 18.1% 13.5%

2018 -13.0% -16.0% 3.0%

Volatility 18.1% 14.6% 3.5%

Max Draw Down -26.1% -24.4% -1.6%


Japanese Global Leaders

January 28, 2020 12


Name TickerExch

CodeTheme Sector

Mkt Cap

($bn)

Toyota Motor 7203 JT Automobiles Consumer Discretionary 228.0

Softbank Group 9984 JT Technology Conglomerate Communication Services 92.6

Sony 6758 JT Consumer Electronics Consumer Discretionary 91.8

Keyence 6861 JT Factory Automation Information Technology 86.8

Recruit Holdings 6098 JT Human Resources Industrials 65.3

Nintendo 7974 JT Video Games Communication Services 51.4

Nidec 6594 JT Precision Motors Industrials 41.0

Kao 4452 JT Household Products Consumer Staples 40.0

Shiseido 4911 JT Cosmetics Consumer Staples 28.6

Terumo 4543 JT Medical Devices Health Care 27.3

Komatsu 6301 JT Construction Machinery Industrials 23.2

Next-Gen Leaders

January 28, 2020 13


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Next-Gen Leaders Nasdaq 100 Total Return

Next-Gen Nasdaq Delta

Weekly Performance 0.23% -0.35% 0.58%


1Y Volatility 17.0% 15.1% 1.8%



2019 33.5% 39.5% -5.9%

2018 6.9% 0.0% 6.9%

Volatility 21.1% 18.3% 2.7%

Max Draw Down -27.1% -22.7% -4.3%

Inception Date 31 Jul 2017

Next-Gen Leaders

January 28, 2020 14


Name TickerExch

CodeGroup Theme Category Sector Risk Category

Mkt Cap

($bn)Country

Palo Alto Network PANW US B2B CyberSecurity Firewalls Information Technology Core 23.6 United States

CyberArk Software CYBR US B2B CyberSecurity Priviledged Access Information Technology Speculative 5.2 Israel

Illumina ILMN US B2B Health Care Diagnostics Health Care Core 47.1 United States

Stryker SYK US B2B Health Care Surgical Robot Health Care Core 77.4 United States

Intuitive Surgical ISRG US B2B Health Care Surgical Robot Health Care Core 69.0 United States

Cap Gemini CAP FP B2B Knowledge Consulting Information Technology Core 21.7 France

Splunk SPLK US B2B Knowledge Data Analysis Information Technology Speculative 24.3 United States

CoStar Group CSGP US B2B Knowledge Information Industrials Core 23.8 United States

IQVIA IQV US B2B Knowledge Pharmaceutical Research Health Care Core 30.9 United States

IHS Markit INFO US B2B Knowledge Research & Analytics Industrials Speculative 31.8 Britain

Gartner IT US B2B Knowledge Research & Analytics Information Technology Core 14.2 United States

Adobe ADBE US B2B Productivity Creativity & Design Information Technology Core 166.0 United States

Dassault Systemes DSY FP B2B Productivity Creativity & Design Information Technology Core 45.9 France

Autodesk ADSK US B2B Productivity Creativity & Design Information Technology Core 42.0 United States

Ansys ANSS US B2B Productivity Creativity & Design Information Technology Core 22.6 United States

Trimble TRMB US B2B Productivity IoT Information Technology Core 10.6 United States

Salesforce.com CRM US B2B Productivity SaaS - Productivity Information Technology Core 160.6 United States

Servicenow NOW US B2B Productivity SaaS - Productivity Information Technology Core 57.5 United States

Workday WDAY US B2B Productivity SaaS - Productivity Information Technology Core 41.2 United States

Coupa Software COUP US B2B Productivity SaaS - Productivity Information Technology Speculative 10.8 United States

Zalando ZAL GY B2C E-Commerce Retail Consumer Discretionary Speculative 13.2 Germany

Paypal PYPL US B2C FinTech Payment Technology Information Technology Core 134.9 United States

Square SQ US B2C FinTech Payment Technology Information Technology Speculative 30.2 United States

Wirecard WDI GY B2C FinTech Payment Technology Information Technology Speculative 17.7 Germany

Match Group MTCH US B2C Media Social Communication Services Speculative 25.5 United States

Activision Blizzard ATVI US B2C Media Video Games Communication Services Core 45.8 United States

Electronic Arts EA US B2C Media Video Games Communication Services Core 32.0 United States

Take-Two Interactive TTWO US B2C Media Video Games Communication Services Core 14.4 United States

Ubisoft UBI FP B2C Media Video Games Communication Services Speculative 8.7 France

Contacts

January 28, 2020 15

CONTACT US

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January 28, 2020 16

Equity Market Review · 28.01.2020 · Union Securities Research Team [email protected]...

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Transcript of Equity Market Review · 28.01.2020 · Union Securities Research Team [email protected]...