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Union Securities Research Team
research@unionsecurities.ch
May 26, 2020
Equity Market Review
Equity Highlights
May 26, 2020 2
Performance
ScheduleImportant Events This Week
Thursday: US Durable Goods Orders, US GDP, US Jobless
Claims, US Crude Oil inventories
Friday: US Wholesale Inventories
Monday: China Caixin, US ISM Manufacturing
Total return performance on both the portfolios and the indices – As of Friday evening
Strategy European Global Leaders
US Global Leaders
Next-Gen Leaders
YtD -19.38% vs -21.25% / 1.87% alpha YtD -8.18% vs -7.77% / -0.41% alpha
Weekly 3.79% vs 5.03% / -1.25% alpha Weekly 3.08% vs 3.27% / -0.19% 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 124.70% vs 75.52% / 49.18% alpha Since Inception 248.82% vs 190.97% / 57.86% alpha
Since August 2011 Benchmark: EuroStoxx 50 Since August 2011 Benchmark: S&P 500
YtD -9.80% vs -13.06% / 3.27% alpha YtD 6.71% vs 8.25% / -1.54% alpha
Weekly 0.58% vs 1.65% / -1.08% alpha Weekly 5.63% vs 2.90% / 2.73% 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 18.00% vs -2.17% / 20.17% alpha Since Inception 74.72% vs 65.05% / 9.66% alpha
Since August 2017 Benchmark: Topix Since July 2017 Benchmark: Nasdaq
European Global Leaders US Global Leaders
Japanese Global Leaders Next-Gen Leaders
Digital Transformation in the age of COVID-19
A number of high profile CEO in the digital world have
expressed a marked optimism regarding the impact of the
COVID crisis on digital transformation.
“Microsoft has seen two years' worth of digital transformation in
just two months” - Satya Nadella, CEO of Microsoft
“The world will likely be in a state of transition over the next 12
to 18 months due to the COVID-19 pandemic. We believe this
will prompt key trends to accelerate, including remote working
models, shift to the cloud, and focus on AI/ML and automation
to drive effective cybersecurity outcomes” - Nikesh Arora, CEO
of Palo Alto Networks
“Our online demand has gone through the roof” - Doug Merritt,
CEO of Splunk
“Digital Payment Services have seen a "tremendous surge" in
demand” – Dan Schulman, CEO of PayPal
“Digital transformation was a business imperative pre-COVID
with $7.4 trillion of projected spend over the next three years.
Post-COVID, digital transformation will accelerate, and
ServiceNow is the workflow standard for digital transformation.”
Bill McDermott – CEO of ServiceNow
May 26, 2020 3
Performance since February 19
Name TickerExch
CodeTheme Perf
Coupa Software COUP US Productivity 31%
Take-Two Interactive TTWO US Media 24%
Paypal PYPL US FinTech 22%
Zalando ZAL GY E-Commerce 20%
Activision Blizzard ATVI US Media 14%
Amazon AMZN US e-Commerce 12%
Match Group MTCH US Media 12%
Electronic Arts EA US Media 9%
Servicenow NOW US Productivity 8%
Facebook FB US Internet Media 8%
Splunk SPLK US Knowledge 6%
Adobe ADBE US Productivity 1%
Apple AAPL US Hardware -1%
Microsoft MSFT US Software -2%
Ubisoft UBI FP Media -3%
Palo Alto Network PANW US CyberSecurity -4%
Square SQ US FinTech -4%
Performance of a few of our favorite digitalization plays during the crisis
Digital Transformation in the age of COVID-19
Many stocks of these stocks have reached a high level and are difficult to chase at these
prices.
Our Next-Gen Leaders fund offer a tailor made product to benefit from transformative
trends with an active management of the risk exposure.
May 26, 2020 4
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28-Feb-20 6-Mar-20 13-Mar-20 20-Mar-20 27-Mar-20 3-Apr-20 10-Apr-20 17-Apr-20 24-Apr-20 1-May-20 8-May-20 15-May-20
Next-Gen Leader NAV (lhs)
Net Equity Exposure (rhs)
Weekly Recap
May 26, 2020 5
Weekly Recap
Market Review
Global Markets rebounded sharply (EuroStoxx 50 +4.9%, S&P 500 +3.2%) as investors welcomed positive
results from the first US Covid-19 vaccine trial and the easing of lockdowns in many major economies.
The top US economic policy leaders offered contrasting outlooks at a congressional hearing, with Mnuchin
favoring a wait-and-see approach to more federal aid and Powell suggesting more would be needed.
Another wave of Americans applied for unemployment benefits last week, extending a swift and severe
deterioration in the labor market and more than 38M Americans have filed applications since mid-March.
Germany and France have joined forces to push for a €500bn EU recovery fund, boosting the effort to
create a coordinated European fiscal response to the coronavirus pandemic.
Asian Equities were down as Trump escalated his rhetoric against China and the outlook for China’s
economy deteriorated, as concerns over the impact of the crisis on global trade outweighed the prospect of
fresh support from central banks.
May 26, 2020 6
European Global Leaders – Weekly Recap
Equity Top News
The strategy had a strong positive performance but underperformed its benchmark.
AstraZeneca said it can produce 1Bn doses of Oxford’s potential COVID-19 vaccine and received a $1Bn
support from the US Biomedical Advanced Research and Development Authority. But company also said
this will not have any significant impact on 2020 revenues.
Vinci rose after the VINCI Construction Grands Projects joint venture has been awarded a €799M contract
by Société du Grand Paris for the construction of package 1 of Grand Paris Express Line 18.
Fresenius jumped strongly after an upgrade to overweight from Morgan Stanley, as it sees that
reimbursements procedures more likely delayed than cancelled and then concerns around its hospital
business could be overdone.
May 26, 2020 7
US Global Leaders – Weekly Recap
Equity Top News
The strategy had a strong positive performance but slightly underperformed its benchmark.
Facebook is launching Shops, a service that puts it in direct competition with Amazon and eBay. It will allow
businesses to display and sell products to its 2.6bn users, allow sellers to create digital storefronts on
Facebook or Instagram, adding that it would benefit by gathering valuable data on what shoppers want.
Amazon is getting ready to return to pre-pandemic operations, including scheduling its annual Prime Dayshopping promotion for the fall and allowing unlimited shipments of nonessential goods to warehouses.
Honeywell launched an integrated set of solutions to help building owners operate more cleanly and safely,
to help minimize potential risks of contamination by monitoring the building environment and comply with
social distancing policies. It also profited as it was raised to buy from hold by HSBC.
Johnson & Johnson, besieged by lawsuits, will stop selling baby powder made with talc in the US and
Canada, citing a decline in customer demand amid safety concerns about one of its most famous products.
Bristol-Myers suffered from the fall of US sales of cancer immunotherapy drugs in April.
May 26, 2020 8
Next-Gen Leaders – Weekly Recap
Equity Top News
The strategy was strongly positive and benefited from the high beta of its components.
Splunk rose despite soft quarterly results as CEO said that cloud business is “going through the roof”. The
earning miss was mostly due to accounting differences in the treatment of cloud products.
Palo Alto surge after quarterly earnings and guidance topped estimates amid strong demand for its security
product for network cloud access. CEO said COVID-19 will prompt key trends to accelerate, including
remote working models, shift to the cloud, and focus on automation.
Take-Two’s earnings beat estimates amid a surge in gaming activity related to Covid-19 stay-at-home
orders. Company warned that the current boom in video-game play may fade after lockdowns end.
May 26, 2020 9
Conviction Portfolios
European Global Leaders
US Global Leaders
Japan Global Leaders
Next-Gen Leaders
May 26, 2020 10
European Global Leaders
May 26, 2020 11
Total Return performance on both the portfolio and the index. The full list of constituents is available on our website.
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European Global Leaders EuroStoxx 50 Total Return
European GL EuroStoxx 50 Delta
Weekly Performance 3.79% 5.03% -1.25%
YtD Performance -19.38% -21.25% 1.87%
1Y Volatility 26.2% 28.8% -2.6%
Perf.since inception 122.8% 75.2% 47.6%
Annualized Perf. 13.7% 9.4% 4.3%
2019 32.1% 29.3% 2.8%
2018 -6.9% -11.3% 4.4%
Volatility 16.2% 20.5% -4.3%
Max Draw Down -36.1% -38.2% 2.1%
Inception Date 31 Aug 2011
European Global Leaders
May 26, 2020 12
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 316.9 Switzerland
Roche ROG SW Pharmaceuticals Health Care 308.7 Switzerland
Novartis NOVN SW Pharmaceuticals Health Care 227.1 Switzerland
LVMH MC FP Luxury Goods Consumer Discretionary 190.2 France
Novo Nordisk NOVOB DC Pharmaceuticals Health Care 156.2 Denmark
L'Oréal OR FP Household Products Consumer Staples 147.9 France
SAP SAP GY Software Information Technology 143.5 Germany
Astrazeneca AZN LN Pharmaceuticals Health Care 134.8 Britain
RDSA (EUR) RDSA NA Big Oil Energy 132.0 Netherlands
Unilever NV UNA NA Food and Household Products Consumer Staples 131.7 Britain
ASML ASML NA Semiconductors Equipment Information Technology 125.2 Netherlands
Total FP FP Big Oil Energy 89.0 France
Inditex ITX SM Apparel Consumer Discretionary 80.0 Spain
Allianz ALV GY Diversified Insurance Financials 72.1 Germany
Volkswagen VOW3 GY Automobiles Consumer Discretionary 69.2 Germany
Kering KER FP Luxury Goods Consumer Discretionary 62.8 France
Schneider Electric SU FP Energy Management Industrials 51.6 France
Essilor EL FP Medical Devices Consumer Discretionary 51.1 France
Heineken HEIA NA Brewers Consumer Staples 48.2 Netherlands
Vinci DG FP Infrastructure Industrials 47.4 France
Dassault Systemes DSY FP Software Information Technology 40.0 France
Philips PHIA NA Health Care Health Care 39.2 Netherlands
AXA CS FP Diversified Insurance Financials 39.1 France
BNP BNP FP Banks Financials 36.9 France
Banco Santander SAN SM Banks Financials 34.7 Spain
Ferrari RACE IM Luxury Goods Consumer Discretionary 29.4 Italy
Intesanpaolo ISP IM Banks Financials 26.1 Italy
Vivendi VIV FP Media Communication Services 25.3 France
Fresenius FRE GY Diversified Health Care Health Care 23.3 Germany
Thales HO FP Defense Industrials 16.0 France
Ubisoft UBI FP Video Games Communication Services 9.2 France
US Global Leaders
May 26, 2020 13
Total Return performance on both the portfolio and the index. The full list of constituents is available on our website.
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US Global Leaders S&P 500 Total Return
US GL S&P 500 Delta
Weekly Performance 3.08% 3.27% -0.19%
YtD Performance -8.18% -7.77% -0.41%
1Y Volatility 32.3% 32.8% -0.5%
Perf.since inception 252.6% 194.4% 58.1%
Annualized Perf. 22.4% 18.9% 3.5%
2019 35.7% 31.5% 4.2%
2018 1.5% -4.4% 5.9%
Volatility 16.7% 17.0% -0.3%
Max Draw Down -32.7% -33.8% 1.0%
Inception Date 31 Aug 2011
US Global Leaders
May 26, 2020 14
Weights within the portfolio are comprised between 2% and 5%
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
May 26, 2020 15
Total Return performance on both the portfolio and the index. The full list of constituents is available on our website.
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Japan Global Leaders Topix Total Return
Japan GL Topix Delta
Weekly Performance 0.58% 1.65% -1.08%
YtD Performance -9.80% -13.06% 3.27%
1Y Volatility 22.3% 20.3% 2.0%
Perf.since inception 18.0% -2.2% 20.2%
Annualized Perf. 8.9% -1.1% 10.0%
2019 31.6% 18.1% 13.5%
2018 -13.0% -16.0% 3.0%
Volatility 20.5% 17.4% 3.1%
Max Draw Down -28.1% -32.2% 4.1%
Inception Date 31 Aug 2017
Japanese Global Leaders
May 26, 2020 16
Weights within the portfolio are comprised between 4% and 15%
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
May 26, 2020 17
Total Return performance on both the portfolio and the index. The full list of constituents is available on our website.
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Next-Gen Leaders Nasdaq 100 Total Return
Next-Gen Nasdaq Delta
Weekly Performance 5.63% 2.90% 2.73%
YtD Performance 6.71% 8.25% -1.54%
1Y Volatility 33.3% 33.5% -0.3%
Perf.since inception 74.7% 65.1% 9.7%
Annualized Perf. 31.9% 28.3% 3.7%
2019 33.5% 39.5% -5.9%
2018 6.9% 0.0% 6.9%
Volatility 26.8% 25.2% 1.5%
Max Draw Down -32.9% -28.0% -4.9%
Inception Date 31 Jul 2017
Next-Gen Leaders
May 26, 2020 18
Weights within the portfolio are comprised between 2% and 5%
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
May 26, 2020 19
CONTACT US
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