G Fund World (R)evolutions : Disruption in its broadest sense

What do we think a disruptive company is?

Disruptive companies change dimension, undergoing profound upheaval internally or in an industry via new “disruptive” products or services.

This is the idea of the “S-Curve”.  This theory is based on the fact that a company first experiences a phase of slow growth, followed by a period of growth in which sales and revenues increase rapidly. During this time, a multitude of internal and external factors, such as market saturation, the rising influence of a competitor or poor internal management, can cause growth to decelerate. To ensure that growth remains dynamic and that the company does not enter a deceleration phase, it can evolve its business model, create a new market or transform an existing one.

 

Why invest in disruption?

• Growth potential: Disruptive companies often have significant growth potential. Their innovations can disrupt entire markets, attracting large numbers of customers and generating potentially significant revenues as adoption increases.
• Addressing market needs: Disruptive companies often offer innovative solutions to existing problems or unmet market needs.
• Portfolio diversification: Disruption is not limited to technology, it is present in all sectors.
• Positioning on innovation: Disruptive companies are often at the forefront of technological innovation. Investing in these companies allows investors to support innovative ideas.
• Responding to changing trends: Market trends are constantly evolving, and disruptive companies are often the first to identify and respond to these trends. The companies in G Fund – World (R)Evolutions are driven by 5 major trends: digitalisation, innovation in healthcare, the increasing scarcity of natural resources, the environment and changing consumption patterns.
• Social and Environmental Impact: some disruptive companies are also focusing on social or environmental solutions. Waga Energy, a French company in which the fund has invested, specialises in purifying biogas from landfill sites and converting it into biomethane.

 

Microsoft and OpenAI, the most striking recent example.

By investing in OpenAI, Microsoft can benefit from the company’s expertise in artificial intelligence, particularly in the development of advanced natural language processing models such as GPT (Generative Pre-trained Transformer), which is the technology on which ChatGPT is based.

These technologies are extremely valuable to Microsoft, which can integrate them into its own products and services, such as Microsoft Azure, its cloud computing service, as well as into applications related to artificial intelligence and machine learning. This collaboration strengthens Microsoft’s position as a technology leader and enables it to remain at the forefront of technological advances in a sector that is constantly evolving.

 

Our G Fund – World (R)evolutions at the heart of Disruption.

A conviction-based international equity fund, G Fund – World (R)Evolutions aims to identify those disruptive companies, the leaders of tomorrow, whose growth, driven by major long-term trends, is accelerating. These trends include digitalisation, innovation in healthcare, the increasing scarcity of natural resources, the environment and changes in consumption patterns. The fund has no geographical or sector constraints.

Since the beginning of the year, the fund (NC share class) has outperformed its benchmark index, the MSCI World EUR NR, by 2.7%. This outperformance, which is mainly due to stock-picking, has been driven by a number of technology companies that have published good (or even very good) results and companies that have benefited from the artificial intelligence craze (MongoDB, Broadcom, Cadence Design, ASML, etc.). In healthcare, the fund benefited greatly from Novo Nordisk’s very good prospects for its weight-loss product Wegovy, Pfizer’s acquisition of Seagen and Biogen’s acquisition of Reata Pharmaceuticals.

These examples are provided for illustrative purposes only. This information does not constitute, in whole or in part, an investment advisory service, an offer or a personalised recommendation for the investment products or services presented.

As at 29/09/2023. Past performance is not indicative of future performance.

Source : Groupama AM

 

 

The main risks are :

• Equity risk: Changes in share prices may have a positive or negative impact on the net asset value of the fund.
• Risk of capital loss: There is a possibility that the capital invested may not be returned in full.
• Liquidity risk: Linked to exposure to small- and mid-cap stocks, whose free float may be limited.

 

DISCLAIMER

This is an advertising communication. Please refer to the prospectus and key information document.

This investment involves risks. Before investing, investors should read the fund’s prospectus and key investor information document (KID). These documents, detailing all information on risks and costs, as well as other periodic documents, can be obtained free of charge on request from Groupama AM or at www.groupama-am.com.

Groupama Asset Management accepts no responsibility for any alteration, deformation or falsification of this document. This document is intended solely for the addressees. Any unauthorised modification, use or distribution, in whole or in part, is prohibited. Groupama Asset Management shall not be liable for the use of this document by a third party without its prior written authorisation.

Past performance is no guarantee of future performance. Investment carries a risk of capital loss.

This document contains information relating to a sub-fund of G Fund (“the SICAV”), an undertaking for collective investment (“UCI”) governed by Luxembourg law, falling within the scope of Part I of the law of 20 December 2002 and constituted in the form of a Société d’Investissement à Capital Variable (open-ended investment company). The SICAV is registered with the Luxembourg Trade and Companies Register under number B157527 and has its registered office at 5, allée Scheffer, L-2520 Luxembourg. The marketing of G FUND has been authorised by the Luxembourg Commission de Surveillance du Secteur Financier.

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The information contained in this publication is based on sources that we consider reliable, but we do not guarantee that it is accurate, complete, valid or timely.

This document has been prepared on the basis of information, projections, estimates, expectations and assumptions that involve a degree of subjective judgement. The analyses and conclusions are the expression of an independent opinion, formed from public information available on a given date and following the application of a methodology specific to Groupama AM. Given the subjective and indicative nature of these analyses, they do not constitute any commitment or guarantee by Groupama AM or personalised investment advice.

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