Anne Le Borgne : “Our international equity thematic fund, Amundi Funds CPR Global Lifestyles aims to tap into the boom in multi-generational well-being.”

Well-being and self-actualisation are structural societal trends whose growth potential CPR AM, a well-regarded thematic manager, wants to tap into.

Interview with Anne Le Borgne, Thematic Equities Portfolio Manager

What is the fund’s philosophy?

Capitalise on the self-actualisation aspirations of individuals in the 21st century – that is what we are seeking to do through our Lifestyles strategy.

Our international equity thematic fund, Amundi Funds CPR Global Lifestyles, for example, aims to tap into the boom in multi-generational well-being.

This is a rich theme that is based on long-term structural trends, such as wealth creation, the expansion in the middle classes in emerging economies, and new consumer trends and shifts in those trends.

How did you identify the theme of “well-being”?

Our idea of targeting well-being goes back to the American psychologist Abraham Maslow, who has shown that individual motivation rises when certain emotional needs are satisfied. Within a pyramid he ranked needs while separating vital needs (food, health and safety) from selfactualisation ones.

He focused on three, emotional needs that are especially important for individual well-being:

• the need to belong to a community: nowadays, millennials (18-35-year-olds born after 1980) exchange and share their experiences through apps or the social networks;
• the need for self-esteem or recognition: for example, through luxury products or sports cars that help one stand out from the crowd;
• the need for personal fulfilment or self-actualisation: the search for new experiences is increasingly prominent with travel, sports entertainment, artistic activities, and so on.

How does this play out in terms of investment opportunities?

Through this theme and its underlying trends, our investment universe is multi-sectorial; it goes well beyond consumption and into leisure, the digital economy, tourism, well-being, transport, luxury goods, financials, sports and sporting equipment.

Meanwhile, the rise of the millennials (18-35-year-olds), who are already more numerous than baby-boomers, offers new modes of consumption. In adopting various lifestyles, these eminent influencers generate investment opportunities, particularly by seeking out new experiences in the form of travel, video games, music, Internet movies, online retailing, etc.

What is your investment process?

Within a broad universe of 400 stocks, we determine our sector allocation on the basis of the economic environment and specific sector indicators, such as tourism flows, consumer confidence surveys, etc.

Within each sector we pay special attention to each company’s strategic vision, which we assess during regular one-on-one meetings with management.

Our analysis also includes a fundamental approach that is based on an analysis of qualitative criteria (the attractiveness of the market on which the company operates, the company’s ability to stand out from the competition, its geographical exposure) and quantitative criteria (valuation, earnings dynamics, analysis of profitability, etc.).
The final portfolio consists of 60 to 100 shares.

What is your current sector and geographical exposure?

As the reforms that Trump promised are taking time being passed, we have reduced our US exposure (to 59% from 63%) and raised our exposure to Europe (to 30% from 21%), where macroeconomic indicators are improving. In self-actualisation activities, we are currently overweighting leisure (25%), which is being driven by solid confidence indicators; luxury (15%), whose sales have rebounded sharply with the improvement in tourist numbers; and tourism (12%), which is being driven by structural growth in flows of travellers. After faring well in the first half of the year with growth sectors, we recently took up positions in lower-priced sectors, such as financials via private banks and asset managers, which should benefit from higher US interest rates and more favourable regulations.

What are the strengths of the Amundi Funds CPR Lifestyles fund for an investor?

Well-being is far more than a mere marketing concept. It’s an actual aspiration for each of us with truly long-term sources of growth.

Our unique approach includes all facets of self-actualisation and not just consumption. It allows us to capture a multitude of investment opportunities while adjusting to economic cycles.

Amundi Funds CPR Global Lifestyles can therefore be a true source of diversification with “happiness as a bonus”.

And in terms of performances?

The fund has gained 6.33% [1] YTD as of end-June, thus outperforming its World Consumer Discretionary index benchmark (+2.83%).

In July 2017 the fund adopted the MSCI World as its new benchmark.