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Targeting customers in the private banking sector

Bankia launches its first fund for investing in 'megatrends'

‘Bankia Megatendences’ is aimed at customers in the private banking segment whose objective is to take advantage of the long-term economic cycle change levers.

Communication Bankia

By  Communication Bankia

Publish on 
30 July 2019 - 14:15

  • The fund seeks to generate value through investments in assets and geographical areas with potential for driving social, political, economic or technological growth with a cross-sector impact
  • It is an international equity fund with no restrictions regarding investee companies’ capitalisation, currency, sector or country

Bankia is launching its first specialised 'megatrends' fund, seeking to generate value through investments in assets and geographical areas with potential for driving social, political, economic or technological growth with a cross-sector impact.

‘Bankia Megatendencias’ is designed for private banking customers who are interested in building wealth through investing in the long-term drivers of economic change, with an investment horizon of at least three years.

“With interest rates at an all-time low, we are aware of the challenges facing asset managers and advisers. The concept of 'megatrends' as a form of long-term investment has arisen against this background. We believe this is the right moment to offer our customers a fund of this type”, says Marta Alonso, Bankia’s Director of Private Banking.

What is a 'megatrend'?

A 'megatrend' is defined as a global force occurring simultaneously across various organisational aspects of society and the economy, driving observable and long-lasting change. 'Megatrends' are behind the new drivers of economic growth. Funds that specialise in 'megatrends' seek to capture this growth, by identifying business models and companies that capitalise on these trends.

The product is a fund of funds (it will invest at least 50% of its assets in other collective investment undertakings) focusing on equity investments (75%-100% exposure to stock markets), with no restrictions regarding investee companies’ capitalisation, currency, sector or country (including emerging markets).

This investment policy gives the fund a risk score of 5 out of 7 with a volatility interval of 10% to 15%.

The fund’s investment adviser will be AFI, working in partnership with Bankia Asset Management to identify trends and sub-trends with investment potential, and analysing the fund segments that best meet the fund's goals.

Megatrends identified

"For this fund, we have identified four blocs of trends which we believe will be key. We have called these Demographic transformation, Emerging countries development, Innovation, and Sustainable planet", explains Pablo Hernández, commercial director of Bankia AM.

The “megatrend” associated with demographic change covers aspects such as ageing populations and their impact on infrastructures and the property market, and on sectors such as health, pharmaceuticals, and biotechnology. There are other demographic transformations that also affect the stock markets, such as urban development, for example.

Emerging economies now account for almost 50% of global GDP and forecasts suggest they will soon cross this threshold. Global equity portfolios, therefore, must adapt to new circumstances and invest in countries with higher growth rates associated with major changes such as consumption by the middle and higher classes.

New technologies represent another key trend, with sectors such as robotics, digitalisation, the internet of things, big data, block chain, fintech, etc. continuing to expand and, in turn, transversely affecting other trends.

Finally, sustainable planet refers to the 'megatrend' related to addressing resource scarcity and the impact of climate change, issues of ever increasing concern to society. The fund will also focus on businesses that encourage the social and workplace integration of all members of society through a strong commitment to social innovation supported by technological solutions.

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