Insync Funds Management (Insync) says views it held last year, that forecasts for equities were overly-pessimistic, are proving valid. ‘Many commentators were too focused on macroeconomic indicators, which are notoriously hard to consistently get right, said Insync CIO, Monik Kotecha. ‘But as we have repeatedly said, it is earnings growth that drives stock prices long term.’ He said those with a ‘top down’ focus, who bought into the negative commentary, would likely have been very defensive and therefore missed the +20% returns available from October’s 2022 lows. ‘A top-down focus overlooked the fact that while share prices broadly fell over most of last year, earnings of highly profitable businesses benefitting from secular megatrends, continued to grow in the double digits,’ Mr Kotecha said. ‘By focusing on a select group of high ROIC businesses – just 30 global businesses across 16 megatrends – we were able to benefit from their inevitable rise in price.’ For the year to June 2023, Insync experienced strong positive returns at 24.5%, outperforming the MSCI benchmark. Importantly, both its funds are meeting their rolling 5-year return fund objectives (against benchmark).
‘Our results reveal that we have identified companies that are beneficiaries of megatrends and able to power right on through recessions,’ Mr Kotecha said. Megatrends are far broader impacting, more durable, and longer lasting than mere themes. They drive profound changes across multiple industries and the businesses within them, that for the right company, act like strong tailwinds on their compounding earnings. ‘The rate of technological change, most dramatically illustrated with the latest advances in generative AI, is an incredibly important ‘super-driver’ of many of our 16 investor-ready megatrends,’ Mr Kotecha said. ‘We believe it will be the next major tectonic shift and the most compelling force powering technological innovation and our lives over the next decade.’
Comentários