As thematic investors we spend our time identifying significant economic trends, and then seeing whether we can find good ways to capitalise upon them.
In our Health theme, there are two clear trends which we’ve been interested in since the foundation of the Fund. The first one is the impact of unhealthy lifestyles, and the second is the ballooning cost of healthcare. Both of these trends are powerful and well-established, and there’s lots of very visible evidence for them.
Amidst the significant moves in equities and bonds over the last month or so, another indicator has been drawing a lot of attention. Crude oil is on a four-month down trend. The Brent benchmark variety has fallen from a high of $115[1] per barrel in June to around $86 as I write. To put this in context, the last time it was as cheap as this was November 2010. So this looks like a relatively historic move.
The auto industry remains a potent part of the global economy. The industry still accounts for around 6% of the industrial output of most OECD economies[i] and employs nine million people directly, with a further 40 million in the industry’s supply-chain[ii]. It is also a highly cyclical sector with passenger car and auto parts production typically swinging higher and falling lower than wider industrial production across the economic cycle. Read more …
Bad design is unsustainable. Products that don’t work, don’t sell, and end up as waste; design flaws can shorten product lives and again consign even good ideas to the scrap heap. Even the very process of designing a new product can itself be very wasteful, as materials and time are spent chasing down blind alleys.
Fortunately today’s industrial designers can use Computer Aided Design (CAD) techniques that replicate real-life product performance in a virtual world, and at a fraction of a cost and time required by traditional methods. We recently commented on our review of the Computer Aided Design (CAD) companies which qualify for investment in our Resource Efficiency theme. One of the leading companies in the space, and which we have recently started a position in, is French company Dassault Systèmes (Dassault).