‘It’s been a wild ride’
Semiconductors, healthcare, infrastructure, and energy concerns are now front of mind for investors since COVID-19 brought them into sharper focus
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“Decarbonization over the past few years has garnered a lot of policy support from companies, countries, and states, as well as the tailwind of reducing carbon around the world for the greater good”
Shane Hurst,
ClearBridge Investments
“It’s been an incredible time to manage an energy fund, as it’s been the most volatile period in the history of energy investing. We’ve had the rise and fall of US shale … pivots with OPEC strategy … $100 oil and -$40 oil. It’s been a wild ride”
Eric Nuttall,
Ninepoint Partners LP
Industry experts
Eric Nuttall joined Ninepoint Partners in August 2017, having previously been portfolio manager at Sprott Asset Management LP since February 2003. Nuttall's views are frequently sought after by the Business News Network, the Globe and Mail, the National Post, the Calgary Herald, CNBC, the Wall Street Journal, and, of course, WP. Nuttall graduated with high honours from Carleton University with an bachelor of international business (honours).
Ninepoint Partners
Eric Nuttall
Hans Albrecht oversees Horizons ETFs' suite of technology-focused ETFs, including mandates focused on robotics, artificial intelligence, semiconductors and other emerging technologies. He also co-manages the Horizons ETFs global line-up of covered call ETFs and oversees day-to-day options activities. Prior to joining Horizons ETFs, Albrecht was a floor options market maker and traded a large volatility book for National Bank Financial. He has lectured at Cornell and McGill Universities and appeared on numerous expert derivative panels. Albrecht is a graduate of the University of Oxford, as well as of MIT's fintech and artificial intelligence programs. He completed his MBA at Cornell University.
Horizons ETFs
Hans Albrecht
Alex Gold joined Fidelity International in September 2010 after three years at PwC, where he qualified as a chartered accountant. He spent the initial part of his career covering energy equities, and began covering medical technology stocks in September 2011. Gold successfully covered a heterogeneous and diverse subsector over the next three years, yielding a number of stock ideas included in the Fidelity Funds Global Health Care Fund. He subsequently took on coverage of European Large Cap banks (both retail and investment banking) in 2014 and continued in this role until his appointment as a portfolio manager.
Fidelity International
Alex Gold
Shane Hurst co-manages all global infrastructure strategies at ClearBridge Investments, a Franklin Templeton specialist investment manager, and has 24 years of investment industry experience. Hurst joined a predecessor organization in 2010. Previously, he was director, infrastructure securities, at Hastings Funds Management, as well as portfolio manager and investment analyst at Tribeca Investment Partners and investment analyst at AMP Capital Investors. Hurst earned a master of commerce (advanced finance) degree from the University of New South Wales and a bachelor of business from the University of Technology Sydney.
ClearBridge Investments
Shane Hurst
Shane Hurst
ClearBridge Investments
Alex Gold
Fidelity International
Hans Albrecht
Horizons ETFs
Eric Nuttall
Ninepoint Partners
Industry experts
Eric Nuttall joined Ninepoint Partners in August 2017, having previously been portfolio manager at Sprott Asset Management LP since February 2003. Nuttall's views are frequently sought after by the Business News Network, the Globe and Mail, the National Post, the Calgary Herald, CNBC, the Wall Street Journal, and, of course, WP. Nuttall graduated with high honours from Carleton University with an bachelor of international business (honours).
Ninepoint Partners
Eric Nuttall
Hans Albrecht oversees Horizons ETFs' suite of technology-focused ETFs, including mandates focused on robotics, artificial intelligence, semiconductors and other emerging technologies. He also co-manages the Horizons ETFs global line-up of covered call ETFs and oversees day-to-day options activities. Prior to joining Horizons ETFs, Albrecht was a floor options market maker and traded a large volatility book for National Bank Financial. He has lectured at Cornell and McGill Universities and appeared on numerous expert derivative panels. Albrecht is a graduate of the University of Oxford, as well as of MIT's fintech and artificial intelligence programs. He completed his MBA at Cornell University.
Horizons ETFs
Hans Albrecht
Alex Gold joined Fidelity International in September 2010 after three years at PwC, where he qualified as a chartered accountant. He spent the initial part of his career covering energy equities, and began covering medical technology stocks in September 2011. Gold successfully covered a heterogeneous and diverse subsector over the next three years, yielding a number of stock ideas included in the Fidelity Funds Global Health Care Fund. He subsequently took on coverage of European Large Cap banks (both retail and investment banking) in 2014 and continued in this role until his appointment as a portfolio manager.
Fidelity International
Alex Gold
Shane Hurst co-manages all global infrastructure strategies at ClearBridge Investments, a Franklin Templeton specialist investment manager, and has 24 years of investment industry experience. Hurst joined a predecessor organization in 2010. Previously, he was director, infrastructure securities, at Hastings Funds Management, as well as portfolio manager and investment analyst at Tribeca Investment Partners and investment analyst at AMP Capital Investors. Hurst earned a master of commerce (advanced finance) degree from the University of New South Wales and a bachelor of business from the University of Technology Sydney.
ClearBridge Investments
Shane Hurst
Shane Hurst
ClearBridge Investments
Alex Gold
Fidelity International
Hans Albrecht
Horizons ETFs
Eric Nuttall
Ninepoint Partners
Industry experts
Eric Nuttall joined Ninepoint Partners in August 2017, having previously been portfolio manager at Sprott Asset Management LP since February 2003. Nuttall's views are frequently sought after by the Business News Network, the Globe and Mail, the National Post, the Calgary Herald, CNBC, the Wall Street Journal, and, of course, WP. Nuttall graduated with high honours from Carleton University with an bachelor of international business (honours).
Ninepoint Partners
Eric Nuttall
Hans Albrecht oversees Horizons ETFs' suite of technology-focused ETFs, including mandates focused on robotics, artificial intelligence, semiconductors and other emerging technologies. He also co-manages the Horizons ETFs global line-up of covered call ETFs and oversees day-to-day options activities. Prior to joining Horizons ETFs, Albrecht was a floor options market maker and traded a large volatility book for National Bank Financial. He has lectured at Cornell and McGill Universities and appeared on numerous expert derivative panels. Albrecht is a graduate of the University of Oxford, as well as of MIT's fintech and artificial intelligence programs. He completed his MBA at Cornell University.
Horizons ETFs
Hans Albrecht
Alex Gold joined Fidelity International in September 2010 after three years at PwC, where he qualified as a chartered accountant. He spent the initial part of his career covering energy equities, and began covering medical technology stocks in September 2011. Gold successfully covered a heterogeneous and diverse subsector over the next three years, yielding a number of stock ideas included in the Fidelity Funds Global Health Care Fund. He subsequently took on coverage of European Large Cap banks (both retail and investment banking) in 2014 and continued in this role until his appointment as a portfolio manager.
Fidelity International
Alex Gold
Shane Hurst co-manages all global infrastructure strategies at ClearBridge Investments, a Franklin Templeton specialist investment manager, and has 24 years of investment industry experience. Hurst joined a predecessor organization in 2010. Previously, he was director, infrastructure securities, at Hastings Funds Management, as well as portfolio manager and investment analyst at Tribeca Investment Partners and investment analyst at AMP Capital Investors. Hurst earned a master of commerce (advanced finance) degree from the University of New South Wales and a bachelor of business from the University of Technology Sydney.
ClearBridge Investments
Shane Hurst
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Eric Nuttall
Ninepoint Partners
Hans Albrecht
Horizons ETFs
Alex Gold
Fidelity International
Shane Hurst
ClearBridge Investments
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“Decarbonization over the past few years has garnered a lot of policy support from companies, countries, and states, as well as the tailwind of reducing carbon around the world for the greater good”
Shane Hurst, ClearBridge Investments
“We think the faster-growing, higher-quality parts of the healthcare market are really life science and research companies, which all benefit from increased healthcare and research and development spending”
Alex Gold,
Fidelity International
“It’s been an incredible time to manage an energy fund, as it’s been the most volatile period in the history of energy investing. We’ve had the rise and fall of US shale … pivots with OPEC strategy … $100 oil and -$40 oil. It’s been a wild ride”
Eric Nuttall,
Ninepoint Partners LP
What are semiconductors used in?
Shane Hurst, managing director and portfolio manager at ClearBridge Investments, a Franklin Templeton specialist investment manager, says the fund has 35 companies with 40% turnover, but “we’re very comfortable with the current positioning.”
The fund invests in highly liquid global-listed infrastructure and utility assets, which have stable cash flow and generate stable dividends with an income target of 5% during the cycle. Assets include regulated utilities – airports, roads, and rail companies – 5G communication towers, and companies that sell assets to pension and other funds. Hurst believes the fund is positioned well to take advantage of increased post-COVID mobility and other trends, particularly with the move toward net zero.
Decarbonization is a strong theme for the fund, given that several of its companies are decreasing fossil fuel and electrifying or investing in renewables, such as wind and solar farms. People’s growing concerns about climate change, and the spotlight on COP26, meant the fund has received more attention.
“Decarbonization over the past few years has garnered a lot of policy support from companies, countries, and states, as well as that tailwind of reducing carbon around the world for the greater good,” says Hurst.
The fund has performed very well during COVID, withperformance at three months 7.51%, six months 12.05%, and since launching in Canada 9.24%. Hurst says it’s delivered about 14.4% per year since it began globally, exceeding the indexes globally.
“In terms of the asset flow into the fund, we’ve had about $500 million in the last three years,” says Gold, “some of which is probably driven by the higher-profile nature of healthcare and some by the fact that I’ve been managing the fund now for four and a bit years, so we’ve built a track record.”
The fund has about 50 companies, with a 33% annual turnover. About a quarter of these are big biotech and pharma companies, but Gold says “we think the faster-growing, higher-quality parts of the healthcare market are really life science and research companies, which all benefit from increased healthcare and R&D spending.”
The fund now contains $2.3 billion – of which $200 million is in Canada. It is up 18.3% annualized on a gross basis since 2017, which is 3.85% a year more than the 14.4% rise in the index in the last four years.
It also didn’t experience the same decline as other funds in March 2020, especially as healthcare is being driven by the world’s aging population. About 8% of the global population isnow over the age of 65, and 16% will reach that age by 2050, Gold says, which will mean a higher spend on healthcare. The US currently spends 18% of its GDP on healthcare, while other developed markets spend just 8–9%.
“The pandemic has raised awareness about the importance of diagnostics and funding for research,” Gold says. “So, it’s been helpful in terms of seeing funding increases for research in the US and Europe.”
Investing in the greater good
The Franklin ClearBridge Sustainable Global Infrastructure Income Fund has been running for a decade in other parts of the world, but was launched in Canada on June 17, 2021, in the heart of the pandemic, and now has $4.4 billion in assets under management globally.
“We see these forecasts for a trillion of these new devices to be created over the next 10 years,” he says, “so the sky’s the limit for semiconductors.”
Raising the profile of healthcare
Fidelity International launched its Fidelity Global Health Care Fund in Canada on June 5, 1997. Alex Gold, a portfolio manager at Fidelity International in London, England, has managed it since October 1, 2017, but the he althcare sector has become much more prominent during the pandemic.
countries become more determined to produce their own semiconductors rather than rely on those from Taiwan.
While the shortage of semiconductors during the pandemic has brought this little chip to everyone’s attention, it became most obvious when manufacturers could not keep up with the production of home appliances, automotive parts and electronics because of the semiconductor shortage. Albrecht expects “exponential growth in semiconductors” for all the smart devices coming on to the market, even though the plants are capital-intensive, so take a while to come online.
“As things around us become smarter, more capable, and electronic, semiconductors are literally the foundation for all that,” Albrecht says. “They say data is the new oil. I like to say semiconductors are the new oil, because they literally are the makeup for everything that leads to data in this digital world that we live in.”
The fund (CHPS) has 52 holdings around the world, including some of the biggest names in the field, such as Taiwan Semiconductor Manufacturing Co. Ltd, Nvidia Corp., Applied Materials Inc., and ASML Holdings in the Netherlands. Albrecht has only changed a couple of constituents, even as
“It may be the greatest comeback in the history of Canadian mutual funds,” Nuttall says, noting he pushed sales in every medium he could and is expecting even more interest as the pandemic lifts.
Ninepoints’ energy fund has 15 companies with a high turnover in a volatile market. Returns have been three-year 38.4, index 9.9; five-year 0.8, index -2.7; 10-year 2.2, index -1.8, but Nuttall believes the future path will be less volatile.
“I believe we’re in a multiyear bull market for oil because of the challenges of supply growth. So I think we’ll grow for the next 10 to 15 years, at which point we’ll only slowly fall," he says.
“I don’t understand why more people are not seeing what I’m seeing," he adds. "You just have to connect the dots.”
Why the sky’s the limit for semiconductors
Horizons ETFs launched its Horizons Global Semiconductor Index ETF on June 21, 2021 – amid the pandemic. Less than a year old, it now has $35 million in assets under management. It’s risen from a starting NAV of $25 to $30.78 on December 31, 2021. Portfolio manager Hans Albrecht is pleased with the fund's performance and possibilities, given that “semiconductors are increasingly a part of everything around us.”
That ride continued with the pandemic.
The fund was down as much as 70% at the low in March and April 2020, and ended the year down 22%. He became bullish on oil prices in 2021 and saw $70 by summer. The fund rallied by 187% and became the top-performing energy fund in the world. It dropped from $100 million to $26 million during the pandemic but has now risen to $1.1 billion.
“It may be the greatest comeback in the history of Canadian mutual funds,” Nuttall says, noting he pushed sales in every medium he could and is expecting even more interest as the pandemic lifts.
Ninepoints’ energy fund has 15 companies with a high turnover in a volatile market. Returns have been three-
THE COVID-19 pandemic and its impacts have shaken the world. But many mutual funds have benefited from the attention that has been turned to their investment areas. Semiconductors, healthcare, infrastructure, and energy have risen to the fore during the pandemic – and the following four funds provide an insight into what’s been happening in these sectors.
Greatest comeback of a Canadian mutual fund?
Ninepoint Partners LP launched its Ninepoint Energy Fund in 2005. Eric Nuttall, partner and senior portfolio manager at Ninepoint, has been managing the fund since 2010.
“It’s been an incredible time to manage an energy fund as it’s been the most volatile period in the history of energy investing,” he says. “We’ve had the rise and fall of US shale. We’ve had pivots with OPEC strategy. We’ve had $100 oil and -$40 oil. It’s been a wild ride.”
of the global population
(or 620 million people) were over the age of 65 in 2021
8%
Population megatrend driving healthcare
of the GDP of other developed markets is spent on healthcare
8–9%
of the global population
(or 1.6 billion people) will be over the age of 65 by 2050
16%
of US GDP is currently spent on healthcare
18%
• personal computers
• mobiles and
smartphones
• digital cameras
• televisions
• washing machines
• refrigerators
• automobile sensing,
safety features,
displays, and control
• gaming hardware
• medical equipment
• military systems
• photocells
• LED bulbs
“They say data is the new oil. I like to say semiconductors are the new oil because they literally are the makeup for everything that leads to data in this digital world we live in”
HANS ALBRECHT,
HORIZONS ETFs
“They say data is the new oil. I like to say semiconductors are the new oil because they literally are the makeup for everything that leads to data in this digital world we live in”
“We think the faster-growing, higher-quality parts of the healthcare market are really life science and research companies, which all benefit from increased healthcare and research and development spending”
Decarbonization is a strong theme for the fund, given that several of its companies are decreasing fossil fuel and electrifying or investing in renewables, such as wind and solar farms. People’s growing concerns about climate change, and the spotlight on COP26, meant the fund has received more attention.
“Decarbonization over the past few years has garnered a lot of policy support from companies, countries, and states, as well as that tailwind of reducing carbon around the world for the greater good,” says Hurst.
The fund has performed very well during COVID, withperformance at three months 7.51%, six months 12.05%, and since launching in Canada 9.24%. Hurst says it’s delivered about 14.4% per year since it began globally, exceeding the indexes globally.