Riding the wave: thematic investing in the Trump era
A locally-managed thematic fund is showing early signs of promise although US President Trump’s market-moving rhetoric is helping keep its manager on his toes.
Thursday, February 27th 2025, 6:57AM
by Kim Savage
A locally-managed thematic fund is showing early signs of promise although US President Trump’s market-moving rhetoric is helping keep its manager on his toes.
After 10 years at Kiwi Wealth, Nathan Field joined Generate in 2023 as Global Equities Portfolio Manager. The role sees him managing the company’s thematic fund, made up of 100% global equities, which has a recommended investment timeframe of 10 years attached.
It’s early days and volatility is to be expected, the fund manager says, but in the 12 months to the end of January, it delivered a return of 32.2%, compared to the benchmarked market index which had a return of 27.2% for the same period.
“We are looking for stuff that's not necessarily in a financial statement or is going to be spit out of a spreadsheet,” says Nathan Field.
“We're looking for shifts in consumer tastes and new technological trends.”
Themes like developments in AI, resurgence in travel spending, interest rate cycles, as well as other macro and micro-economic trends help to influence the portfolio mix, based on how they might affect corporate earnings.
One uncertainty is US President Donald Trump and the effects of his seemingly snap decision-making on markets, but it just adds to the challenge for active managers like Nathan Field.
“It’s not a one-size-fits all strategy when it comes to him. A lot of it can be ignored, and a lot of it creates volatility, which is an opportunity for us,” he says.
“If a stock sinks because it's exposed to tariffs, you know, we will take a good look at perhaps buying that dip, because, as we know, Trump likes making deals, and then next week, he might move the tariffs.
“He creates as many opportunities as he tanks.”
The fund’s mission is to outperform the market over the long term. On an annual basis, Nathan Field expects it to outperform some years but admits there’ll be others where they get it wrong. Reading the tea leaves is no 9-5 job and even downtime counts towards research.
“We read tech technology blogs, media blogs. We go to a lot of conferences in the US, just to hear a bunch of companies talking and to see if there's any commonality. Are they all talking about a similar trend or a similar scene which could be the next big thing this year?”
“Even watching Netflix, seeing as we own Netflix stock, watching their live sports stream. It's going to be a new, big, new revenue driver for them. And so watching a football game can be research as well.”
Generate is now preparing to launch a KiwiSaver version of its thematic fund, allowing members to tap into the same global trends.
“It’s a chance to invest in the big trends that they read about in the newspaper, whether it be weight loss drugs, or the growth in data centers or even the growth in cruise ships.
“One of our one of our best themes of late has been that the aging population has always loved cruising, but it's now appealing to younger people, and so cruise ships have been doing remarkable business post COVID.
“These are things that people pick up when they're reading magazines or newspapers, and we're directly invested in those trends and themes,” says Nathan Field.
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