Amundi Age Trend Mixed Fund of Funds
INVESTMENT OPPORTUNITY INHERENT IN THE AGEING OF THE POPULATION
Has it ever occurred to you that, beyond the perceivable problems, population ageing hides opportunities as well? The proportion of elderly people keeps rising; moreover, this growth trend is seen to accelerate.1 An increasingly significant part of the economy deals with serving the needs of elderly people, offering an excellent investment opportunity. This is what Amundi’s new fund, the Amundi Age Trend Mixed Fund of Funds (the “Fund”) seeks to leverage.
CPR Invest – Global Silver Age2
The Fund captures the topic of the ageing society predominantly by investing in the CPR Invest – Global Silver Age fund.
The CPR Invest - Global Silver Age fund capitalises on the structural trend of ageing and the investment opportunities arising from this by focusing on eight sectors serving the needs of senior consumers that, in the opinion of the managers of the CPR Invest – Global Silver Age fund, may constitute a high potential source of income for investors.
The eight identified sectors are currently the following3:
|+ 11.6%: the average annual growth rate of the operating results connected to the ageing population, calculated from 19966.|
Seniors have an increasingly significant purchasing power as compared with the other age groups of society, and the needs typical of this age group are already answered by vast numbers of companies these days with offers expressly tailored to them (sea voyages, television programmes, wellness services, etc.).4
The managers of the fund distinguish between two distinct groups of senior consumers:
Pensioners (aged 65-80)
Former baby boomers with a very high purchasing power: they aim to stay fit and healthy as long as possible, and refuse to be a burden for their close family and friends. They have plenty of free time, and have a high budget to spend on filling it valuably and comfortably, therefore have a high consumption potential.
Seniors (aged 80+)
They are frequently vulnerable: this age group is usually characterised by their increased dependency and high consumption of drugs, and frequently relies on healthcare equipment, care or nursing.
How is the CPR Invest – Global Silver Age fund managed?
From the approximately 740 global companies whose activities are built on the ageing population, the fund’s manager, CPR Asset Management, narrows down the number of companies included in the portfolio to 80-100 as a result of an extensive selection process. The dynamic change in the weight of the sectors represented in the portfolio is another important source of added value for the fund.
As a wholly owned subsidiary of Amundi Asset Management5, CPR Asset Management endeavours, through its wide expertise (comprising equities, convertible bonds, fixed income securities, asset allocation type products), to offer flexible, efficient and dynamic investment solutions that meet the needs of its customers. At the end of September 2018, the total assets managed by CPR AM were over 49 billion euro.
The Fund is mixed, which means that it invests in both the bond and equity markets, assuming a lower than medium risk, its aim being to achieve maximum return in the recommended minimum 3-year term.
The Fund Manager implements the above objective primarily through investment funds, and at least 80% of the portfolio of the Fund is composed of units of investment funds.
Predominantly through investment funds, the Fund’s flexible investment strategy targets several asset classes and regions. Its wide investment spectrum ranges from Hungarian and foreign money and fixed income investments to equity market instruments.
Consistently with the targeted lower than medium risk level, fixed income investments characteristically have significant weight in the portfolio. As far as fixed income investments are concerned, the Fund pursues a flexible, relatively liberal strategy regarding durations and target markets. In the case of riskier—primarily international equity type—investments, the topic of the ageing society plays a key role. Apart from this, the fund has no other predefined geographical or industry investment focus, and the investment strategy targets several asset classes and regions, therefore it has no reference index.
The investment funds applied are selected from the domestic and international investment funds of the Amundi Group. Besides investment funds, the portfolio might include individual investment assets as well, for example liquidity improving government securities and money market instruments (Treasury bills, sovereign bonds, bank deposits). For further details please see the Management Policy and KIID (key investor information document) of the Fund, approved by the National Bank of Hungary.
The topic of the ageing society
Companies capitalising on the ageing of the population may grow more rapidly than the market average, profiting from the significantly increasing demand arising from the rising trend in the number of elderly consumers.6 As compared with 2017, the number of people aged more than 60 is expected to double by 2050, and shall grow threefold by 2100, which means that from 962 million seniors in 2017 to 2.1 billion by 2050, and by 2100 3.1 billion people aged 60+ will live around the world.1
In Europe, 25% of the population are already more than 60 years old; however, a significant ageing of the population is expected in other continents as well in the decades to come. In Asia, for example, by 2030 the number of people aged 60+ is expected to increase by 66%1.
- Loss of capital: There is no capital or yield guarantee or promised capital or yield protection with regard to the Fund.
- Price fluctuation: The net asset value of the Fund may vary significantly due to the potential composition of the assets or the applicable management technique. Despite its mixed composition, there may be years or periods when the performance of the Fund is lower than the yield of the markets of which it is composed or the yield of government securities.
- Market risk: A risk arising from changes in the price of the assets included in the portfolio of the Fund (primarily equities and fixed income instruments). There is no guarantee that individual countries, markets or industries will perform as expected, therefore it may happen that the assets of the Fund are worth less than their value at the time of purchase.
- Exchange rate risk: The Fund invests in foreign instruments as well and, due to the volatility of foreign exchange rates, risks originating from open currency positions may arise (the Fund Manager does not necessarily conclude hedge transactions), and changes between the exchange rates of the different currencies may affect the Fund adversely.
The potential risks are described in detail in the official Management Policy and Key Investor Information Document (KIID) approved by the National Bank of Hungary (the “Supervisory Authority”) currently in effect. Before making your investment decision, please study all the potential risks of the Fund in these documents.
The Fund is managed by Amundi Alapkezelő Zrt. (the “Fund Manager”) (operating licence numbers: III/100.001-5/2002, III/100.001-6/2003, H-EN-III-1120/2012, and H-EN-III-136/2014). The distributor of the investment units of the Fund is UniCredit Bank Hungary Zrt. (the “Distributor”) (operating licence number: I-1523/2003), a member of the Budapest Stock Exchange.
Pursuant to Act CXX of 2001 on the Capital Market and Act XVI of 2014 on Collective Investment Undertakings and Their Managers, and on the Amendment of Certain Financial Acts, the information provided here qualifies as commercial communication and, pursuant to Act CXXXVIII of 2007 on Investment Firms and Commodity Dealers, and on the Regulations Governing Their Activities, the information provided here qualifies as marketing communication.
This commercial communication does not provide comprehensive information on the Fund and the terms and conditions of distribution, and it does not qualify as an offer, investment advice or recommendation.
Before making your investment decision, please consider the instrument you wish to invest in and the related risks, the fees charged for the transaction, and the potential losses that might arise from the investment. To this effect, please study thoroughly the official Prospectus, Management Policy and Key Investor Information Document (KIID) of the Fund approved by the National Bank of Hungary (the “Supervisory Authority”) currently in effect, which are available in the Fund Manager’s website (www.amundi.hu), the Distributor’s website (www.unicreditbank.hu), and the website operated by the Supervisory Authority for the purpose of publications (www. kozzetetelek.hu) (collectively, the “Publication Venues”). Before the investment, please also read carefully the Distributor’s List of Terms & Conditions and General Business Conditions currently in effect—including among others the terms and conditions of the distribution of investment units and the relevant subscription and redemption fees—which are available at the points of sale as well as in the Distributor’s website. The regular reporting obligations concerning the Fund shall be fulfilled on behalf of the Fund by the Fund Manager through the publication of the annual and semi-annual reports and monthly portfolio reports at the Publication Venues.
Please note that the return on your investment and the original value of the investment will fluctuate, as a result of which the investment units held by investors may also be worth more or less than the amount paid when they were purchased. The historical returns of funds do not represent any guarantee for their future performance.
This document does not cover comprehensively the tax consequences related to the purchase, keeping or sale of the units of the Fund, and does not qualify as tax law advice. For the evaluation of the tax considerations related to your investment decision, please consult a tax advisor or expert.
This commercial communication is disclosed in the website of the Fund Manager (www.amundi.hu) and the Distributor (www.unicreditbank.hu).
Amundi Alapkezelő Zrt. - member of the Amundi Group / Registered office: 1011 Budapest, Fő u. 14. III. em., Phone: +36 1 577 4200 / E-mail: email@example.com / Information on the funds: www.amundi.hu, www.kozzetetelek.hu / Information on the Distributor: www.unicreditbank.hu
1 Source: CPR AM, and United Nations publication “World Population Prospects: The 2017 Revision”.
2 CPR Invest is an investment firm established under the laws of the Grand Duchy of Luxembourg as an UCITS (Undertaking for Collective Investment in Transferable Securities) that has several sub-funds (société d’investissement à capital variable, SICAV). This sub-fund of the investment firm carries the risk of capital loss, and no conclusions may be drawn from its historical performance about its future performance.
3 The fund is managed in an active manner, and the selected sectors may change over time.
4 Expenditure per capital ratio of persons aged 65+ and aged 25-64, comparison between countries, source: CPR AM and National Transfer Accounts.
5 Asset management company Amundi Asset Management SAS (90 boulevard Pasteur - 75015 Paris - France - 437 574 452 RCS Paris - www.amundi.com) is supervised by the French financial markets authority (Autorité des Marchés Financiers – “AMF”), the number of its operating license is GPM 04000036, and its subscribed capital is EUR 746,262,615. Asset management company CPR AM (90 boulevard Pasteur, 75015 Paris - France – 399 392 141 RCS Paris, www.cpr-am.com) operates under the license of AMF, the number of its operating license being GP 01-056, and its subscribed capital being EUR 53,445,705.
6 Sources: CPR AM analysis, based on 1996-2015 data. The sample consisted of the approximately 600 exchange-listed companies included in the potential investment list of the fund, i.e. the companies constituting the fund’s investment universe.