OUTLOOK 2022 Themes Trading - Swissquote
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⌻Themes Trading
OUTLOOK
2022
◚⯎
⌻Themes Trading
2021 saw the medical community up the ante,
PUTTING
further developing and delivering vaccines at
astonishing rates. Policymakers played their part
by providing monetary and fiscal support. The
2022 INTO consumer and corporate sectors adapted behav-
iors and business models to capture the renewed
mindset of the population, sparking a surge for
consumer goods. Corporate profits made short
work of analysts’ predictions and easily beat
consensus expectations.
All this has set up conditions for an interest-
ing 2022. The rebound in labour markets and
build-up of consumer savings created a surge in
demand at a time of constrained supply. The re-
sult was a bottleneck in global supply chains and
rapidly increasing inflation. These challenges,
along with the measured reduction of crisis-lev-
el policy accommodation, and how the world
adjusts to the perpetual hazard of new Covid-19
variants, remain key themes this year.
However, we remain optimistic. Our forecast for
2022 includes strong growth at a slower pace.
Economic reopening should continue regardless
of variants, boosting global economic condi-
tions, and pulling corporate earnings growth to
As we flip the calendar to 2022, the market’s above average levels. The economic recovery is
longest bull market in modern history is being not ending, and central banks are not pulling the
challenged. Fears of Federal Reserve tightening punchbowl just yet.
policy to combat inflationary pressures, rising
tensions between Russia and Nato, and marked Many investment trends that started prior to the
slowdown in China, are driving volatility higher pandemic received a hyperboost as their impor-
and asset valuations lower. Yet despite Covid-19 tance has been emphasized in a post pandemic
cases hitting record levels worldwide and per- world. A major trend we expect to continue is
sistent related challenges, the global economy investors seeking alternative asset classes and
has hit the fastest growth rate pace in 50 years. strategies to circumvent high valuations. Condi-
Global equities are holding recent gains even tions are becoming tighter and gains might be
with the aggressive pullback– a fact that is mind harder to come by, making choosing the right
blowing, all things considered. theme more critical than ever.
THEMATIC INVESTING IN TODAY’S WORLD 06
THEMATIC PORTFOLIO CONSTRUCTION 08
KEY THEMATIC TRENDS
Cybersecurity 10
Rare Earth Metals 14
Electric Vehicles 18
Cannabis 22
Hydrogen Economy 26
Sustainable Energy 30
Vegetarianism 34
China Internet 38
5G 42
Robotics 46
Food and Water industry 50
eGaming and eSports 54
Football Industry 58
Norwegian Fishing 62
Digital Payments 66
Authors/Contributors:
Peter Rosenstreich, Head of Investment Products
Nadine Pereira, Market Strategist
Design: Yona Lee, Lausanne
© Swissquote Bank Ltd
⌻Themes Trading
THEMATIC THEMATIC INVESTMENTS
require a fundamental
understanding of the influence
INVESTING that long-term economic,
political, and social trends
IN TODAY’S have and the investment
opportunities they expose.
WORLD
Thematic investing is decision-making based on predicting THEMATIC INVESTORS
long-term structural drivers and the medium term cyclicality take a distinct perspective
associated with them. on how structural trends
will create opportunities or
disruptions in sectors and
We are living in an extraordinary time where private portfolios were positioned based on regions where value and risk
change is celebrated. Disruptive innovations, historical information rather than expectations will be focused. This is an
ideas and societal changes are embraced in for the future. Today, past fundamentals are still immensely different approach
today’s world. The trends emerging from this widely being used to classify stocks. However,
from relative strategies.
constant transformation are the central focus of while it is highly probable that another financial
the thematic investment approach. Aiming for market meltdown will occur, it is not likely that it
long-term portfolio growth, thematic investing is going to be as impactful as the one in 2008.
harnesses ideas about future developments to In fact, the uniqueness of the 2008 crisis makes
identify structural opportunities across asset forecasting similar future events complex –
classes and around the world. anomalous data skews predictions. For this
THEMATIC INVESTING
reason, investors have come to base their
The thematic investment approach saw its rise investment decisions more strongly on in-depth
is a top-down investment
in popularity after the global financial crisis in analysis of expected changes in the future. This approach that allows
2008 that caused the investors’ focus to shift is where thematic investment becomes a critical investors to gain exposure
away from traditional investment methods. Prior tool. It offers a different approach to classic to top macroeconomic
to the crisis, the defining investment principle investment management methods in that it
themes and trends.
was to determine future stock movements by seeks to capitalise on opportunities shaped by
analysing data patterns from the past; most transforming developments in the future.
7
⌻Themes Trading
THEMATIC
PORTFOLIO
CONSTRUCTION
IDEA
GENERATION
INVESTMENT THEME IDENTIFICATION
STOCK UNIVERSE
(High exposure to theme)
STOCK
n
SELECTION
tio
FUNDAMENTALS
ca
llo
ea
dr
an
In
ve
w
TRADING CRITERIA
st
vie
m
re
en
rly
ALLOCATION
tp
te
ro
PORTFOLIO
ar
ce
Qu
CONSTRUCTION
ss
9
⌻Themes Trading
The Covid-19 crisis hit the business world in Latest moves A international study conducted by independent
unthinkable ways. The hasty switch to work- Recent high profile cyber-attacks have been research organisation, Opinion Matters, found
from-home caused, among other things, a major wake-up call for governments and the that a staggering 97% of firms have been
a renewed need for firms to update their private sector: impacted by cybersecurity breaches in their
cybersecurity departments. This increased supply chains. The good news is, 91% said
the flow of internet traffic, and created a • Texas-based information technology firm that the budget for third-party cyber risk
huge opportunity for hackers to expand their SolarWinds was the subject of a cyber-attack management is increasing. This shows that the
business. IBM has estimated that the number that went undetected for months, spreading private and public sector is not only recognising
of data breaches in the USA alone rose from malware to more than 18'000 clients, some the very real threat – there’s a shift in mindset
1'108 in 2020 to 1'291 in the first nine months of whom are Fortune 500 countries and too. It’s no longer about if they will get attacked,
CYBER
of 2021. There were less than 160 breaches federal government agencies. Officials have but when. Investments are being made into
reported in 2005. Data breaches are also said it could be years before the networks are minimising the risk and cost of inevitable
becoming more expensive; the average cost secure again. attacks, and more employees are being trained
SECURITY
for data breaches reached USD 4.24 million per in how to recognise and avoid data and personal
incident in 2021. There were 160 million data • A sophisticated and well-executed information breaches.
compromise victims in the third quarter alone. ransomware attack on Georgia-based Colonial
Pipeline saw nearly half of the East Coast’s Outlook 2022
fuel supply shut down, leading to consumer While cybercrime can be bad for business,
panic, price increases and shortages. To regain there’s always a winner – and we’re not talking
control of its systems, the company gave in to the hackers. The share price of exceptional
demands from the hackers, paying a ransom of cybersecurity leaders, such as Palo Alto
USD 4.4 million in Bitcoin. Networks rose 70% year on year with revenue
up 30%, and Cloudflare skyrocketed 90%
• After a ransomware attack on the Washington percent with revenue up 50%.
DC Metropolitan Police Department, hackers
released detailed personal information of An increasing awareness of the threat of cyber-
22 current and former police officers, attacks is already motivating investment into
exposing residential addresses, financial enhanced security measures, technology and
records and social security numbers. The training of personnel. The focus on cybersecurity
hackers demanded a USD 4 million ransom will continue to intensify, and that’s why the
to stop the data leak. The impact on private global market is valued at USD 218 billion, and
citizens, corporations and governments have expected to grow at a compound annual growth
been catastrophic. Earlier this year, President rate of 9.7% over the next five years.
Biden signed an Executive Order stating that
bold changes and significant investments
would be made to protect against further
malicious attacks.
11
⌻Themes Trading
CYBERSECURITY
CYBERSECURITYISIN CH0355198026 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Valor 035519802 4 12
ISIN CH0355198026 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Symbol SQBCSU 10
Valor 035519802 4 3 12
8
Symbol SQBCSU 10
3 2
6
Performance (VAMI) Distribution of monthly returns 8
4
2 1
3,000 25 6
Performance (VAMI) Distribution of monthly returns
2
4
20 1 0
3,000 2,500 25
0
Number of Periods
2
15
2,500 2,000 20 0 -1 -2
2019 2020 2021 0 2019 2020 2021
Number of Periods 15 10
2,000 1,500 -1 Cybersecurity MSCI World USD -2 Cybersecurity MSCI World USD
2019 2020 2021 2019 2020 2021
5
10
1,500 1,000 Cybersecurity MSCI World USD Cybersecurity MSCI World USD
5 0
-2 to -1% -5 to -4%
-1 to 0% -4 to -3%
0 to 1% -3 to -2%
1 to 2% -2 to -1%
< -5%
2 to 3% -1 to 0%
3 to 4% 0 to 1%
4 to 5% 1 to 2%
> 5% 2 to 3%
3 to 4%
4 to 5%
> 5%
1,000 500 Volatility (12M rolling) Geographical breakdown
2018 2020 0
9%
-5 to -4%
-4 to -3%
-3 to -2%
< -5%
500 Volatility (12M rolling) Geographical breakdown
Cybersecurity MSCI World USD Cybersecurity MSCI World USD
2018 2020 8%
9%
Cybersecurity MSCI World USD Cybersecurity MSCI World USD 7%
8%
6%
Monthly performance 7%
5%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
6%
Monthly performance
2021 5.26 -7.15 -2.53 8.95 2.94 5.27 1.87 7.85 -5.58 8.80 -1.58 1.18 26.42 4%
5%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
2020 5.87 -14.24 -3.51 13.81 6.76 0.68 8.18 2.19 -5.50 -4.47 10.37 16.64 37.68
3%
2021 5.26 -7.15 -2.53 8.95 2.94 5.27 1.87 7.85 -5.58 8.80 -1.58 1.18 26.42 4%
2019 8.28 9.88 -2.81 6.84 -7.61 1.22 7.25 -4.73 -3.78 5.49 6.91 0.22 28.37
2% UNITED STATES 79.2% JAPAN 8.3%
2020 5.87 -14.24 -3.51 13.81 6.76 0.68 8.18 2.19 -5.50 -4.47 10.37 16.64 37.68
2018 7.53 3.11 -4.11 6.39 1.73 -1.05 -1.72 9.23 0.84 -12.91 2.25 -8.90 0.00
3% 2019 2020 2021
CANADA 8.2% ISRAEL 4.3%
2019 8.28 9.88 -2.81 6.84 -7.61 1.22 7.25 -4.73 -3.78 5.49 6.91 0.22 28.37
2017 -0.30 4.79 1.62 0.75 6.97
2% UNITED STATES 79.2% JAPAN 8.3%
Cybersecurity MSCI World USD
2018 7.53 3.11 -4.11 6.39 1.73 -1.05 -1.72 9.23 0.84 -12.91 2.25 -8.90 0.00 2019 2020 2021
CANADA 8.2% ISRAEL 4.3%
2017 -0.30 4.79 1.62 0.75 6.97
Cybersecurity MSCI World USD
13
⌻Themes Trading
RARE
EARTH As the world transitions to clean energy, by 2050, overall demand for the rare earth Interesting developments in Europe are also
METALS
we may well be replacing our fossil fuel addiction elements – vital ingredients of clean energy taking place. To correct its dependency on
with a new form of resource dependence: rare tech – will increase sixfold. The World Bank Chinese imports, a EUR 1.7 billion investment
earth metals are critical to the zero carbon estimates production may have to increase by plan has been announced to support the
revolution. Rare earth metals comprise a list 500 percent to facilitate the mass adoption of development of a European supply chain for
of 17 elements required for the production of lithium-ion batteries, solar panels, wind turbines rare earth elements. The plan would see local
green energy technologies and high-tech goods and other critical clean energy technologies. production increase from 500 tonnes to 7'000
such as smartphones, flat screen televisions, Recognising the need to build capacity to tonnes by 2030, shrinking Europe’s dependency
computer monitors, electronic displays. They’re develop, manufacture and market batteries on Chinese imports by 20%.
also essential to electric vehicle batteries, on home soil, the U.S. Department of Energy
missile functions, satellites, wind turbines and announced a national blueprint that would boost Outlook 2022
jet engines. domestic production of lithium batteries and In 2022, the energy transition is even higher
supercharge a clean energy future. Without such up the agenda for governments, investors and
Over the past 15 years, annual demand for rare measures, an analysis had found that US battery corporates alike this mean higher demand for
earth metals doubled to 125'000 tonnes and production would fail to meet projected demand rare earth metals. The problem with rare earth
is projected to reach 315'000 tonnes by 2030. for electric vehicle batteries. elements is that they are usually found in very
Markets are already experiencing supply con- low concentrations, so their extraction is not
straints, triggered by the increased uptake in The bipartisan Infrastructure & Jobs Act economically viable. Governments and the
green technologies and advancing electronics. passed by congress earlier this year includes private sector are funding research into new and
While demand is concentrated in developed USD 7.5 billion to expand the electric vehicle cheaper extraction methods which, if found to
countries, supply chains for rare earth metals charging network, which is expected to be viable, will expand supply exponentially.
are largely found elsewhere. Currently, China accelerate the uptake of EVs along with tax
controls 85% of the global supply of rare incentives of up to USD 12'500 per vehicle. Regardless, there is no doubt that demand
earth metals. Most electric vehicles are powered by lithium- will continue to grow, driven in most part by
ion batteries, and more than 12 million tonnes of the global shift to clean energy and green
Latest moves existing batteries are expected to retire between technologies, and the increased and incentivised
2021 was a good year for rare earth metal now and 2030. Lithium prices have already more adoption of electric vehicles. Rare earth metals
prices. Demand for rare earth permanent than doubled this year, with demand expected industry is set to further rebound from the
magnets, key for electric vehicles (EVs) and to reach one million metric tonnes in 2021 and effects of the Covid-19 pandemic through
wind turbines, have soared as governments and increase to two million tonnes by 2030. The 2022. If supply can match demand, prices are
companies step up efforts to reduce carbon United States is also advancing projects to expected to remain stable. Forecast expects
emissions. Prices of praseodymium-neodymium gain a competitive edge against China in the USA needs ten times the amount of rare earth
oxide, or NdPr — two of the 17 rare earth mining and supply chain of rare earth metals. metals it currently has to meet President Biden’s
elements that are used in NdFeB magnets — In early 2021, the U.S. Department of Energy ambitious 2030 EV goals. In the event demand
surged to USD 115'000 a metric tonne, the announced a USD 30 million initiative to secure outstrips supply, there will likely be a rally on rare
highest since November 2011. To reach the the domestic supply chain for rare earth metals earth metal prices for the next decade.
global target of net-zero carbon emissions and other minerals required for battery-making.
15
⌻Themes Trading
RARE EARTH METALS
RARE EARTH METALS ISIN CH0434695042 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Valor 043469504 4 20
ISIN CH0434695042 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Symbol RARETQ 3
Valor 043469504 4 20 15
Symbol RARETQ 2
3
15 10
Performance (VAMI) Distribution of monthly returns 1
2
10 5
2,000 15
Performance (VAMI) Distribution of monthly returns 1
0
5 0
2,000 15 -1
1,500 0
Number of Periods
10
-2 0 -5
-1
1,500 2020 Jul 2021 Jul 2020 Jul 2021 Jul
Number of Periods
1,000 10
5 -2 Rare Earth Metals MSCI World USD -5 Rare Earth Metals MSCI World USD
2020 Jul 2021 Jul 2020 Jul 2021 Jul
1,000
500
5 Rare Earth Metals MSCI World USD Rare Earth Metals MSCI World USD
0
-2 to -1% -5 to -4%
-1 to 0% -4 to -3%
0 to 1% -3 to -2%
1 to 2% -2 to -1%
< -5%
2 to 3% -1 to 0%
3 to 4% 0 to 1%
4 to 5% 1 to 2%
> 5% 2 to 3%
3 to 4%
4 to 5%
> 5%
500
0 Volatility (12M rolling) Geographical breakdown
2019 2020 2021 0
20%
-5 to -4%
-4 to -3%
-3 to -2%
< -5%
0 Volatility (12M rolling) Geographical breakdown
Rare Earth Metals MSCI World USD Rare Earth Metals MSCI World USD
2019 2020 2021
20%
15%
Rare Earth Metals MSCI World USD Rare Earth Metals MSCI World USD
15%
Monthly performance 10%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
Monthly performance 10%
2021 6.43 11.61 -2.22 7.15 -0.43 -4.89 11.01 2.25 -5.53 4.95 -2.80 5.06 35.46
5%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
2020 -6.28 -12.43 -24.61 15.07 9.90 2.20 8.69 8.92 -6.03 4.78 36.78 14.50 45.99
2021 6.43 11.61 -2.22 7.15 -0.43 -4.89 11.01 2.25 -5.53 4.95 -2.80 5.06 35.46
2019 6.80 -4.43 -4.73 0.29 1.78 -6.70 -18.95 8.49 1.01 1.30 3.23 -13.99
5%
0% JAPAN 19.4% AUSTRALIA 17.5%
2020 -6.28 -12.43 -24.61 15.07 9.90 2.20 8.69 8.92 -6.03 4.78 36.78 14.50 45.99
2020 Jul 2021 Jul
CANADA 13.6% HONG KONG 8.2%
2019 6.80 -4.43 -4.73 0.29 1.78 -6.70 -18.95 8.49 1.01 1.30 3.23 -13.99
0% Rare Earth Metals MSCI World USD JAPAN 19.4% AUSTRALIA 17.5%
2020 Jul 2021 Jul BRITAIN 7.8% CHINA 6.2%
CANADA 13.6% HONG KONG 8.2%
NETHERLANDS 5.7% FRANCE 5.7%
Rare Earth Metals MSCI World USD BRITAIN 7.8% CHINA 6.2%
SWEDEN 5.5% MALAYSIA 5.5%
NETHERLANDS 5.7% FRANCE 5.7%
UNITED STATES 5.0%
SWEDEN 5.5% MALAYSIA 5.5%
UNITED STATES 5.0%
17
⌻Themes Trading
ELECTRIC
VEHICLES
Electric vehicle manufacturers became market chain operators are recognising the opportunity Buffett-backed company secured USD 3.9 wide investment category that will have many
darlings in 2020, with stocks staging searing and making bold moves to secure a piece of the billion selling new shares. Tesla continues to bet winners. Currently, the global electric vehicle
rallies sparked by the predicted demand for pie. The developments in the EV segments was on China, which is likely to represent 40% of market is projected to reach USD 802.81 billion
cleaner cars. Despite solid car sales growth, hot and fast in 2021. Japanese automotive giant deliveries for the EV maker in 2022. Californian by 2027, registering a CAGR of 22.6%.
2021 was less positive for stock prices. This year Nissan will invest USD 17.6 billion over the next start-up Lucid Air’s first vehicle is boasting
alone saw Electric Vehicles (EV) sales more than five years to accelerate the electrification of its high performance and the longest range of any
double, and Bloomberg has forecast global sales product line. electric vehicle. More than 17'000 reservations
reaching the USD 1 trillion mark by 2030. With have been made for the Air sedan, representing
traditional combustion engine, accounting for Swedish multinational Volvo Cars is planning an order book of USD 1.3 billion.
97% of all cars sold there is significant room to become a fully electric car company by
to growth for EV companies. Yet with total 2030, and fully electric vehicles will represent Outlook 2022
market capitalization of traditional and EV car at least 50% of German multinational BMW The electric vehicle market is booming, and
manufactures near equal, upside in EV valuations Group’s deliveries by the same year. Elsewhere in 2022 will see China and the United States go
look to slow. The year saw pure play electric Germany, electric vehicle start-up Sono Motors head to head for market domination. This year,
manufacturers roll out new models, established has experienced explosive success via a US IPO, as EV sales increased, internal combustions
names launching massive EV campaigns, skyrocketing from USD 15 to USD 38.50 in its vehicles sales dropped. This ratio is expected to
and investors rewarding every company in first day. grow steadily reaching just above 15% by 2025.
the industry. Tesla was a sparkling example, Currently, market growth in China is much faster
almost doubling in value and hitting a market United States-based electric-truckmaker Rivian than the United States. According to China’s
capitalisation of just over USD 1 trillion. Automotive Inc raised USD 13.7 billion in its US Passenger Car Association, deliveries of new-
listing, making it the largest IPO of 2021. The energy vehicles increased 121% from a year
Latest News stock has increased 47% from its offer price, and earlier, and market penetration is predicted to
According to Bank of America, the global uptake has a market cap of USD 111.6 billion. Ford has hit 70% by 2030.
of EVs is putting into motion a three-year wave ambitious plans to overtake Tesla to become the
of IPOS that could raise USD 100 billion before largest EV producer in the world. The American Amid the rise in demand for EVs, there's
the end of 2023. The COP26 climate change multinational is working on tripling production still a global semiconductor shortage which
summit gave way to encouraging developments, of its all-electric Mustang Mach-E by 2023 to has impacted deliveries and purchases.
with governments, automakers and others meet demand. Despite the ongoing challenges, Chinese EV
agreeing to transition to 100% zero emission manufacturers NIO, Xpeng and Li Auto have
sales of new cars and vans by 2040 globally, Chinese car and battery maker BYD Co. raised scaled up deliveries in the domestic market.
and by no later than 2035 in leading markets. USD 1.8 billion in a Hong Kong share placement, Despite the rapid growth of some high-profile
Individually, EV companies and dedicated supply its second such deal in 2021. In Q1, the Warren EV companies, EVs will be a meanigful and
19⌻Themes Trading
EMOBILITY
EMOBILITY ISIN CH0572904743 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Valor 057290474 3.5 20
ISIN CH0572904743 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Symbol ECARTQ 3.0
Valor 057290474 3.5 20
15
Symbol ECARTQ 2.5
3.0
15
Performance (VAMI) Distribution of monthly returns 2.0 10
2.5
2,000 6
Performance (VAMI) Distribution of monthly returns 2.0
1.5
10
5 5
1,800
2,000 6 1.0
1.5
Number of Periods
4
1,600 5 5
1,800 0.5 0
1.0
3 Sep Oct Nov Dec Sep Oct Nov Dec
Number of Periods
1,400 4
1,600
2 0.5 eMobility MSCI World CHF 0 eMobility MSCI World CHF
3 Sep Oct Nov Dec Sep Oct Nov Dec
1,200
1,400
1
2 eMobility MSCI World CHF eMobility MSCI World CHF
1,000
1,200 0
1
-2 to -1% -5 to -4%
-1 to 0% -4 to -3%
0 to 1% -3 to -2%
1 to 2% -2 to -1%
< -5%
2 to 3% -1 to 0%
3 to 4% 0 to 1%
4 to 5% 1 to 2%
> 5% 2 to 3%
3 to 4%
4 to 5%
> 5%
800 Volatility (12M rolling) Geographical breakdown
1,000
2021 Jul 0
10%
-5 to -4%
-4 to -3%
-3 to -2%
< -5%
800 Volatility (12M rolling) Geographical breakdown
eMobility MSCI World CHF eMobility MSCI World CHF
2021 Jul
10%
8%
eMobility MSCI World CHF eMobility MSCI World CHF
8%
Monthly performance 6%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
Monthly performance 6%
2021 15.09 -2.44 1.87 -2.67 0.37 9.28 -3.45 2.29 -3.05 7.44 0.94 -4.22 21.45
4%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
2020 1.34 30.17 8.03 42.50
2021 15.09 -2.44 1.87 -2.67 0.37 9.28 -3.45 2.29 -3.05 7.44 0.94 -4.22 21.45
4%
2% UNITED STATES 26.0% CHINA 20.9%
2020 1.34 30.17 8.03 42.50
Sep Oct Nov Dec
SOUTH KOREA 14.0% JAPAN 13.2%
2% eMobility MSCI World CHF UNITED STATES 26.0% CHINA 20.9%
Sep Oct Nov Dec FRANCE 7.4% GERMANY 6.7%
SOUTH KOREA 14.0% JAPAN 13.2%
SWITZERLAND 4.2% CANADA 2.6%
eMobility MSCI World CHF FRANCE 7.4% GERMANY 6.7%
NETHERLANDS 2.6% IRELAND 2.5%
SWITZERLAND 4.2% CANADA 2.6%
NETHERLANDS 2.6% IRELAND 2.5%
21⌻Themes Trading
CANNABIS North American cannabis industry
lighting up
Demand for a regulated cannabis industry in
would see competition between cannabis
multi-state operators heat up too. Currently, US
organizations are the leading beneficiaries across
developing and mature markets across North the globe, but face fierce competition from large
America is undeniably strong. However, in 2021 Canadian producers. The 2021 merger of Tilray
consumer demand growth did not translate into and Aphria created the world’s biggest weed
returns. Even support from the WallStreetBets company measured by revenue. The Canadian-
Reddit army in February failed to spark a based combined company expected to generate
sustainable bull trend in Tilray, Canopy Growth, pretax cost-savings of USD 81 million within 18
Aphria and Aurora Cannabis. Nevertheless, as months of closing the deal, and as of December
the fundamentals of the budding sector improve, 2021, its market cap stood at USD 4.42 billion2.
new estimates for 2022 indicate massive growth
is just around the corner. Canopy Growth, a Canadian-based company
that produces, distributes, and sells a variety of
More than 141 million Americans had access to cannabis and hemp-based products for medical
legal cannabis in 2021, leading to a projection and recreational use, is a shining example of
that legal cannabis sales would reach USD growth potential after opening 305 new retail
43 billion by 20251. A continued rise in legal stores in Canada during Q3 2021. Continued
spending and legalized states would see the growth, however, will be largely based on the
industry level up to the contribution apparel and provincial government's push to accelerate the
leather products make to the GDP. notoriously strict licensing process, which will
provide consumers greater access to a widening
Latest Moves array of legal cannabis products.
Legal uncertainties have long hampered the
growth of the North American cannabis Outlook 2022
industry, however the nation’s political shift to Further expansion of legalization and broader
the Democratic Party increases the likelihood product lines that appeal to more consumers
of legislation that would support the sector’s are key to this undervalued sector realizing its
growth. A new Democrat supported bill that potential. It’s expected that revenue will be
would shake up the system by allowing banks derived primarily from recreational marijuana
to serve marijuana-related businesses is likely and associated products, not medical marijuana.
to be passed in early 2022. The SAFE (Secure
and Fair Enforcement) Banking Act supports
the legal reform of the cannabis industry by
allowing it access to necessary financial services
that have previously been difficult to secure.
Among other things, it would also prohibit
regulators and prosecutors from taking action
against banks that accept marijuana-related 1
https://www.globenewswire.com/news-release/2021/06/16/2248469/0/en/Cannabis-
Capital-Raises-Triple-to-USD-6-Billion-in-First-Half-of-2021.html
businesses as clients. Increased legalization 2
https://companiesmarketcap.com/tilray/marketcap/
23CANNABIS 2.0 ⌻Themes Trading
ISIN CH0587304764
CANNABIS 2.0 Valor
Symbol
058730476
THCLTQ
Sharpe ratio (3M rolling) Sortino ratio (3M rolling)
100 10
ISIN CH0587304764
0
Valor 058730476
Performance (VAMI) Distribution of monthly returns Sharpe ratio (3M rolling) Sortino ratio (3M rolling)
Symbol THCLTQ -100 5
1,400 10 100 10
-200
0
1,200 8
Performance (VAMI) Distribution of monthly returns -300 0
Number of Periods
-100 5
6
1,400 1,000 10 -400
-200
4
1,200 800 8 -500 -5
-300 Apr Jul Oct 0 Apr Jul Oct
Number of Periods
2
6
1,000 600 Cannabis 2.0 MSCI World USD Cannabis 2.0 MSCI World USD
-400
0
4
-5 to -4%
-4 to -3%
-3 to -2%
-2 to -1%
< -5%
-1 to 0%
0 to 1%
1 to 2%
2 to 3%
3 to 4%
4 to 5%
> 5%
800 400 -500 -5
2021 Jul Apr Jul Oct Apr Jul Oct
2
600 Volatility (3M
Cannabis 2.0
rolling)
MSCI World USD
Geographical
Cannabis 2.0
breakdown
MSCI World USD
Cannabis 2.0 MSCI World USD Cannabis 2.0 MSCI World USD
0
8
-5 to -4%
-4 to -3%
-3 to -2%
-2 to -1%
< -5%
-1 to 0%
0 to 1%
1 to 2%
2 to 3%
3 to 4%
4 to 5%
> 5%
400
2021 Jul
Monthly performance Volatility (3M6 rolling) Geographical breakdown
Cannabis 2.0 MSCI World USD Cannabis 2.0 MSCI World USD
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
8
2021 -11.04 -9.31 1.59 2.49 -1.62 -15.73 -6.66 -9.66 -9.67 -9.50 -9.67 -56.64 4
Monthly performance 6
2
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
2021 -11.04 -9.31 1.59 2.49 -1.62 -15.73 -6.66 -9.66 -9.67 -9.50 -9.67 -56.64 4
0 UNITED STATES 50.5% CANADA 49.5%
Apr Jul Oct
2
Cannabis 2.0 MSCI World USD
0 UNITED STATES 50.5% CANADA 49.5%
Apr Jul Oct
Cannabis 2.0 MSCI World USD
25⌻Themes Trading
HYDROGEN
ECONOMY
2021 was a break out year for this alternative USD 9.6 billion in direct funding over the next based industrial giant Bosch exhibited a
energy and related hydrogen stocks. A global five years to help commercialise the fuel. On the hydrogen fuel engine module. Down under,
energy revolution is in motion, and clean continent, Austrian integrated oil company OMV Australian company Titan Hydrogen Limited
green hydrogen is one of the key solutions and Polish refiner Lotos are backing hydrogen as is developing a fuel enhancement system that
to the climate crisis despite its relatively high a transport fuel in Europe. OMV produces more can be installed into trucks, buses and power
production costs and the lack of a large-scale than 50'000 metric tonnes of hydrogen annually generators and is seeking pre-IPO funding for
market. The investment opportunities are vast, and is part of the H2 MOBILITY initiative, which a 2022 run at the ASX.
and set to spur the development of technologies aims to build an extensive public hydrogen-
for production, storage and transportation. filling-station network in Germany through Outlook 2022
Unlike grey hydrogen, its green cousin uses 2023. The company has already started adding The biggest spending right now in Hydrogen
renewable energies for its production, making stations in Austria. Following a recent refinery are governments. In July 2020, the European
it almost emission-free. As a result, the fuel upgrade, Lotos is capable of producing 16.5 Commission announced its hydrogen strategy
is widely considered integral to meeting net- tonnes per hour, and is investing in hydrogen with the “Hydrogen Strategy for a Climate-
zero targets, particularly if the world’s largest purification, distribution units and refueling Neutral Europe” report. The EU objective is to
emitters – the United States, China and Europe points in Poland, primarily aimed at public- be a net-zero carbon economy by 2050 with
– are to decarbonise Hard-to-Abate sectors. transport vehicles. Additionally, Repsol recently renewables accounting for a significant part
joined a consortium aiming to develop green- of the energy decarbonisation. With hydrogen
Lastest News hydrogen technology, while Neste is part of one as an critical part of the solution. The goal of
Hydrogen was a hot topic of conversation at that plans to make the fuel at the company's the plan is to increase hydrogen's share of the
this year’s Adipec conference in Abu Dhabi. renewable-products refinery in Rotterdam. market from less than 2% in 2020 up to 13-14%
It follows that the United Arab Emirates is Hellenic Petroleum and Motor Oil Hellas are by 2050. The EU reports that the ramp up of
positioning itself as a low-carbon market leader, bidding for a project involving green-hydrogen green hydrogen will require a total investment
aiming for a 25% export market share of blue production in Western Macedonia, with a of USD 470 billion over the next 30 years.
and green hydrogen, and launching a Hydrogen capacity of 1.5 gigawatts using solar power.
Leadership Roadmap at COP26. A recent study by McKinsey & Company
Hydrogen-powered vehicles are revving up projected that hydrogen could meet 14 percent
Recognising that comprehensive policy and to replace those fuelled by gasoline: Toyota of the total American energy demand by 2050.
investment must take place to lower the costs unveiled its hydrogen-powered car Mirai, which The green hydrogen export market is expected
of clean hydrogen, US President Joe Biden will be used for transportation during the 2022 to reach USD 300 billion yearly by the same
signed into law a USD 1.85 trillion infrastructure Beijing Winter Olympics. French multinational year, creating more than 400'000 jobs globally
package to kick-start the industry in the United tyre manufacturing company Michelin exhibited in renewable energy and hydrogen production.
States. The bipartisan package includes a hydrogen-powered racing car, and Germany-
27⌻Themes Trading
HYDROGEN ECONOMY
HYDROGEN ECONOMY
ISIN CH0513599479 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Valor 051359947 4 15
ISIN CH0513599479 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Symbol HYDRTQ
Valor 051359947 4 3 15
10
Symbol HYDRTQ
3 2
10
Performance (VAMI) Distribution of monthly returns 5
2 1
3,000 10
Performance (VAMI) Distribution of monthly returns 5
0
8 1 0
3,000 2,500 10
Number of Periods
0
8 6 0
2,500 2,000 -1 -5
Apr Jul Oct Apr Jul Oct
Number of Periods 6 4
2,000 1,500 -1 -5
Hydrogen Economy MSCI World USD Hydrogen Economy MSCI World USD
Apr Jul Oct Apr Jul Oct
4 2
1,500 1,000 Hydrogen Economy MSCI World USD Hydrogen Economy MSCI World USD
2 0
-2 to -1% -5 to -4%
-1 to 0% -4 to -3%
0 to 1% -3 to -2%
1 to 2% -2 to -1%
< -5%
2 to 3% -1 to 0%
3 to 4% 0 to 1%
4 to 5% 1 to 2%
> 5% 2 to 3%
3 to 4%
4 to 5%
> 5%
1,000 500 Volatility (12M rolling) Geographical breakdown
2021 0
15%
-5 to -4%
-4 to -3%
-3 to -2%
< -5%
500 Volatility (12M rolling) Geographical breakdown
Hydrogen Economy MSCI World USD Hydrogen Economy MSCI World USD
2021
15%
Hydrogen Economy MSCI World USD Hydrogen Economy MSCI World USD
10%
Monthly performance
10%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
Monthly performance 5%
2021 10.96 -8.86 0.25 0.40 -2.34 -0.13 -7.62 1.22 -8.73 13.55 -5.82 -5.07 -13.98
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
2020 -13.20 13.50 12.03 20.05 8.28 8.26 -2.59 -2.85 38.85 16.11 136.98
5%
2021 10.96 -8.86 0.25 0.40 -2.34 -0.13 -7.62 1.22 -8.73 13.55 -5.82 -5.07 -13.98
2020 -13.20 13.50 12.03 20.05 8.28 8.26 -2.59 -2.85 38.85 16.11 136.98 0% UNITED STATES 33.1% BRITAIN 15.9%
Apr Jul Oct
FRANCE 12.8% SOUTH KOREA 11.1%
0% UNITED STATES 33.1% BRITAIN 15.9%
Hydrogen Economy MSCI World USD GERMANY 9.5% JAPAN 6.5%
Apr Jul Oct
FRANCE 12.8% SOUTH KOREA 11.1%
SWEDEN 4.2% NORWAY 3.8%
Hydrogen Economy MSCI World USD GERMANY 9.5% JAPAN 6.5%
CANADA 3.3%
SWEDEN 4.2% NORWAY 3.8%
CANADA 3.3%
29⌻Themes Trading
SUSTAINABLE
ENERGY Total worldwide energy usage is expected to Latest moves Outlook 2022
grow by nearly 50% by 2050, according to the In 2021, the renewable energy industry showed There’s no doubt that sustainable energy is the
US Energy Information Administration. Demand remarkable resilience after 2020 gave way to way of the future, supported by the international
for renewable energy sources from most market unprecedented demand. Despite supply chain goal of limiting future warming to 1.5 degrees
segments is exploding, and is predicted to constraints, increased shipping costs and rising Celsius. The increased focus of investments on
accelerate in 2022. prices for key commodities, renewable energy renewables will see related jobs reach 42 million
prices have fallen more quickly than the industry globally by 2050, which is four times the current
To meet the growing global demand without anticipated and are fast becoming cheaper number. The global renewable energy market
falling back on fossil fuels, some serious than fossil fuels. The sector was given a further is expected to continue its upward growth to
spending on infrastructure, research and boost at COP26 when 197 countries agreed reach a valuation of USD 1.1 trillion by 2027.
technology is required. In 2021 alone, an to the Glasgow Climate Pact. A much-needed
estimated USD 750 billion was spent on clean supplement to the Paris Agreement, the pact is
energy technologies – a sum deemed not the first climate agreement explicitly planning
nearly enough to put the energy system on a to phase down unabated coal power generation.
sustainable path. It’s also the first time that the need for a rapid
reduction of coal and other fossil fuels has been
As government and private sector spending acknowledged in a UN climate talks declaration.
increases to address climate change and support
environmental, sustainability and governance The Biden administration’s green energy plan,
considerations, investors will see holdings grow which includes USD 2 trillion of investments,
along with demand. aims to fully decarbonise the power sector
by 2035, followed by the nation achieving a
net-zero carbon economy by 2050. This bold
strategy will likely spur on further growth,
particularly if proposed legislation is enacted.
Growth of the solar industry in particular is
projected for 2022 as related technologies
become more cost effective. Over the past
decade, solar photovoltaic (PV) systems that
produce electricity from sunlight have declined
in cost by 85%, making this one of the most
cost-effective resources available today.
Solar-plus-storage buildouts, exploring floating
solar PV modules, and expanding community
solar projects to new markets are some of the
expected developments over the coming year.
31⌻Themes Trading
SUSTAINABLE ENERGY
SUSTAINABLE ENERGY
ISIN CH0385843732 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Valor 038584373 4 15
ISIN CH0385843732 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Symbol SQBCEU
Valor 038584373 4 3 15
10
Symbol SQBCEU
3 2
10
Performance (VAMI) Distribution of monthly returns 5
2 1
2,500 15
Performance (VAMI) Distribution of monthly returns 5
0
1 0
2,500 15
2,000
Number of Periods
10
0
0 -1 -5
2,000 2019 2020 2021 2019 2020 2021
Number of Periods
1,500 10
5 -1 Sustainable Energy MSCI World USD -5 Sustainable Energy MSCI World USD
2019 2020 2021 2019 2020 2021
1,500
1,000
5 Sustainable Energy MSCI World USD Sustainable Energy MSCI World USD
0
-2 to -1% -5 to -4%
-1 to 0% -4 to -3%
0 to 1% -3 to -2%
1 to 2% -2 to -1%
< -5%
2 to 3% -1 to 0%
3 to 4% 0 to 1%
4 to 5% 1 to 2%
> 5% 2 to 3%
3 to 4%
4 to 5%
> 5%
1,000
500 Volatility (12M rolling) Geographical breakdown
2018 2020 0
12%
-5 to -4%
-4 to -3%
-3 to -2%
< -5%
500 Volatility (12M rolling) Geographical breakdown
Sustainable Energy MSCI World USD Sustainable Energy MSCI World USD
2018 2020
12% 10%
Sustainable Energy MSCI World USD Sustainable Energy MSCI World USD
10% 8%
Monthly performance
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
8% 6%
Monthly performance
2021 2.68 -7.26 -1.62 -2.33 -3.26 1.23 -5.10 6.95 -1.42 7.81 -2.47 -6.74 -12.07
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 6% 4%
2020 -1.22 -1.49 -18.55 8.98 8.64 1.48 14.86 8.41 -1.32 17.21 11.39 14.38 74.74
2021 2.68 -7.26 -1.62 -2.33 -3.26 1.23 -5.10 6.95 -1.42 7.81 -2.47 -6.74 -12.07
2019 16.03 4.52 2.98 1.40 -2.46 5.35 -1.44 0.39 3.39 -1.22 2.18 6.96 43.73
4% 2% UNITED STATES 36.2% CHINA 15.0%
2020 -1.22 -1.49 -18.55 8.98 8.64 1.48 14.86 8.41 -1.32 17.21 11.39 14.38 74.74
2018 -1.78 -3.26 6.19 -2.42 -11.07 3.12 -5.23 -2.38 -9.59 14.56 -7.82 -20.25 2019 2020 2021
SPAIN 9.5% DENMARK 6.5%
2019 16.03 4.52 2.98 1.40 -2.46 5.35 -1.44 0.39 3.39 -1.22 2.18 6.96 43.73
2% Sustainable Energy MSCI World USD UNITED STATES 36.2% CHINA 15.0%
HONG KONG 5.9% NEW ZEALAND 5.3%
2018 -1.78 -3.26 6.19 -2.42 -11.07 3.12 -5.23 -2.38 -9.59 14.56 -7.82 -20.25 2019 2020 2021
SPAIN 9.5% DENMARK 6.5%
SWITZERLAND 4.0% AUSTRIA 3.7%
Sustainable Energy MSCI World USD HONG KONG 5.9% NEW ZEALAND 5.3%
ISRAEL 3.6% FINLAND 3.5%
SWITZERLAND 4.0% AUSTRIA 3.7%
GERMANY 3.5% ITALY 3.2%
ISRAEL 3.6% FINLAND 3.5%
GERMANY 3.5% ITALY 3.2%
33⌻Themes Trading
VEGETARIANISM
Move to Vegetarianism the alternative protein sector has had a difficult Outlook 2022
It’s estimated that 11% of the world’s population 2021. A growing number of plant-based food It’s unrealistic to think plant-based products
is vegetarian, with many viewing the dietary companies have gone public in recent years, will replace meat altogether, but the market
choice as an individual contribution to making including Swedish oat milk maker (and favourite will continue to grow as countries push green
the planet a better place. Sustainability, climate of Oprah), Oatly. The company priced its 2021 agendas to meet the global goal of a net zero
change, animal welfare and health effects are all IPO at USD 17 per share, however shares took a economy in 2050.
considerations for people making the switch. tumble following allegations of greenwashing.
Despite the sector’s mediocre performance
The plant-based food market has been The share price of Los Angeles-based producer in 2021, investors have much to gain from the
capitalising on the vegetarian and flexitarian of meat alternatives, Beyond Meat, fell for much ongoing scaling of producers and demand
population’s palate for some time now, and of 2021 due to supply chain disruption and from younger generations in particular. The
there’s room to grow. Bloomberg´s Intelligence consumers losing interest in healthy options as sector also presents an opportunity for socially
unit believes the world market to be worth pandemic restrictions were lifted. CEO Ethan responsible investing, meeting environmental,
USD 29.4 billion, and has estimated an increase Brown asserted that the troubles were mostly social and corporate governance priorities.
to USD 161.9 billion in the next 10 years. temporary, but was candid about competition in
This means a 451% growth rate between 2020 the market.
and 2030.
Eat Just, the San Francisco-based maker of
Latest moves plant-based alternatives to egg products, is
Companies focused on plant-based protein are looking to enter the market with a USD 3 billion
the closest in meeting the operational efficiency initial price offering that’s slated for 2022.
and production capacity that’s needed to
compete with traditional protein sources. Californian-based Impossible Foods, most
famous for the tasty Impossible Burger, is set on
Soy is the predominant replacement, and is going public and reportedly looking to raise USD
expected to hold its position despite concerns 500 million in a new funding round that would
around allergies, estrogenic effects and bring its valuation to USD 7 billion.
genetically modified crops. Pea protein is
emerging as a competitor to soy and wheat,
driven by consumers seeking a protein source
that’s gluten-free, nutritious, sustainable and
priced lower than alternatives. Despite the hype,
35⌻Themes Trading
VEGETARIANISM
VEGETARIANISM ISIN CH0489280914 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Valor 048928091 4 20
ISIN CH0489280914 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Symbol VEGATQ
Valor 048928091 4 3 20 15
Symbol VEGATQ
3 2 15 10
Performance (VAMI) Distribution of monthly returns
2 1 10 5
1,600 8
Performance (VAMI) Distribution of monthly returns
1 0 5 0
1,600 1,400 8 6
Number of Periods
1,400 1,200 0 -1 0 -5
6 4 2021 Jul 2021 Jul
Number of Periods -1 -5
1,200 1,000 Vegetarianism MSCI World USD Vegetarianism MSCI World USD
4 2 2021 Jul 2021 Jul
1,000 800 Vegetarianism MSCI World USD Vegetarianism MSCI World USD
2 0
-2 to -1% -5 to -4%
-1 to 0% -4 to -3%
0 to 1% -3 to -2%
1 to 2% -2 to -1%
< -5%
2 to 3% -1 to 0%
3 to 4% 0 to 1%
4 to 5% 1 to 2%
> 5% 2 to 3%
3 to 4%
4 to 5%
> 5%
800 600 Volatility (12M rolling) Geographical breakdown
2020 2021 0
7%
-5 to -4%
-4 to -3%
-3 to -2%
< -5%
600 Volatility (12M rolling) Geographical breakdown
Vegetarianism MSCI World USD Vegetarianism MSCI World USD
2020 2021
7% 6%
Vegetarianism MSCI World USD Vegetarianism MSCI World USD
6% 5%
Monthly performance
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
5% 4%
Monthly performance
2021 5.28 1.24 3.21 2.07 2.28 -0.22 -3.68 -1.60 -4.01 -0.62 -7.77 2.95 -1.64
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 4% 3%
2020 -1.19 -10.99 -11.30 8.73 -1.62 1.94 3.92 2.00 -2.05 -0.30 12.31 2.49 1.36
2021 5.28 1.24 3.21 2.07 2.28 -0.22 -3.68 -1.60 -4.01 -0.62 -7.77 2.95 -1.64
2019 2.60 -4.74 2.51 1.71 1.90
3% 2% UNITED STATES 86.7% FRANCE 7.3%
2020 -1.19 -10.99 -11.30 8.73 -1.62 1.94 3.92 2.00 -2.05 -0.30 12.31 2.49 1.36
2021 Jul
CANADA 6.0%
2019 2.60 -4.74 2.51 1.71 1.90
2% Vegetarianism MSCI World USD UNITED STATES 86.7% FRANCE 7.3%
2021 Jul
CANADA 6.0%
Vegetarianism MSCI World USD
37Benefits of a thematic approach
⌻Themes Trading
China´s already huge internet sector continues holding company Tencent, agriculture-focused
to grow at lightning speed. Chinese authorities tech platform Pinduoduo and other tech firms
reported that the market has now almost 1 were also investigated or fined over alleged
billion users, which is more than three times anti-competitive behavior. Ride-hailing app
the population of the USA. Out of that billion Didi — which went public in the United States
users, 31% are from rural areas. The number despite reported concerns from Chinese
of people online shopping is 782 million, and regulators — was banned from app stores and
an estimated 346 million people are working has announced its intention to delist from the
remotely. Despite the impressive numbers, 2021 New York Stock Exchange.
was a year that China investors are desperate to
forget. A year-long regulatory crackdown sent Chinese property giant Evergrande also fell
investors scrambling and wiped billions of dollars victim to new rules introduced to control the
in value from the country’s internet giants. amount owned by real estate developers.
After failing to meet interest repayments, the
While the Chinese Communist Party’s moves company’s share price tumbled and has officially
blindsided the business world and shook foreign been declared to be in default on its debt, with
investors to the core, President Xi appears liabilities totaling approximately USD 300 billion.
undeterred. After all, the Party’s motives seem The knock-on effect may trigger a credit crunch
noble enough: to honour the country’s history that will hamper business across the board for
of socialism, correct economic inequality, and some time.
fix concerns related to consumer rights, data
privacy and excess debt. Outlook 2022
While much of this summary seems like doom
Latest moves and gloom, it actually gives way to a glittering
The volatility kicked off on November 2, 2020 opportunity for long-term investors. Heading
when the IPO for Jack Ma's Ant Group was into 2022, valuation in China’s world class
yanked overnight. Valued at USD 37 billion, companies will be extremely low. It’s likely
this was pegged to be the biggest initial public China will continue to flex its regulatory
offering in history. Little did investors or the muscles for some time, further rocking the
corporate world know this was just the start of markets with clampdowns on the corporate
a sweeping crackdown. Tech wasn’t the only world, however investors playing the long game
CHINA
sector caught off guard: finance, gaming, private will come out on top. Overall, the revenue of
education and entertainment all took a turn in the Chinese internet economy was estimated
the crosshairs. Rules introduced in July upended at USD 905 billion in 2020, growing 15% over
INTERNET
China’s USD 120 billion tutoring sector, and saw 2019, and with the expectation to grow 25% in
oversight of the country’s massive food delivery 2021 and an additional 15% in 2022.
industry tighten. Shopping platform Meituan,
39⌻Themes Trading
CHINA ONLINE
CHINA ONLINE ISIN CH0341837836 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Valor 034183783 6 200
ISIN CH0341837836 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Symbol PSTAV1
Valor 034183783 6 200 150
4
Symbol PSTAV1
150 100
4
Performance (VAMI) Distribution of monthly returns 2
100 50
2,500 20
Performance (VAMI) Distribution of monthly returns 2
0
50 0
2,500 20 15
2,000
Number of Periods
0
-2 0 -50
15 10 2018 2020 2018 2020
2,000
Number of Periods
1,500
-2 China Online MSCI World USD -50 China Online MSCI World USD
10 5 2018 2020 2018 2020
1,500
1,000
China Online MSCI World USD China Online MSCI World USD
5 0
-2 to -1% -5 to -4%
-1 to 0% -4 to -3%
0 to 1% -3 to -2%
1 to 2% -2 to -1%
< -5%
2 to 3% -1 to 0%
3 to 4% 0 to 1%
4 to 5% 1 to 2%
> 5% 2 to 3%
3 to 4%
4 to 5%
> 5%
1,000
500 Volatility (12M rolling) Geographical breakdown
2018 2020 0
14%
-5 to -4%
-4 to -3%
-3 to -2%
< -5%
500 Volatility (12M rolling) Geographical breakdown
China Online MSCI World USD China Online MSCI World USD
2018 2020 12%
14%
China Online MSCI World USD China Online MSCI World USD 10%
12%
8%
Monthly performance 10%
6%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
8%
Monthly performance
2021 17.62 6.18 -18.85 -0.10 -8.44 1.65 -24.49 -4.87 -6.03 1.70 -8.04 -20.93 -52.96 4%
6%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
2020 -3.28 -5.54 -4.91 11.23 -1.70 16.91 4.35 4.84 -3.41 6.48 6.77 5.05 40.16
2%
2021 17.62 6.18 -18.85 -0.10 -8.44 1.65 -24.49 -4.87 -6.03 1.70 -8.04 -20.93 -52.96 4%
2019 9.17 2.37 3.21 6.05 -19.32 6.77 -2.27 -3.00 -1.10 3.73 5.74 6.53 15.45
0% CHINA 91.8% SINGAPORE 8.2%
2020 -3.28 -5.54 -4.91 11.23 -1.70 16.91 4.35 4.84 -3.41 6.48 6.77 5.05 40.16
2018 13.70 -2.33 -8.91 -2.04 -2.15 -2.33 -3.07 -13.17 -4.06 -18.77 7.91 -3.28 -35.16
2% 2018 2020
2019 9.17 2.37 3.21 6.05 -19.32 6.77 -2.27 -3.00 -1.10 3.73 5.74 6.53 15.45
2017 0.49 3.94 0.95 5.82 8.87 -0.73 13.78 0.14 4.03 -2.63 3.98 5.74 53.02
0% CHINA 91.8% SINGAPORE 8.2%
China Online MSCI World USD
2018 13.70 -2.33 -8.91 -2.04 -2.15 -2.33 -3.07 -13.17 -4.06 -18.77 7.91 -3.28 -35.16 2018 2020
2017 0.49 3.94 0.95 5.82 8.87 -0.73 13.78 0.14 4.03 -2.63 3.98 5.74 53.02
China Online MSCI World USD
41⌻Themes Trading
5G
The fifth-generation (5G) wireless market Subsidiary T-Mobile announced it had reached
plumped the pockets of investors in its 2021 target of connecting 200 million people
2021 despite pandemic-related delays to with a faster cellular network, six weeks ahead
infrastructure buildouts and associated service of its nominated deadline.
deployments. Mobile network operators
remained committed to the technology – as The sector isn’t without its political pitfalls,
did savvy investors. There were 290 million though. The United States, United Kingdom,
subscriptions to 5G in the first quarter of 2021, Australia and New Zealand have all banned
and a report by Ericsson expects that number to or restricted Huawei’s involvement in their
climb to 580 million by the end of the year. Even networks over concerns of Chinese espionage.
though it is still a new technology, its adoption Canada is delaying its decision on whether
rate is moving faster than that of 4G when to work with Huawei, a move that has been
you compare their first years of deployment. criticised by the Chinese ambassador to Canada,
Ericsson has forecasted that 5G will reach the Con Peiwu.
one billion subscriptions milestone two years
earlier than 4G. Smartphones have largely been India is still working on the rollout of 5G,
recognised as the drivers of 5G adoption, with with fresh delays announced that have pushed
J.P. Morgan forecasting that 5G smartphone back the implementation of the technology until
sales will reach 725 million in 2022. Q2 2022.
Latest moves Outlook 2020
The continued roll out of infrastructure and Far from phoning it in, 5G stocks will be climbing
widespread adoption of 5G devices and high in 2022. Spending on wireless infrastructure
services will accelerate the development and is on the rise to an estimated USD 23.2 billion,
expansion of telecommunications, and boost and the number of 5G-enabled smartphones
the automotive, entertainment, manufacturing is also expected to increase to 660 million.
and computing sectors. We are in the midst of According to estimates, 5G will have generated
one of the most significant market opportunities 22.3 million jobs and USD 13.2 trillion of global
of the next decade. German carrier Deutsche economic output.
Telekom said more than 87% of the country’s
households can now access its 5G network.
43⌻Themes Trading
5G REVOLUTION
5G REVOLUTION ISIN CH0467720410 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
Valor 046772041 3.5 15
ISIN CH0467720410 Sharpe ratio (12M rolling) Sortino ratio (12M rolling)
3.0
Symbol FIVETQ
Valor 046772041 3.5 15
2.5 10
3.0
Symbol FIVETQ 2.0
2.5 10
Performance (VAMI) Distribution of monthly returns 1.5 5
2.0
2,000 8 1.0
Performance (VAMI) Distribution of monthly returns 1.5 5
0.5 0
1,800
2,000 8 6 1.0
0.0
Number of Periods
1,600 0.5 0
1,800 -0.5 -5
6 4 Jul 2021 Jul Jul 2021 Jul
0.0
Number of Periods
1,400
1,600
-0.5 5G Revolution MSCI World USD -5 5G Revolution MSCI World USD
4 2 Jul 2021 Jul Jul 2021 Jul
1,200
1,400
5G Revolution MSCI World USD 5G Revolution MSCI World USD
1,000
1,200 2 0
-2 to -1% -5 to -4%
-1 to 0% -4 to -3%
0 to 1% -3 to -2%
1 to 2% -2 to -1%
< -5%
2 to 3% -1 to 0%
3 to 4% 0 to 1%
4 to 5% 1 to 2%
> 5% 2 to 3%
3 to 4%
4 to 5%
> 5%
800 Volatility (12M rolling) Geographical breakdown
1,000
2020 2021 0
8%
-5 to -4%
-4 to -3%
-3 to -2%
< -5%
800 Volatility (12M rolling) Geographical breakdown
5G Revolution MSCI World USD 5G Revolution MSCI World USD
2020 2021 7%
8%
5G Revolution MSCI World USD 5G Revolution MSCI World USD
6%
7%
Monthly performance 5%
6%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
Monthly performance 5%
4%
2021 13.09 -2.51 4.37 0.28 0.57 3.26 1.81 0.03 -5.50 -0.20 -0.55 8.22 23.86
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
2020 -0.94 -6.94 -2.84 13.34 3.55 0.33 12.13 -1.80 -2.36 -0.73 12.10 3.77 30.95 3%
4%
2021 13.09 -2.51 4.37 0.28 0.57 3.26 1.81 0.03 -5.50 -0.20 -0.55 8.22 23.86
2019 -0.04 6.99 5.01 -2.81 -0.32 0.73 0.47 2.45 12.80
2% UNITED STATES 64.4% CHINA 9.0%
2020 -0.94 -6.94 -2.84 13.34 3.55 0.33 12.13 -1.80 -2.36 -0.73 12.10 3.77 30.95 3%
Jul 2021 Jul
JAPAN 9.0% ISRAEL 4.9%
2019 -0.04 6.99 5.01 -2.81 -0.32 0.73 0.47 2.45 12.80
2% 5G Revolution MSCI World USD UNITED STATES 64.4% CHINA 9.0%
Jul 2021 Jul SOUTH KOREA 4.4% SWEDEN 4.4%
JAPAN 9.0% ISRAEL 4.9%
FINLAND 3.9%
5G Revolution MSCI World USD SOUTH KOREA 4.4% SWEDEN 4.4%
FINLAND 3.9%
45⌻Themes Trading
ROBOTICS There’s so much big business likes about robots:
they’re more precise and efficient than humans,
they don´t get tired, don´t need holidays and
Latest moves
Robots stepped into the breach during 2021,
when humans were unable to work due to
Outlook 2022
The robotics market will likely remain dominated
by the big four: ABB, Fanuc, KUKA, and
never go on strike. Labour shortages during sickness or mandated health and safety Yaskawa. They shouldn’t rest on their laurels
the pandemic created an opportunity for the restrictions. Responsible for essential food though, as upstarts like Intuitive Surgical,
robotics, AI and engineering sectors to power supply, supermarkets and logistics providers Rockwell Automation and Zebra Technologies
up and prove their worth. Now that they’ve found themselves in need of safe and speedy are starting to make waves. Robots create a
secured a place on production lines, in factories solutions. The resulting success will see the more efficient production process that boosts
and shown they can safely share the workload technology integrated into future business economic growth. The long-feared issue is that
with a human, growth will continue at an plans. Other important trends in robotics and they will replace humans in certain activities.
exponential rate over the coming decade. engineering that are expected to emerge in Estimations put job losses to robots in the
2022 include: 20 million by 2030. In the same year, the
The International Federation of Robotics global robotics total market volume is
(IFR) is forecasting that new installation of • Collaborative bots or ‘cobots’. These are of expected to reach between USD 160 billion
industrial robots will hover between 400'000 the most popular pieces of technology from to USD 260 billion.
and 500'000 a year between 2021 and 2024, the robotics sector. With the ability to operate
reaching a worldwide stock of around five safely alongside humans, cobots eliminate
million by the end of the period. The adoption the need for excessive health and safety
of robotics is not uniformly distributed around boundaries. According to projections owing
the world. China, Japan, the United States, to recent advancements in programmable
South Korea and Germany account for 76% software, this sector of the robotics industry is
of global robot installations. The development expected to increase substantially by 2025.
of these markets has also differed in the past
few years. China is the biggest market in the • Smart factories with assembly lines supported
world for robots with one in three new robots by industrial robotics and automated solutions
installed there. will make operations faster, more efficient and
more precise, and have the potential to add
USD 500 billion to the economy in 2022.
• The Robotics Process Automation mechanism
is going to have a greater hold in the market.
This will be used to automate several
processes like appointment scheduling,
inventory management, and invoicing that
improves the experience of employees.
• Artificial Intelligence will also be used improve
the effectiveness and efficiency of robots
across supply chains, warehousing, automotive
and agriculture.
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