Two years and the conclusions are clear: investing in future megatrends pays off, with higher yields and, in some episodes, with lower risks. Imantia Capital is one of the managers that is making the most impact on this type of fund with its two products from the Future range, one multi-themed and the other specialized in healthy living. The first of them, his main bet at the moment, avoids failure thanks to several tools: ETFs, quantitative management and an interdisciplinary committee that shields you from all sides and gives you extra value.
The bottom Magnetia Future it rises almost 13.5% in the year and is revalued 51% since the beginning. A good cover letter. Inside there is room for topics such as robotics, electronic commerce, energy efficiency and sustainability, gender equality, food, water treatment, smart cities, cybersecurity, blockchain or artificial intelligence, among others.
Born in 2019, these funds have passed a tough litmus test. “Events have happened that have allowed us to test them successfully: the Covid-19 pandemic, a bear market, uncertainty and the recovery,” he recalls. Sergio Riosmanager responsible for Imantia Futuro.
The cornerstone of your process are the ETFs, the foundation of your portfolio. Thanks to these exchange-traded funds, “We correct trends that are not very consistent, we discard the ‘happy ideas’ and the marketing excessive”. From Imantia they let the first phase of innovation in a sector pass, when seed capital and private capital enter. “There are good business ideas, but they have to materialize and we we want to avoid failures”Rios acknowledges.
For this reason, they enter the second or third business phase of a new megatrend, that is, in the growth or maturity of the sector in question. If there is a wide and diversified universe of ETFs, it is the signal to analyze their staging. For example, “two years ago we still did not see the hydrogen as a theme, but there are already enough ETFs and that is why we are evaluating it”.
Although they believe that a sector has future potential to transform society and the economy, at Imantia they validate a theme “through the eyes of ETFs”. A process in reverse of other investment firms, but more “conservative” as far as variable income is concerned.
But, what is a megatrend or a theme for the future for Imantia Capital? As Ríos details, you have to meet the following requirements: “technology and innovation, demographics and society, and sustainability”. In a first phase, they select the investable universe of ETFs and, in the second, they build the portfolio based on the previous one with a filter that requires “certain thematic purity” of the underlying ETFs. It is not worth anyone or that the companies contained in the ETF only tangentially touch the activity.
Bitcoin, cannabis or space, on radar
Their investment process is like an elephant’s pace, slow but sure. If you do, there is no going back. It means that the megatrend exists and has a way to go. However, managing a long-term fund implies adjustments in the short and medium term.
“It is difficult for a theme to leave the universe, but it can leave the portfolio, as well as raising or lowering its weight” based on other new topics that enter the portfolio, the macroeconomy or business results. The optimizer that Imantia has developed after the integration of the Accurate Quant team tracks new themes and rebalances the inverted ones.
But there is one red line: regulation. That is why they still do not see bitcoin and other reference cryptocurrencies as investable today. “It is still a fairly invasive asset and we would not want its risk-return behavior to weigh heavily on the fund as a whole”, the manager is honest. If regulation stabilizes ‘crypto’, the picture could change in your favor.
Other themes are also on the radar. One of them, cannabis. “First we have to make an interpretation of whether it is a megatrend for the future and then decide whether it is socially responsible or not,” Ríos advances. The space theme is also around them, considered by many as the last frontier of investment.
Direction to Luxembourg
The Imantia Futuro fund manages 20 million euros, in line with the other product in the range, the Imantia Future Healthy, which is close to 25 million. This second, however, invests directly in North American and European companies that work in nutrition, sports, medicine and longevity. The fund pulled a lot in the Covid crisis. Up about 14% in the year and gaining more than 29.5% since its launch.
Imantia Futuro Healthy is a kind of spin off of the Future Imantia. According to Cristina Zabaletaresponsible for Communication, Digital Marketing and Events of the Spanish manager, “it is possible that later we will launch other divisions with funds for specific themes if the numbers come out, but not in the short term”.
What is about to happen is the registration in Luxembourg of the replicas of these two megatrend funds, so that institutional investors or foreign investors can buy them. The firm already has a fixed-income fund with an emerging bias in the Grand Duchy.
About the Future range, Zabaleta believes that “people value innovation and, above all, understand what they are investing in because they consume it”. The future is in our day to day.