Financière Galilée's fund of the month - PATRIMOINE24 - All the news from asset management

The share of thematic funds has, in the last ten years, tripled among global equity UCIs. Indeed, this approach to wealth management responds more easily to current and future challenges, as well as investor beliefs, while adapting to the structural changes in our world. Of the 25 themes identified by Financière Galilée, let’s focus on the theme of animal welfare, which can be invested through the Allianz Pet and Animal Wellbeing fund.

Although it has mainly benefited from the health crisis, the global animal welfare market has been booming for many years. The latter, which includes products and services (food, care, cleaning, etc.) for pets (and to a lesser extent pets), is growing by around 6% per year. Specifically, the market size of this new economic niche would easily exceed 300 billion dollars by 2030. Although these figures may seem disproportionate, let us remember that more than one in two households in France owns a pet and that the average budget allowed to an accompanying person exceeds 1000 euros per year. For its part, the Galileo Thematic Indicator (ITG) shows an average annual growth of 15% in the EPS of the underlyings of the theme, for an annualized volatility of 20% (slightly lower than the main equity indices). Finally, from a valuation perspective, the theme is being paid 21 times profits (PER ratio), a 25% discount from its mid-2021 peak.

Endowed with €550 million and managed by Oleksandr Pidlubnyy, the Allianz Pet and Animal Wellbeing fund, founded in 2019, is the first European fund to focus on the theme of animal welfare. The management team promises the purest approach to the subject, thus 75% of the total turnover of the companies in the portfolio is linked to the pet sector, across around thirty lines. These include Tractor Supply (animal feed and equipment), Idexx Laboratories (veterinary diagnostic products and services), and Trupanion (animal insurance). The most represented sectors are healthcare (42%), basic necessities (29%) and consumer discretionary goods (17%). In terms of geographical distribution, over two-thirds of UCITS are invested in the United States, followed by the United Kingdom (13%) and Japan (5%). Finally, we can note the solid performance of the fund in 2019 (+11.3%), 2020 (+37.8%) and 2021 (+16.1%), before a sharp correction in 2022 (-33.7% ). An opportunity to be seized?

If until a few years ago the theme of Animal Welfare still seemed immature, today the market has its rightful place within thematic management. Its applications, already structural, international and transversal, promise great prospects (integration of artificial intelligence, gene therapy, etc.). Exposure to this economy is now possible through the Allianz Pet and Animal fund, whose active management offers a selection of the most representative underlyings of the theme, accompanied by optimal risk management.

Finally, between its growth prospects and its permanent capacity for innovation, we will agree on one thing: the subject of animal welfare has a twist.

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