Thematics Safety Fund

Thematics Safety Fund is run by Frederic Dupraz, which was formerly from Pictet-Security Fund.

Dupraz began his investment career at Pictet in 2004 and was the co-manager of the aforementioned Pictet-Security strategy between March 2009 and September 2018. This was before co-founding Thematics Asset Management, a part of the Natixis Group, in December 2018.

Dupraz has maintained his AAA rating for the past four months which is attributed to his stellar performance in the Equity – Global Themes sector, which branches his time on Pictet-Security (July 2017-July 2018) as well as Thematic Safety (Jan 2019-June 2020), over the past three years.

The four-month gap from September 2018 to December 2018 is substituted by the average manager performance in the sector. This means Dupraz’s track record in his sector is strong and over the past three years, with a 53.9% return against an average peer return of 21% as shown:

The Thematic Safety fund has similar positions to that of the Pictet-Security fund with both holding US research and development group Thermo Fisher Scientific as the top holding. Both funds also hold US fintech Fiserv and financial group Fidelity National Information Services within their top 10 positions.

The fund is both unconstrained and concentrated, with just 46 securities. More than 50% of the portfolio is invested in the digital space, and more than 30% of the companies he is invested in specifically address network and cloud security, email and data protection, threat detection and identity management.

The Thematic Safety fund lost 14% in the first quarter of 2020 and in light of the Covid pandemic Dupraz made a few adjustments to the portfolio. He initiated a new position in computer printing specialist Zebra Technologies, a stock he tracked for a long time and jumped on the chance to invest when valuations fell in Q1.

He also reduced exposure to securities exposed to personal safety stocks, such as Cintas and MSA, as they were perceived to be most likely to suffer the impacts of lockdowns and higher unemployment. He reallocated capital to cybersecurity stocks such as Zscaler and Palo Alto, which he believes will benefit from a greater level of remote working in the future.

The strongest contributor to the performance of the Thematics Safety fund during the worst of the pandemic was San Jose-based cloud computing specialist Zscaler.

Dupraz said: ‘The company is cloud-native and offers the most sophisticated zero-trust network access. The lockdown period brought to light the need for many corporations to upgrade their IT infrastructure and strengthen their cybersecurity solutions.

‘Another strong contributor in terms of performance was Varonis. The company is a leader in data protection and insider threat detection. Besides an undeniable technological leadership, Varonis demonstrated strong execution capabilities in its transition to a SaaS model.”

With this proactive approach, the fund was up 26.6% in Q2, making up for the 14% loss made in Q1. The fund has slowly gained traction with investors over the past three months taking in net inflows of $66m.

Source: CityWire Selector, 2020-08-06, “How has AAA-rated thematic PM Dupraz fared since leaving Pictet?”