What is disruptive technology?
Disruptive technology includes innovative products and services that end up replacing the market’s current dominant technology. Google, Uber, Amazon and Apple all sprouted from disruptive ideas that gradually revolutionized our practices and behaviors until they became the new standard. Modern life offers countless examples of these technologies, as nearly all industries are going through their own tech revolution. New services integrating new technologies (cloud, AI, etc.) are popping up in every field:
- Health, with the development of connected systems to facilitate treatments and care for patients
- Automobiles, with self-driving vehicles
- Banking and finance, with new virtualized payment solutions or the use of blockchain in asset management, etc.
- Smart home, with the development of smart household appliances.
As the asset manager for a changing world and a partner of innovation, BNP Paribas Asset Management chose to support these technologies by launching a special investment fund: Parvest Disruptive Technology.
“ We are convinced that companies deploying disruptive technologies and innovative business models will achieve long-term growth and higher returns on capital invested. ”
Fund manager with the Global Specialist & Thematic Equity team at BNPP AM in Boston. (November 30, 2017, boursier.com)
The cream of the crop in innovative tech
The Parvest Disruptive Technology fund invests in 30 to 50 companies from the MSCI World Index, including large and mid-cap stocks from 23 developed countries. To benefit from the fund’s investments, companies must meet the following criteria:
- The technology must transform the fundamentals of the company’s service or production
- Innovative technologies must enable the company to change its business model
Some of the stocks in the Parvest Disruptive Technology fund include the Chinese company Tencent, the American companies Akamai, Splunk and First Solar, and the Japanese companies Canon and Nintendo.
€282.074 m : Total managed assets in the Parvest Disruptive Technology fund
source: BNP Paribas Asset Management as of March 23, 2018
A tailored management strategy
Fund management is managed by the expert teams at BNP Paribas Asset Management in the United States, with support from a network of analysts in Europe and emerging countries. The management approach combines two types of analysis.
- Thematic and industry analysis (known as top-down investment) identifies the top companies that develop disruptive technologies (Google) or benefit from them (Amazon)
- Bottom-up management that identifies an array of 150 international stocks with high growth potential and strong competitive advantages. This is a scalable approach focused on the future and based on integrating technology in the MSCI World sectors. This technological advance has already revolutionized several sectors, including health, consumer, finance, energy and industry.
The fund also includes ESG criteria (environmental, social and governance) and permanent risk management principles. Its primary aim is to select high-quality stocks. The fund also ensures the systematic exclusion of low-performance companies in the field of disruptive technologies, meaning those that do not manage to change their business model to integrate these technologies into their processes or adapt their line of products and services.
Investments in the fund are subject to market fluctuations and the risks inherent to property investments. The value of investments and their revenue can increase and decrease. Certain investors may not recover the full value of their investment. The fund described above presents a risk of capital loss. For a more complete description of risks, please refer to the fund’s prospectus and DICI.
*Parvest is a SICAV under Luxembourg laws and is compliant with the European directive 2009/65/CE