- The economy has a lot of catching up to do in areas such as energy efficiency, automation, and smart industrial applications.
- Industrial companies from these sectors, which the stock market overlooked in the wake of Covid-19, could now benefit from a technological push in the economy.
- Robust economic growth in the coming years should give the cyclical industrial sector a further boost.
The year is 2030 and the fourth industrial revolution is in full swing. Intelligent, digitally networked systems and manufacturing processes are on the rise worldwide and have fundamentally changed manufacturing. Cloud computing, analytics, robotics and the Internet of Things ensure that machines can react faster and in a more flexible way to varying requirements. Increased mechanisation means old industries are disappearing and making way for new business models.
Networking man and machine
The buzzword Industry 4.0 describes a vision where people, machines and manufacturing processes are more closely networked. Ironically, the Covid 19 pandemic has helped to drive this development by forcing many companies to adapt their business models to the new circumstances. The industrial sector is also part of the solution when it comes to making our lives more environmentally friendly.
Smart technologies make a vital contribution to reducing environmental pollution.
"If we want to achieve this goal, we must embrace renewable energy and efficient building technology," says Marcus Poppe, who manages the DWS Smart Industrial Technologies fund.
His fund specialises in companies that operate in industrial growth sectors. In addition to automation, digitalisation and energy efficiency, these include e-commerce and infrastructure. "Our focus is on companies with promising business models that can achieve cyclical growth in addition to structural growth," says Poppe.
Industrial companies are playing catch-up
Many cyclicals were sidelined on the stock market during the 2020 year of Coronavirus. This only changed towards the end of the year when successes in vaccine development fuelled hopes of an end to the pandemic.
"There is a good chance that the race to catch up will continue in the near future," says Poppe. This is because the overall context looks more favourable for cyclical industrial companies than it has for a long time.
Billion-dollar EU and US spending programmes to deal with the consequences of the pandemic should give the economy a vital boost.
One reason for this is that the global economy is likely to return to growth after the severe slump. Interest rates are low, and the USA and Europe have launched spending programmes worth billions.
"Corporate investment was cautious in the 2010s too, and so today there is a real need to catch up," says Poppe.
An expected investment boom and the growing spread of digital technologies could pave the way for a new era of progress. Notable areas here include further factory automation via robotics, close interaction between man and machine and real-time market and production data evaluation. So-called "green deals" designed to reorientate the economy in a more sustainable direction provide further impetus for transformation.
"Measures to improve energy efficiency in the building sector, which accounts for a significant share of greenhouse gas emissions, have great potential," explains Poppe. And because recurring income from maintenance and replacement investment accounts for more than half of this business, an investment in this area tends to have a stabilising effect on the fund’s performance.
Fund details of the DWS Smart Industrial Technologies LD
|
Management Company |
DWS Investment GmbH |
|
Currency |
EUR |
|
Launch date |
24.04.2006 |
|
Fund assets |
EUR 1,079.59 million |
|
Fund assets (unit class) |
EUR 844.63 million |
|
Appropriation of earnings |
Distribution |
|
Issue surcharge |
5.00% |
|
Flat-rate fee |
1.450% |
|
plus performance-related remuneration |
No |
|
Current costs |
1.450% |
|
plus performance-related Remuneration |
N/A |
|
plus remuneration from securities lending |
0.002% |
Risks of the DWS Smart Industrial Technologies LD
-
The fund invests in equities. Shares are subject to price fluctuations and thus also to the risk of price declines.
-
Due to its composition/the techniques used by the fund management, the investment fund has a significantly increased volatility, i.e. the unit prices may be subject to considerable downward or upward fluctuations even within short periods of time. The unit value may at any time fall below the purchase price at which the client acquired the unit.
Performance of the DWS Smart Industrial Technologies LD in the past 12-month periods
|
Period |
Net |
Gross |
|
03.02.2020 - 03.02.2021 |
17.58% |
17.58% |
|
03.02.2019 - 03.02.2020 |
21.15% |
21.15% |
|
03.02.2018 - 03.02.2019 |
-5.74% |
-5.74% |
|
03.02.2017 - 03.02.2018 |
10.8% |
10.8% |
|
03.02.2016 - 03.02.2017 |
27.97% |
34.37% |
Past performance, simulated or actually realized, is no guarantee of future results. Source: DWS International GmbH, as of 03.02.2021.
Performance: MSCI World Industrials, MSCI World Information Technology
|
Index |
01/16 - 01/17 |
01/17 - 01/18 |
01/18 - 01/19 |
01/19 - 01/20 |
01/20 - 01/21 |
|
MSCI WORLD INDUSTRIALS $ - TOTAL RETURN INDEX |
23.9% |
29.4% |
-10.9% |
16.4% |
9.9% |
|
MSCI WORLD IT $ - TOTAL RETURN INDEX |
24.3% |
42.6% |
-2.1% |
42.2% |
38.8% |
Past performance, simulated or actually realized, is no guarantee of future results. Source: Bloomberg L.P., DWS International GmbH, as of 10.02.2021.
