Trends make prices and prices move the stock markets. A current look at the winners and losers shows how big the gap can be between trends in different industries.
While investors are increasingly investing in energy and raw materials companies, the software sector and especially SaaS companies are going through a phase of valuation adjustment and strategic realignment. Shares in the semiconductor sector, on the other hand, are catapulting exponentially upwards. The stock market always exaggerates in both directions – the right selection of trends is the be-all and end-all for successful investment decisions.
The revival of energy, raw materials and the AI chip hype
The energy and raw materials sector as well as semiconductor stocks have emerged as key beneficiaries of the current macroeconomic environment. Several factors have contributed to stocks in these areas gaining high momentum. With Akrida Trends we invest in selected stocks from these sectors in order to benefit from such positive trends.
Geopolitical risk premium
Ongoing instability in key regions has left supply chains vulnerable. Investors, alerted to emerging disruptions, are fleeing to commodity producers as a hedge against supply shocks and protection against inflation risks.
This is how the Australian rare earth producer benefits Lynas Rare Earths (LYSCF) from the increasing realization that Chinese dependence on critical raw materials does not come without risks. Lynas is only one of two rare earth producers outside of China and becomes extremely important amid shortages or export restrictions of critical raw materials such as neodymium, which is used in electric vehicle engines, offshore wind turbines and precision-guided munitions. Although the stock still has significant long-term potential, we have secured our profits and sold the position.
A similar situation can be observed with lithium. The growth of electricOMobility and intelligent battery storage systems are driving demand for lithium, with export restrictions in African countries and delivery failures in China artificially reducing supply. The Akrida Trends portfolio company Albemarle (ALB) is a direct beneficiary of this development with production facilities in North and South America as well as Australia.
The “Energy-AI Nexus”
It’s no secret that the massive push toward artificial intelligence is fueling energy demand. Because expanding data center capacity requires enormous amounts of electricity, the energy grid has become a critical bottleneck. Energy solutions that protect the existing energy network are of particular importance. The demand for industrial gas turbines that can be directly connected to the data centers represent a stable and immediately available solution. Our Depot value Siemens Energy (SMEGF) is next to GE Vernova (GEV) and Mitsubishi (MSBHF) one of the few providers of these complex systems. Gas turbine production at Siemens Energy is fully booked for years to come.
In addition to gas turbines, which supply the increasing number of data centers with energy, their need for intelligent energy management systems is growing. Infineonalso a title in the Akrida Trends portfolio, illustrates the structural transformation that is currently taking place in the price development of the Semiconductor Index (SOXX) reflects: While the company is traditionally anchored in the automotive sector, the massive demand for AI-optimized “power chips” for data centers is driving growth significantly. With a doubling of sales in the previous year and the ambitious target of EUR 5 billion by 2030, Infineon underlines a dynamic that goes beyond pure index performance.
The different expressions and contradictions of trends reflect what investors currently value: energy security and industrial infrastructure have replaced digital scalability as the preferred narrative in the market. As the year progresses, the performance of these sectors will likely depend on whether software companies can demonstrate concrete productivity gains and cost efficiencies for their enterprise customers, or whether energy and raw materials continue to dominate as the “safe haven” of the modern economic cycle. New trends can develop at lightning speed and existing trends can end abruptly. Rigorous riskmManagement protects the portfolio from losses and correct position management is a helpful tool in portfolio management. More on this in the next column and until then, good luck with your investment decisions…
If you want to bet on stock market trends like a hedge fund, you should Akrida Trends (WKN UBS3AC / ISIN CH1463708078) certificate take a closer look. Here we invest with a concentrated portfolio in up to 10 stocks from the most promising trends.
Further information at: https://akridacapital.com/akrida-trends/
Marko Graßmann is co-portfolio manager of the “Akrida Trends” certificate (ISIN:CH1463708078). He also advises family offices and hedge funds on stock investments. Marko began his career in portfolio management at Allianz SE in Munich. He has a degree in business administration (Univ. Bayreuth) and has been a CFA charterholder since 2011.
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