FUND FOCUS – CASTLESTONE FAANG+ UCITS FUND

CASTLESTONE MANAGEMENT FAANG+ UCITS FUND

The FAANG+ Fund provides the investor with exposure to the world’s largest technology companies with an emphasis on the United States and the FAANG stocks. The Fund also invests in the growing Chinese internet companies like Tencent and Alibaba, as well as semiconductor makers and mobile phone producers like Taiwan Semiconductor and Samsung.

The Fund is traded daily, long-only, liquid and unleveraged. The portfolio is completely transparent and uses currency hedging to offset fluctuations in the value of currencies.

The FAANG+ fund should benefit from its geographic diversity and focus on the top US Tech names, as those stocks can now expect less regulation and freer trade policies under the new administration in the US from the start of 2021.

FUND FACTS – PERFORMANCE*

Considering that the Coronavirus caused havoc to the global financial markets in 2020, the year to date figures of +27.96% (as at end of October 2020) represent a very solid performance for the fund. 2019 gains of 17.98% are equally positive.

The fund has been volatile though with 14 positive months and 7 negative months during the same period and an average monthly return of 1.77% for the Class D USD shares.

2020 Performance Year to Date – 20th November 2020 Source: Bloomberg.

From the data above we can see that the Castlestone FAANG+ Fund has risen 34.75% YTD (20th November 2020) which is more than all the main US Indices.

IFA-ASIA COMMENTS:

Technology has been a constant component of IFA-ASIA managed portfolios over the last 6 or so years. It has been a sector that has truly delivered desired results for investors.

In 2020 we have witnessed that due to Covid-19 the use of technology has greatly increased both at work and at leisure. Consumer behaviour has changed towards eCommerce too, with the likes of Amazon and Netflix being market leaders. The outlook into 2021 also looks promising and should help this fund continue to be profitable. With most people working from home and having less to spend their money on, savings have increased dramatically. With the new iPhone 12 coming out, this could make the perfect Christmas present as people are relying on their phones more and more.

The Castlestone FAANG+ fund provides access to this sector with a bias towards companies which should benefit from the development, advancement and use of technology and communication services and equipment. There are no geographical restrictions however the weighting is heavy US listed assets (78%). Global technology equities some of which are familiarised by the acronym “FAANG” which defines the most well-known technology equities. The fund also invests in other large technology stocks and up to 100% may be invested in equities.

Noting that FAANG stocks make up approx. 25% of the S&P 500 market cap (at 12/10/2020) is another reason for optimism.

With a strong track record over the past 2 years and a recommendation to hold exposure in technology within our IFA-ASIA portfolios, we would consider holding this asset as a complementary component of the overall portfolio and exposure to technology.

If you wish to add this to your portfolio please contact your adviser


QUESTIONS & ANSWERS……………..

What is FAANG?

Facebook, Apple, Amazon, Netflix, Google. Each of the FAANG stocks is included in the S&P 500 Index. Since the S&P 500 is a broad representation of the market, the movement of the market mirrors the movement of the index. Together, the FAANGs make up appx. 19% of the S&P, which has a total of 500 of the largest companies trading on the NYSE and NASDAQ. Adding Microsoft to the FAANGs represents appx. 25% of the S&P 500 Index.

What is “+”?

The next major tech names in developed and emerging markets: Samsung, Taiwan Semiconductor, Tencent, Baidu and Alibaba etc.

Investment Objective

The Fund will focus on US and global tech companies. The Fund will have no leverage and only hold exchange traded equities diversified under 5/10/40 rules of UCITS. The fund will also have the ability to use an option strategy targeting premium income from selling covered call options against the underlying holdings.

Why own FAANG+ stocks?

FAANG+ stocks are some of the most popular and attractive stocks to own and should be considered in a portfolio due to their high growth potential. Approx. 25% of all money going into tracker funds of the S&P 500 Index and ETF’s related to them both are allocated to FAANG+ stocks.


FUND FACTS – TOP 10 HOLDINGS*

  • Alphabet Inc (GOOGL) – Stockbroker rating 3 – Hold
  • Facebook Inc (FB) – Stockbroker rating 3 – Hold
  • Amazon.Com Inc (AMZN) – Stockbroker rating 3 – Hold
  • Apple Inc (AAPL) – Stockbroker rating 3 – Hold
  • Netflix Inc (NFLX) – Stockbroker rating 3 – Hold
  • Microsoft Corp (MSFT) – Stockbroker rating 2 – BUY
  • Baidu Inc (BIDU) – Stockbroker rating 1 – STRONG BUY
  • Alibaba Group Holding (BABA) – Stockbroker rating 3 – Hold
  • Tesla Inc (TSLA) – Stockbroker rating 3 – Hold
  • Nvidia Corp (NVDA) – Stockbroker rating 2 – BUY

*The top 10 holdings represent 57.7% of the fund (as at October 2020). Please note that stockbroker ratings are at 24th November 2020.

FUND FACTS – GEOGRAPHICAL EXPOSURE*

  • United States 78.17%
  • China. 12.28%
  • Europe. 5.64%
  • South Korea. 1.98%
  • Taiwan. 1.94%

*As at October 2020.

FUND FACTS – Details

Management Company – AQA Capital Ltd

Custodian – Swissquote Bank

Investment Adviser – Castlestone Management LLC

Investment Manager – AQA Capital Ltd

UCITS Fund with daily liquidity.


FUND FACTS – INVESTMENT ADVISOR

Harbourside 5, 185 Hudson Street, Suite 2544, Jersey City, NJ 07311 USA