The Neuberger Berman InnovAsia 5G Fund will invest in innovative technologies and business models in the early adoption phase to capture the expanding thematic universe around 5G technology, according to a statement by the employee-owned investment manager. The fund will also have the remit to invest in IPOs.
The all-cap thematic equity strategy will concentrate on companies with a market penetration of less than 20%, where the majority of incremental growth is driven by Asia. The team will look for businesses with proven track records and strategic links to established Asian innovation ecosystems – including 5G network infrastructure, internet of things (IoT), digital lifestyle trends and industrial innovations.
Asia is emerging as the new Silicon Valley. Spearheading technology innovation and adoption, this fast-growing region is no longer just a low-cost manufacturing base,” said YT Boon, co-manager of the strategy.
“By 2025, Asia will dominate 70% of 5G connections globally. In order to capture this enormous potential, we will allocate to different areas of innovation where we hope to unearth the hidden gems of Asian innovation, which have long runways of growth,” he added.
The strategy will comprise between 30-60 stocks and follow a disciplined stock selection process based on in-depth fundamental research and thematic relevance. The fund will also analyse ESG factors in its portfolio construction process.
Former chip designer YT Boon is based in Hong Kong, and his co-manager Hari Ramanan is in New York.
The two lead managers, who also run the $2.46bn Neuberger Berman 5G Connectivity Fund, will take a bottom-up approach, and will be backed by a team with local insights into Asian innovation ecosystems, including research analysts based in China, Hong Kong, Taiwan, and Japan.
“Driven by technology adoption in younger and older generations, Asia has leapfrogged the West to become an innovation powerhouse,” said Ramanan.
“The region dominates in leading edge semiconductor manufacturing, digital healthcare and online education services, and has set the scene for e-commerce, robotics, clean tech and logistics.”
At first the product will be offered to professional investors in Hong Kong and Singapore, and the sale will be anchored by a six month distribution partnership with UBS Global Wealth Management, according to Jose Cosio, head of intermediary sales for EMEA and Latin America at Neuberger Berman.
The Neuberger Berman 5G Connectivity Fund has generated a 57.17% US dollar return since its inception in April 2020, according to FE Fundinfo data. That compares with a 77.10% average return by its designated TMT equity category peers and 58.24% by the MSCI AC World index.
Predominantly invested in information technology stocks and regionally in United States, the Dublin-domiciled fund’s top holdings include Keysight Technologies, Marvell Technology, Advanced Micro Devices, Maxscend Microelectronics and Zenedesk, the 30 June factsheet shows.
Neuberger Berman 5G Connectivity Fund vs sector average and MSCI ACWI
