beyond baby boomers - amazon web services · 6/30/2018 · outline of the 2017 beyond baby boomers...
TRANSCRIPT
Proprietary & Confidential
2018
Beyond Baby BoomersThe Investable Assets of Tomorrow
Proprietary & Confidential
About Us
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 2
Global X’s Mission
Global X’s History
Founded in 2008, we are distinguished by our smart core, income, alpha, risk management and access suites of ETFs, and have more than 50 funds available across U.S. and foreign exchanges. Global X is recognized as a leader in developing intelligent investment solutions for our clients.
Global X’s Investment Philosophy
To listen to and empower customers to invest wisely in unexplored and intelligent solutions
Independent Advantage
To open market access to
unexplored, intelligent solutions,
we leverage our independence
to choose the best path – in-
house development or strategic
partnership with the right
solution provider
Value Focus
We are focused on providing
value to our customers through
our methodical, low-cost index-
based solutions, which provide
the potential for better
outcomes
Transparent Precision
Our funds’ systematic, published
methods eliminate manager
drift and are available to every
customer
Proprietary & Confidential
About Us
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 3
Thematic
Growth
12 ETFs
$11
$65 $897
$1,5
23
$389
$3,1
58
$4,0
20
AUM ($ Millions) as of June 30, 2018
• Targeting companies that may be poised to benefit from structural shifts in technology, people and demographics, and infrastructure development
• Offering solutions for investors seeking to increase or diversify the yield potential of their portfolio
• Serving as key portfolio building blocks that seek to deliver exposure to specific factors, values, or geographies
• Including targeted sector exposure to China, along with single-country and regional strategies
• Seeking to align opportunities for exposure to natural resources across a variety of areas, but chiefly in metals, mining, and agriculture
• Goal of delivering market-beating total returns by following methodologies backed by academic research
• Seeking to reduce or manage volatility to guide investors through changing market environments
Risk
Management
2 ETFs
Alpha
2 ETFs
Commodities
5 ETFs
International
Access
15 ETFs
Core
7 ETFs
Income
11 ETFs
Proprietary & Confidential
Outline of the 2017 Beyond Baby Boomers Survey
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 4
Basics of the 2017 Survey of Affluent Gen X’ers & Millennials
• Global X conducted independent
research via a third party partner in
Q1 2017
• The survey was structured to
investigate the specific investment
needs and wants of affluent
Gen X’ers and Millennials
Profile of Survey Participants
Major takeaways for FAs
1
2
3
The value of human advice remains high
FAs should become more tech savvy
FAs should to increase their knowledge of thematic investing
4 Connecting how and when affluent Gen X’ersand Millennials want is key
Proprietary & Confidential
The Value of Human Advice Remains High
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 5
Looking to increase assets managed by an advisor
Comments
• While robo-advisors do present a new kind of option for Millennials and Gen X’ers, our survey found that these younger generations are far from finished considering increasing assets managed by a human
• If you are a financial advisor, a question to ask yourself might be “How can I capture more of these assets?”
o Our survey sheds some light, and the answer isn’t mystifying.
o Simply put: “Connect with them how they want and when they want.”
1
Proprietary & Confidential
FAs should become more tech savvy
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 6
How important are tech capabilities?
2
What does “Tech Savvy” mean?1
Comments
• It isn’t news that being “Tech Savvy” is basically table
stakes to winning over Millennials and
Gen X’ers.
• That noted, we were still surprised at just how important it
is.
• Stay tuned for more info on the importance of Social
Media…
1Other ranking options included social media presence, educational videos, webinars, podcasts & blog
Proprietary & Confidential
Interest in Thematic Investing?
FAs should increase their knowledge of thematic investing
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 7
3
Which Thematic Trends Are They Most Interested In?
Comments – Get Smart on Thematic Investing!
Millennials and Gen X’ers are much more interested in Thematic Investing than the average Joe, and they are interested in themes that run the gamut from investing alongside their personal values to investing in disruptive technologies.
Proprietary & Confidential
Preferred Frequency of Interaction – Set a Cadence!
Connecting how and when affluent Gen X’ers and Millennials want is key (1/3)
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 8
4
Comments
In terms of desired frequency of communication, Gen X’ers seem
to be just a bit more high maintenance than Millennials, but a
grand majority of both groups prefer to interact with their advisors
quarterly or more.
Proprietary & Confidential
Preferred Social Media Platforms
Connecting how and when affluent Gen X’ers and Millennials want is key (2/3)
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 9
4
Comments
Having a social media presence is key to connecting with these younger generations,
and if an advisor has only a LinkedIn profile, he/she is not connecting with Millennials and
Gen X’ers via their preferred networks. The strong preference for Facebook and
Instagram could indicate that it’s important for Millennials and Gen X’ers to see how their
advisors live their personal lives. This insight may expand the feeling of connection and
trust between advisor and client.
Proprietary & Confidential
Being in the Know about Life Events
Connecting how and when affluent Gen X’ers and Millennials want is key (3/3)
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 10
4
Comments
When an advisor connects with his/her clients via social media, some
life events, such as marriage or births/adoptions, will come through those social media feeds. It’s also possible that something like the loss
of a parent will be noticeable on a client’s social media account.
Proprietary & Confidential
Key Takeaways – What Do Affluent Gen X’ers and Millennials Really Want? (1/2)
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 11
Proprietary & Confidential
Key Takeaways – What Do Affluent Gen X’ers and Millennials Really Want? (2/2)
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 12
Proprietary & Confidential
What is Thematic Investing?
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 13
Thematic investing refers to the process of identifying powerful macro-level trends and the underlying
investments that stand to benefit from the materialization of those trends.
1. Top DownIdentify powerful macro-
level trends
2. Bottom UpFind investments with high
exposure to those trends
Process
Characteristics
• Long term growth-focusedstrategy
• Unconstrained by arbitrary geographic and sector
definitions
• Low correlation to other growth strategies
• Relatable concepts
Proprietary & Confidential
Is Thematic Investing ‘Niche’?
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 14
“Why is thematic investing a good idea? In a rapidly changing business environment, the winners will be those that anticipate trends
and take advantage of new opportunities.”(Source: “Thematic Investing”)
“We believe that thematic investing can outperform in the brave, new, post-QE world; that early, contrarian theme adopters can benefit from its low frequency investment style; and that capital flows are increasingly theme driven.”
(Source: “A Transforming World”)
“Investors who are willing to follow the insights of such long-term themes over multiple business cycles can benefit from potential mispricing created by the typically shorter-term focus of financial markets.”(Source: “House View: 2016 and Beyond”)
“Many are turning to ‘thematic’ investment strategies. That was the most intriguing insight we took from a series of interviews we conducted in 2013 with about a dozen pension funds, sovereign-wealth funds, and other institutional investors.” (Source: “From Indexes to Insights: The Rise of Thematic Investing”)
For years, sophisticated institutional investors have engaged in or advocated for thematic investing.
Given high costs of research, however, it has largely been unavailable to retail investors
Merrill Lynch
McKinsey &
Company
UBS
Towers Watson
QuotesThought-leaders
Proprietary & Confidential
Where Does Thematic Investing Fit in a Portfolio?
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 15
Thematic strategies fit best in
a portfolio when:
• The portfolio is growth-
oriented
• The client has a longer
time horizon
• It replaces core or growth
equity exposure, keeping
asset allocation generally
the same
Fixed
Income, 30%
Thematic, 10%
Core Equities,
50%
Equities, 60%
Alternatives,
10%
Thematic investing tends to:
• Be alpha-seeking
• Have a long time horizon
(>5 years)
• Be growth-oriented
• Be equity-based
Thematic investing is typically a satellite position or an equity sleeve in a growth-oriented portfolio
Equity Sleeve
Hypothetical Growth Portfolio
Proprietary & Confidential© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 16
Global X has 12 ETFs designed to target disruptive structural changes1
1. As of 6.30.2018.
Global X’s Thematic Growth Suite of ETFs
Targets companies that may benefit from structural changes in people and
demographics, technology and innovation, the availability of resources.
INFRASTRUCTURE
Social Media ETF (SOCL) Millennials Thematic ETF (MILN)
U.S. Infrastructure Development ETF (PAVE)
Lithium & Battery Tech ETF (LIT) Longevity Thematic ETF (LNGR)
FinTech ETF (FINX) Health & Wellness Thematic ETF (BFIT)
Internet of Things ETF (SNSR) Iconic U.S. Brands ETF (LOGO)
Robotics & Artificial Intelligence ETF (BOTZ)
Autonomous & Electric Vehicles ETF (DRIV)
Future Analytics Tech ETF (AIQ)
Proprietary & Confidential
What is Driving the Growth of Robotics & AI?
17© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate.
Robotics and AI is a rapidly emerging theme because there are large economic incentives relating to
aging populations, rising labor costs, and opportunity for performance improvements
3. The Guardian, 4. PwC, 5. Technavio, 6. The Boston Consulting Group, 7. The Boston Consulting Group
A
B
C
Proprietary & Confidential
What is Driving the Growth of Robotics & AI?
18© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate.
Robotics and AI have the ability to disrupt a broad range of sectors, particularly manufacturing,
military and defense, medicine, transportation, and agriculture.
8. CBS News, 9. Wellpoint, 10. McKinsey & Company, 11. Global Industry Analysts, Inc., 12. Bank of America Merrill Lynch Global Research
Manufacturing• In 2015, around 10% of manufacturing functions were
automated. Boston Consulting Group estimates the share
to increase to 15% by 20258
Military & Defense• The U.S. Army expects that by 2030, it could reduce
Brigade Combat Teams from 4,000 soldiers to 3,000, using
robots to maintain the unit’s effectiveness despite less
manpower9
Medicine• IBM’s Watson supercomputer has a 90% diagnostic
accuracy rate for lung cancer compared with the
average diagnostic accuracy rate of 50% for human
physicians10
Transportation• In 2030, autonomous cars could account for us to 15% of
passenger vehicles sold worldwide11
Agriculture• The global market for agriculture robots is projected to
exceed $15 billion by 202012
Proprietary & Confidential
What is Driving the Growth of Robotics & AI?
19© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate.
Industrial robotics are expected to grow at a rapid pace, receiving a strong tailwind from China,
which is looking to make up for low robotic density compared to world averages.
Source: IFR World Robotics, 2016
Growth of Industrial Robotics Worldwide & In China
Source: IFR World Robotics, 2017.
*Forecasted
15 23 2337
5769
87
115
140
170
201
0
50
100
150
200
250
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
*
20
18
*
20
19
*
20
20
*
Estimated Annual Supply of Industrial Robots in China (2008 – 2020)
113
60
121166 159 178
221254
294
346378
433
521
0
100
200
300
400
500
600
Estimated Annual Worldwide Supply of Industrial Robots (2008 – 2020)
tho
usa
nd
s
tho
usa
nd
s
Proprietary & Confidential
What is Driving the Growth of Robotics & AI?
20© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate.
Growth of Different Markets for Robotics
In recent times, robotics have focused on industrial and military applications, yet the consumer market
is now exhibiting the fastest growth
Source: Siemens, 2017
Proprietary & Confidential
Lithium & Battery Tech
21© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate.
Lithium is the world’s lightest metal and has been dubbed “white petroleum” due to its common usage
in state-of-the-art batteries.
1. Source: Albemarle Investor Presentation, May 2017.
Approx. 60% of lithium demand has come from
industrial applications
1
Batteries could make up almost
75% of total demand by 2021
2
Proprietary & Confidential
Lithium & Battery Tech
22© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate.
Historically, EVs have been limited to affluent early adopters due to higher costs than traditional
international combustion engines (ICE). Yet falling battery costs and new regulations are closing the
gap.
Battery costs have fallen substantially1 New policies are accelerating the adoption
of EVs2,3
0
200
400
600
800
1000
1200
2010 2011 2012 2013 2014 2015 2016
$ Cost/kWh Cost Parity with ICE
1. Source: McKinsey, “Electrifying Insights: How Automakers can Drive Electrified Vehicle Sales and Profitability,” Jan 2017. ICE =Internal Combustion Engines
2. 2016 car sales data. Sources: International Organization of Motor Vehicle Manufacturers (OICD), CNN 2017.3. Cities banning dirty vehicles from Green Car Reports, 2017
$ Cost / Kilowatt-hour (kWh)2019 & Beyond - China (28m cars/year2):
recently introduced a scoring method that will
phase out ICE vehicles
2025 - Norway (0.2m): new passenger cars
and vans must have zero emissions
2030 - India (3.7m): will ban the sale of new
gasoline and diesel cars
2040 - UK (3.1m): will ban the sale of new
gasoline and diesel cars
2040 - France (2.5m): will ban the sale of new
gasoline and diesel cars
London, Athens, Madrid, Mexico City, and Paris are seeking to ban dirty vehicles in favor or low or zero emissions cars and trucks
Aggressive fuel economy standards for ICE vehicles could raise costs relative to EVs
Proprietary & Confidential
Converging Themes
Quote:
What Happens When Themes Converge?
23
(1) ‘From Indexes to Insights: The Rise of Thematic Investing’, McKinsey 2014.
McKinsey: “In our experience, the most attractive opportunities are found when multiple themes
converge and reinforce one another…”1
“It’s no coincidence that
consumers are becoming more
focused on health and wellness,
while at the same time peopleare living longer around the world.
Nor is it happenstance that social
media firms are reporting record
revenues, just as Millennials are
beginning to see their earnings
and consumption power
accelerate. As investors vet
various themes for possible
inclusion in a portfolio, they may
be well-served by targeting
similarly interconnected ideas.”
-Global X Research, ”Chart: What Happens When Themes Converge,” April 13, 2017
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate.
Proprietary & Confidential
Disclosures
© GLOBAL X MANAGEMENT COMPANY LLC. All numbers are approximate. 24
FOR USE WITH INSTITUTIONS ONLY – NOT FOR USE WITH RETAIL INVESTORS
Investing involves risk, including the possible loss of principal. The investable universe of companies in which BOTZ may invest
may be limited. The Fund invests in securities of companies engaged in Information Technology, which can be affected by
rapid product obsolescence and intense industry competition. International investments may involve risk of capital loss from
unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social,
economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well
as increased volatility and lower trading volume. Narrowly focused investments may be subject to higher volatility. There are
additional risks associated with investing in lithium and the lithium mining industry. LIT is non-diversified. BOTZ & LIT are non-
diversified.
High short-term performance of the fund is unusual and investors should not expect such performance to be repeated.
Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and additional
information can be found in the Funds’ summary or full prospectus, which may be obtained by calling 1-888-GX-FUND-1
(1.888.493.8631), or by visiting globalxfunds.com. Please read the prospectus carefully before investing.
Solactive Indexes and INDXX Indexes have been licensed by Solactive AG and Indxx respectively, for use by Global X
Management Company, LLC. Global X Funds are not sponsored, endorsed, issued, sold, or promoted by Solactive AG or
INDXX, nor do these companies make any representations regarding the advisability of investing in the Global X Funds.
Global X Management Company, LLC serves as an advisor to the Global X Funds. The Funds are distributed by SEI
Investments Distribution Co., which is not affiliated with Global X Management Company, LLC.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage
commissions will reduce returns. This information is not intended to be individual or personalized investment or tax advice and
should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding
your investment and/or tax situation.