Saxo Bank launches equity theme basket focused on logistics industry

Multi-asset investment company Saxo Bank today launched its 15th equity theme basket providing a diversified exposure to the global logistics industry.

This is the biggest basket Saxo has done to date, as the industry is very large and complex, consisting of 50 stocks across a wide range of logistics services from sea, land, integrated, application systems and storage/warehouses. The basket represents $1.35trillion in market value and an industry that grew earnings 16% over the past year, and the stocks have been selected based on highest market value within the different sub-categories.

Peter Garnry, Head of Equity Strategy at Saxo, comments:

“The global logistics industry is an interesting theme for long-term investors as it plays into more global trade, much bigger e-commerce market, and pricing power of logistics services due to network effects and complexity”.

Saxos logistics basket has rallied 122% from the end of March 2020 easily outpacing the MSCI World and this year the basket is up 28% making it the best regular equity theme outside of high volatility crypto & blockchain basket.

According to Saxo, the key risks to this portfolio are fuel costs and a slowdown in e-commerce spending. Brent Crude futures for August 2021 just hit $71/brl today indicating a lot of pressure on energy prices and fuel costs. This is risk to logistics firms and the degree of risk depends on how much they can pass on to their customers. E-commerce hangover has been a topic ever since 8 November 2020 when the world got the vaccine news, but so far, the revenue growth is still high, but an eventual full opening of physical stores and restoring of old habits could dent growth in e-commerce.

Higher interest rates could also put pressure on profits at logistics companies and their equity valuations because these companies invest a lot of capital in physical assets, Saxo adds.

Saxo has been regularly expanding its lineup of equity theme baskets. In May, for instance, the company launched its new semiconductor equity theme basket. This basket consists of 30 stocks with a combined market value of $3 trillion dominated by TSMC, NVIDIA, ASML, Intel, Broadcom, Texas Instruments, and Qualcomm. The median revenue growth rate the past year has been 7.6% while earnings have grown almost 20% as prices have increased due to the rising demand and ongoing supply constraints.

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