Saxo Bank Introduced Equity Theme Basket Focusing on Logistics Industry

Saxo Bank announced the launch of its 15th equity theme basket on the first day of Jun. According to Saxo Bank, the new equity theme basket will provide a diversified exposure to the global logistics industry. 

The new equity theme basket is the biggest basket Saxo Bank has done to date, consisting of 50 stocks across a wide range of logistics services from sea, land, integrated, application systems and storage/warehouses. The basket represents $1.35trn 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. Saxo Bank has excluded passenger transportation and focused instead on logistics of consumer goods and industrial products such as crude oil and liquified natural gas (LNG).

The logistics basket of Saxo Bank 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. “With personal income up more than 16% over the past year in the US there is enough momentum among US households to keep the consumption spree going and we expect the underlying demand for logistics services to be strong,” said Peter Garnry, Head of Equity Strategy at Saxo. 

Saxo Bank also mentioned the key risks to this portfolio including 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.

“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. We are long-term positive on the industry, and believe consolidation and price power combined with attractive equity valuations will drive outperformance compared to global equities," summarized by Peter Garnry.  

A month ago, Saxo Bank launched new semiconductor equity theme basket​ including 30 stocks with a combined market value of $3 trillion dominated by TSMC, NVIDIA, ASML, Intel, Broadcom, Texas Instruments, and Qualcomm.