The Thornburg Global Opportunities Fund, actively managed by Vinson Walden and McMahon, includes Internet and communications investments worldwide.
“Since the tech bubble burst, there’s been real fundamental progress every year in processing power, battery life, sizes of devices and speed of wireless and fiber networks,” Walden said. “Facebook, Google and Amazon are wildly successful and there are related opportunities in Europe and Asia, and that’s where we are invested.”
Communications companies such as China’s Baidu make up about 20 percent of the fund's holdings. “Baidu is sort of a combination of Google and Priceline in China,” Walden said. “They are dominant in search, online video and travel with more than 20 percent revenue growth that could continue for the next decade.”
On the ESG front, the company says it has seen growing interest in that space from its clients.
“When we first took this strategy on many years ago, we were somewhat skeptical because we feared the limited universe would negatively impact returns,” said Rolf Kelly, a managing director at Thornburg. “It turns out not to be the case. It is extra work but we find the ESG component helps us identify better companies.”
After sub-advising an ESG fund managed by Calvert Investments, the company last month launched the Thornburg Better World International Fund, an ESG-oriented fund with holdings such as Shimano and Sony.
Shimano makes high-end bicycle components supplied to companies that sell bikes in Europe, the U.S. and China where commuting and sharing programs are aimed at reducing traffic.
“Shimano has a small dividend but they have good growth prospects and the ability to reinvest in their business,” said Kelly, who manages the fund. “It’s an under-levered company, which makes it attractive from a financial perspective as well.”
He noted that Sony is active in ESG areas that include a greater shareholder focus and improved water usage.
“The sensor manufacturing process requires water and Sony is very efficient,” Kelly said. “They are setting a great example in the industry and lowering their own costs.”