atonrâ mobile payments certificate
ATONRÂ MOBILE PAYMENTS CERTIFICATE The AtonRâ Mobile Payments is a long-only, monthly rebalanced, EUR-based activelymanaged certificate. It aims to benefit from the expected rise of contactless payments around the world as consumers move to their smartphones and tablets for everyday purchases at the expense of cash.
Main Features Asset Class Inception Date Currency Type of Return Ticker (EUR Inst. Class) ISIN (inst. Class EUR) ISIN (Retail Class EUR) ISIN (Retail $USD Class) Issuer Issue Price Last Price Sharpe Ratio Correlation Beta Benchmark
While the mobile payment infrastructure is now in place (NFC-enabled phones and POS terminals, various payment platforms such Apple Pay), we are about to enter the second phase of growth for the theme, which is mass adoption of payment solutions by consumers. Indeed, the increasing marketing around payment platforms and the deployment of value-added services (such as rewards, loyalty and couponing) should give a major boost to consumer engagement over 2018-20. Longer term, powerful catalysts (in-car payments, virtual reality shopping, government incentives…) should make mobile payments ubiquitous.
Equity 22-Apr-14 Euro Total Return IND1AMPE CH0239656462 CH0239656603 CH0239657494 Société Générale 100.0 203.9 1.15 0.77 1.12 MSCI World Net Return (EUR)
MONTHLY RETURNS (%)
Jan-18
Jul-17
Oct-17
Jan-17
Apr-17
Jul-16
Oct-16
Jan-16
Apr-16
16-Oct-14
Jul-15
94.6
Oct-15
All Time Low
Jan-15
22-Jan-18
Apr-15
Date
207.8
Jul-14
Price
All Time High
-1.6% -0.6% -3.7% -1.8%
210 200 190 180 170 160 150 140 130 120 110 100 90
ANNUAL 7.2% 36.3% 0.0% 25.0% 11.2%
Oct-14
HIGHS/LOWS
DEC
Apr-14
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV 2018 8.9% -1.6% 2017 4.3% 7.1% 2.9% 1.6% 4.1% -1.4% 2.0% 2.4% 2.8% 8.8% -1.2% 2016 -5.6% -1.5% 0.7% 0.7% 7.5% -3.9% 2.7% -0.5% 1.7% -0.3% -0.3% 2015 6.1% 4.9% 4.8% 1.0% 6.5% -8.9% 2.9% -4.1% -2.9% 9.4% 8.5% 2014 0.2% 5.6% 2.1% -6.1% 4.4% 0.0% -1.1% 8.3%
February 2018 highlights The AtonRâ Mobile Payments certificate (EUR) fell 1.6% in February, outperforming the MSCI World Net Return (EUR) by 0.5%. Year-to-date, it outperforms its reference index by 7.8% and launch-to-date (April 22, 2014 launch), it outperforms by 50.4%. Back in December, we commented that even if adoption of mobile payments had been slow in the developed world, there were finally some signs of traction in 2017 that boded well for 2018. Notably, Samsung Pay keeps gaining ground as its loyalty program Samsung Rewards sees 25% growth every month and is a source of increased user engagement (Samsung’s wallet records 1.3 monthly transactions on average, nearly double Apple’s number). Apple Pay was not left on the sidelines as the Tech giant reported that its active users more than doubled and transactions more than tripled over the past year, without revealing more specific numbers. Interestingly, Loup Ventures came up with detailed estimates about Apple Pay and considers that there were 127 million users at the end of 2017 (from 62 million users a year ago). While the growth is impressive, its’ worth noting that Apple pay users represent only 16% of the global iPhone user base, suggesting that we are still in the very early stages of mobile payments adoption in the developed world and that there’s significant upside for companies exposed to the theme, especially in the US as the majority of Apple Pay transactions (3 out of 4) come from international markets according to Loup Ventures. As the number of banks and retailers supporting Apple Pay (and other digital wallets) goes up (+41% for banks in 2017), we remain convinced that mobile payments usage in the developed world could get close to usage numbers in China (close to 100%) over the next 5 years, with most of the growth being achieved over 2018-20. On the earnings side, Square, our largest position, delivered once again. While its core payment business firmly grows around 30% (a trend likely to last or even to accelerate in light of the above comments), its new businesses (loans to small businesses, payroll processing, gift cards…) were, in line with our scenario, a major source of upside in the last quarter with revenues up 96% vs. 84% in the previous quarter. The picture was a bit more mixed at PayPal, another top position in the portfolio. Despite solid earnings and FY18 guidance, the stock suffered from the announcement that eBay was developing its own payment solution that would become the primary checkout option on the marketplace at the expense of PayPal from 2021. While the impact on PayPal’s earnings is estimated around -10% from 2021, we believe it will be largely manageable as PayPal will not be restricted anymore to work with eBay rivals and as the company keeps expanding its offering of financial and banking services.
AtonRâ Partners SA 12 rue Pierre Fatio - 1204 Geneva - Switzerland - +41 22 310 15 01 - http://www.atonra.ch
ATONRÂ MOBILE PAYMENTS CERTIFICATE
Top 3 Performers
Worst 3 Performers
Name
Name
AMAZON.COM INC APPLE INC GLOBAL PAYMENTS INC
WORLDLINE SA PAYPAL HOLDINGS INC ALIBABA GROUP HOLDING-SP ADR
Top 3 Holdings Name SQUARE INC - A WIRECARD AG PAYPAL HOLDINGS INC
Geographical Breakdown
Currency exposure
Japan 4.6% 16.0%
58.8%
20.6%
4.6% 3.2%
Emerging markets
Asset Allocation
KRW
20.6%
Europe
JPY
Equities
EUR
Cash
71.6% US
USD
100%
Important Information All net estimated returns are based on unaudited, internally prepared assessments and have not been independently verified. The net estimated returns are subject to adjustments as a result of changes or delays in AtonRâ's calculations of the profit and loss of the portfolio. Any such adjustments could have a material impact on the estimated net returns of the AtonRâ Basket. Net returns are reported after deduction of AtonRâ's management and/or performance fees. Past performance is not indicative or a guarantee of future results. Investment losses may occur, and investors could lose some or all of their investment. Although AtonRâ Partners SA believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this report. The information contained in these publications is sent to you by way of information and cannot be divulged to a third party without the prior consent of AtonRâ Partners. It cannot be considered under any circumstances as an offer to sell, or a solicitation of any offer to buy financial instruments. Any indices cited herein are provided only as examples of general market performance and no index is directly comparable to the past or future performance of the Certificate. It should not be assumed that the Certificate will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between the Certificate’s returns and any index returns. Any material provided to you is intended only for discussion purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security and should not be relied upon by you in evaluating the merits of investing in any securities.
AtonRâ Partners SA 12 rue Pierre Fatio - 1204 Geneva - Switzerland - +41 22 310 15 01 - http://www.atonra.ch
Main Features Asset Class Inception Date Currency Type of Return Ticker (EUR Inst. Class) ISIN (inst. Class EUR) ISIN (Retail Class EUR) ISIN (Retail $USD Class) Issuer Issue Price Last Price Sharpe Ratio Correlation Beta Benchmark
While the mobile payment infrastructure is now in place (NFC-enabled phones and POS terminals, various payment platforms such Apple Pay), we are about to enter the second phase of growth for the theme, which is mass adoption of payment solutions by consumers. Indeed, the increasing marketing around payment platforms and the deployment of value-added services (such as rewards, loyalty and couponing) should give a major boost to consumer engagement over 2018-20. Longer term, powerful catalysts (in-car payments, virtual reality shopping, government incentives…) should make mobile payments ubiquitous.
Equity 22-Apr-14 Euro Total Return IND1AMPE CH0239656462 CH0239656603 CH0239657494 Société Générale 100.0 203.9 1.15 0.77 1.12 MSCI World Net Return (EUR)
MONTHLY RETURNS (%)
Jan-18
Jul-17
Oct-17
Jan-17
Apr-17
Jul-16
Oct-16
Jan-16
Apr-16
16-Oct-14
Jul-15
94.6
Oct-15
All Time Low
Jan-15
22-Jan-18
Apr-15
Date
207.8
Jul-14
Price
All Time High
-1.6% -0.6% -3.7% -1.8%
210 200 190 180 170 160 150 140 130 120 110 100 90
ANNUAL 7.2% 36.3% 0.0% 25.0% 11.2%
Oct-14
HIGHS/LOWS
DEC
Apr-14
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV 2018 8.9% -1.6% 2017 4.3% 7.1% 2.9% 1.6% 4.1% -1.4% 2.0% 2.4% 2.8% 8.8% -1.2% 2016 -5.6% -1.5% 0.7% 0.7% 7.5% -3.9% 2.7% -0.5% 1.7% -0.3% -0.3% 2015 6.1% 4.9% 4.8% 1.0% 6.5% -8.9% 2.9% -4.1% -2.9% 9.4% 8.5% 2014 0.2% 5.6% 2.1% -6.1% 4.4% 0.0% -1.1% 8.3%
February 2018 highlights The AtonRâ Mobile Payments certificate (EUR) fell 1.6% in February, outperforming the MSCI World Net Return (EUR) by 0.5%. Year-to-date, it outperforms its reference index by 7.8% and launch-to-date (April 22, 2014 launch), it outperforms by 50.4%. Back in December, we commented that even if adoption of mobile payments had been slow in the developed world, there were finally some signs of traction in 2017 that boded well for 2018. Notably, Samsung Pay keeps gaining ground as its loyalty program Samsung Rewards sees 25% growth every month and is a source of increased user engagement (Samsung’s wallet records 1.3 monthly transactions on average, nearly double Apple’s number). Apple Pay was not left on the sidelines as the Tech giant reported that its active users more than doubled and transactions more than tripled over the past year, without revealing more specific numbers. Interestingly, Loup Ventures came up with detailed estimates about Apple Pay and considers that there were 127 million users at the end of 2017 (from 62 million users a year ago). While the growth is impressive, its’ worth noting that Apple pay users represent only 16% of the global iPhone user base, suggesting that we are still in the very early stages of mobile payments adoption in the developed world and that there’s significant upside for companies exposed to the theme, especially in the US as the majority of Apple Pay transactions (3 out of 4) come from international markets according to Loup Ventures. As the number of banks and retailers supporting Apple Pay (and other digital wallets) goes up (+41% for banks in 2017), we remain convinced that mobile payments usage in the developed world could get close to usage numbers in China (close to 100%) over the next 5 years, with most of the growth being achieved over 2018-20. On the earnings side, Square, our largest position, delivered once again. While its core payment business firmly grows around 30% (a trend likely to last or even to accelerate in light of the above comments), its new businesses (loans to small businesses, payroll processing, gift cards…) were, in line with our scenario, a major source of upside in the last quarter with revenues up 96% vs. 84% in the previous quarter. The picture was a bit more mixed at PayPal, another top position in the portfolio. Despite solid earnings and FY18 guidance, the stock suffered from the announcement that eBay was developing its own payment solution that would become the primary checkout option on the marketplace at the expense of PayPal from 2021. While the impact on PayPal’s earnings is estimated around -10% from 2021, we believe it will be largely manageable as PayPal will not be restricted anymore to work with eBay rivals and as the company keeps expanding its offering of financial and banking services.
AtonRâ Partners SA 12 rue Pierre Fatio - 1204 Geneva - Switzerland - +41 22 310 15 01 - http://www.atonra.ch
ATONRÂ MOBILE PAYMENTS CERTIFICATE
Top 3 Performers
Worst 3 Performers
Name
Name
AMAZON.COM INC APPLE INC GLOBAL PAYMENTS INC
WORLDLINE SA PAYPAL HOLDINGS INC ALIBABA GROUP HOLDING-SP ADR
Top 3 Holdings Name SQUARE INC - A WIRECARD AG PAYPAL HOLDINGS INC
Geographical Breakdown
Currency exposure
Japan 4.6% 16.0%
58.8%
20.6%
4.6% 3.2%
Emerging markets
Asset Allocation
KRW
20.6%
Europe
JPY
Equities
EUR
Cash
71.6% US
USD
100%
Important Information All net estimated returns are based on unaudited, internally prepared assessments and have not been independently verified. The net estimated returns are subject to adjustments as a result of changes or delays in AtonRâ's calculations of the profit and loss of the portfolio. Any such adjustments could have a material impact on the estimated net returns of the AtonRâ Basket. Net returns are reported after deduction of AtonRâ's management and/or performance fees. Past performance is not indicative or a guarantee of future results. Investment losses may occur, and investors could lose some or all of their investment. Although AtonRâ Partners SA believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this report. The information contained in these publications is sent to you by way of information and cannot be divulged to a third party without the prior consent of AtonRâ Partners. It cannot be considered under any circumstances as an offer to sell, or a solicitation of any offer to buy financial instruments. Any indices cited herein are provided only as examples of general market performance and no index is directly comparable to the past or future performance of the Certificate. It should not be assumed that the Certificate will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between the Certificate’s returns and any index returns. Any material provided to you is intended only for discussion purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security and should not be relied upon by you in evaluating the merits of investing in any securities.
AtonRâ Partners SA 12 rue Pierre Fatio - 1204 Geneva - Switzerland - +41 22 310 15 01 - http://www.atonra.ch
