Stock Fund That Beat 99% of Peers Bets That Athleisure’s Here to Stay

(Bloomberg) --

A Sydney-based global equity fund that’s beating almost all its peers is betting the athleisure trend is here to stay as more consumers prioritize health and wellness in response to the coronavirus.

Insync Funds Management’s Monik Kotecha re-invested in Adidas AG after its share price plunged in March’s stock rout amid virus-induced store closures. The firm’s Insync Global Capital Aware Fund has outperformed 99% of peers over the last three years, according to data compiled by Bloomberg.

The virus “has raised the whole aspect about being healthy, well and fit,” prompting consumers to buy more athletic wear, said Kotecha, Insync’s chief investment officer. He added that he took advantage of the March selloff to purchase shares in the German sportswear giant.

The fund previously owned Adidas because of expected growth in the health and fitness industry, but dumped shares late last year after valuations soared. The stock plunged as much as 47% from a record high in January through a low in March.

The fund is up about 12% this year as put options provided protection during the market downturn and as another of its holdings, PayPal Holdings Inc., surged with a ramp up in digital payments amid lockdowns. The fund also owns drugmaker Roche Holding AG, a leader in cancer therapy that’s involved in coronavirus testing.

Aside from his return to Adidas, other updates Kotecha made during the March rout included dumping tax software firm Intuit Inc. amid mounting U.S. job losses. He also offloaded shares in Amadeus IT Group SA, an operator of software used by the travel industry to book and sell flights.

Kotecha held on to Booking Holdings Inc. even though the travel industry reels from decreased demand and restrictions. That’s because the online reservations platform went into the pandemic in a better financial position than competitors Expedia Group Inc. and Airbnb Inc., which have both had to raise funds to withstand the virus impact, he said.

“Both of those companies are weaker coming out of this crisis, and it’s going to allow Booking Holdings to be even stronger,” he said. “If you’re a hotel company that’s looking to get your bookings up again after this crisis, you’re going to go to the strongest player to help you because you need to recover quickly.”

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