Aurora Investment Solutions (AIS)

💼 Internship Opportunity at Aurora Investment Solutions We are looking for a motivated intern with an econometrics background to join our team. This is a great opportunity to to work alongside industry experts, develop advanced quantitative models, and contribute to high-impact research projects. 📧 Interested? Apply today by reviewing the full description in the attached document.

Investment Idea: Commodities, Capitalizing On Persistent Inflation While inflation has been decelerating in the US and globally, there is increasing evidence that it could prove more persistent than expected and continue to stay above official targets over the coming months. Despite headlines of Quantitative Tightening, the Fed has been using implicit tools to provide “stealth” liquidity since 2022 and acted to maintain relatively loose financial conditions, in turn supporting financial markets and the economy. They lately decided to start cutting rates regardless of the resilient economy and despite missing nearly all inflation targets. Similarly, the US Treasury has been indirectly supporting risk assets and the economy by shifting the issuance of debt towards T-bills and shorter dated coupons. The resulting scarcity of longer-dated coupon bonds drove Treasury bond prices higher and yields consequently lower. These actions were likely designed to cap yields to support economic growth and avoid spiralling interest payments which are already expected to jump by 18 to 20% next year. Additionally, commercial banks are eagerly buying these shorter issuances to fulfil their specific needs. This monetization of fiscal deficits has historically proven to be inflationary. Finally, the anticipated Trump policies could lead to demand-pull inflationary dynamics (increased government spending, reduced taxes), cost-push inflation (tariffs and trade barriers, reshoring of supply chains) and wage-price spiral (tighter immigration leading to smaller pool of workers and therefore higher wages). Equities and bonds tend to be positively correlated in high-inflation environments. While equities perform best under low and stable inflation, rising inflation beyond 2-3% leads to devaluation of both asset classes, with investors favoring real assets instead. Commodities are expected to perform in this configuration. For access to the full presentation or more details, please reach out to our team. Romain Duchenne: rd@aurora-investmentsolutions.com Hugo Poupinel: hp@aurora-investmentsolutions.com For more information on our company, please visit our website: https://lnkd.in/eFBWjTG4

Investment Idea: Semiconductors, the Backbone of Global Innovation Semiconductors are the foundation of modern industries, driving innovation and economic growth. In 2023, the global semiconductor market generated $500 billion in revenue and is projected to grow at a robust CAGR of 11.8%, reaching $981 billion by 2029. These essential components power electric vehicles, smart electronics, computing devices, and 5G networks, making them indispensable across industries. Governments worldwide are investing heavily to strengthen semiconductor R&D and manufacturing, with initiatives like the U.S. CHIPS Act ($280B), the EU's €43B Chips Act, and China's $48B Big Fund aimed at enhancing supply chain resilience and fostering innovation. Meanwhile, surging demand and geopolitical tensions have driven unprecedented mergers and acquisitions, as companies secure advanced technologies and accelerate innovation. For investors, the iShares Semiconductor ETF offers diversified exposure to leading companies in the semiconductor sector. Delivering a 24% annualized return over five years, significantly outperforming the S&P 500’s 14%, it provides strong growth potential. Our structured note enables investors to participate to the upside potential of the ETF, whilst limiting their exposure to the downside movement. For access to the full presentation or more details, please reach out to our team. Romain Duchenne: rd@aurora-investmentsolutions.com Hugo Poupinel: hp@aurora-investmentsolutions.com For more information on our company, please visit our website: https://lnkd.in/eFBWjTG4

Investment Idea: Nuclear Energy, Powering a Sustainable Future Nuclear energy is one of the cleanest sources of power available today, emitting significantly less carbon than solar, biomass, geothermal, and hydropower, and matching the carbon footprint of wind. While this sector has faced significant scrutiny due to past incidents such as the Chernobyl and Fukushima disasters, recent technological advancements in reactor design and nuclear waste management have significantly improved the safety and sustainability of nuclear production. It offers a stable, diversified energy source that reduces reliance on imported fossil fuels while providing consistent baseload power to complement intermittent renewable sources. This stability enhances energy security and ensures resilience in the face of geopolitical disruptions. Since COP 28, 25 countries have committed to tripling nuclear capacity by 2050. Governments worldwide are passing legislation and funding to support next-generation reactors, reflecting a coordinated push toward a nuclear-powered future. As AI grows, global electricity consumption is set to rise. Tech giants like Google and Microsoft are already turning to nuclear to power energy-hungry data centers needed for AI as it offers a clean, reliable solution to meet these demands, making it vital for a sustainable digital future. For access to the full presentation or more details, please reach out to our team. Romain Duchenne: rd@aurora-investmentsolutions.com Hugo Poupinel: hp@aurora-investmentsolutions.com For more information on our company, please visit our website: https://lnkd.in/eFBWjTG4

Investment Idea: Harnessing the Power of 5G and Communication Services The global 5G market is poised for remarkable expansion, projected to grow at a compound annual growth rate (CAGR) of approximately 16%. This growth is fueled by the widespread adoption of 5G-enabled devices, surging demand for high-speed connectivity, advancements in IoT applications, and significant government investments in network infrastructure. 5G technology’s economic impact cannot be overstated—it is forecasted to contribute an estimated US$1.3 trillion to global GDP by 2030. Key industries such as healthcare, smart utilities, and industrial manufacturing are already reaping the benefits of enhanced connectivity, signaling transformative shifts across multiple sectors. The adoption of 5G is progressing at an unprecedented pace, growing from just 12.69 million subscriptions in 2019 to an expected 4.37 billion by 2027. This trajectory underscores the rapid initial uptake, mid-term acceleration, and eventual ubiquity of 5G technology worldwide. Meanwhile, the Communication Services sector has solidified its position as a key growth driver. In 2023, it delivered an impressive 54.4% return, emerging as one of the top-performing sectors. Furthermore, its earnings are projected to grow by 21% in 2024, positioning the sector as a leader in driving market performance. For access to the full presentation or more details, please reach out to our team. Romain Duchenne: rd@aurora-investmentsolutions.com Hugo Poupinel: hp@aurora-investmentsolutions.com For more information on our company, please visit our website: https://lnkd.in/eFBWjTG4

Investment Idea: Memory Coupon Notes on Trump Baskets Following Donald Trump's recent election victory, several policy shifts are anticipated that could significantly impact various sectors, notably artificial intelligence (AI), oil, and financial services. For AI, regulatory restrictions may be lifted, fostering innovation and potentially boosting growth for tech companies. In energy, an emphasis on increased domestic oil production - "drill, baby, drill" - and relaxed environmental regulations could enhance profitability for oil and gas producers. The financial sector is also poised to benefit from reduced compliance costs and expanded lending opportunities, making these industries attractive for investors. The chosen structure to play this theme is the memory coupon note. It is a structured product offering attractive conditional coupon payments with high capital protection, ideal for risk-averse investors seeking enhanced yields over traditional fixed income. Unlike most revenue products that risk the principal, this note places risk on coupon payments, introducing opportunity cost rather than capital risk. Coupons are paid semi-annually if the underlying asset or index meets a performance barrier. If not, a “memory” feature allows missed coupons to be recovered in future periods if conditions improve, giving flexibility and reducing the impact of temporary underperformance. For access to the full presentation or more details, please reach out to our team. Romain Duchenne: rd@aurora-investmentsolutions.com Hugo Poupinel: hp@aurora-investmentsolutions.com For more information on our company, please visit our website: https://lnkd.in/eFBWjTG4

Investment Idea: Robotics and Automation - Driving Future Growth The global robotics market is expected to grow at a CAGR of 15% over the next 9 Years. This market was valued at approximately $80 billion in 2023 and is projected to exceed $280 billion by 2032. This growth is and will be driven by rapid advancements in AI, machine learning, and the growing demand for automation. As technology progresses, robotics is set to transform various sectors, making it an exciting area for forward-looking investments. With aging populations and increasing labor shortages, countries like China, Japan, and South Korea are turning to robotics to stay competitive. Simultaneously, North America and Europe are expanding automation into healthcare, logistics, and customer service, recognizing robotics as a critical solution for productivity and service enhancement. Robotics applications are revolutionizing healthcare through surgical and rehabilitation robots, optimizing manufacturing and logistics with faster production, and reshaping customer experience in retail and hospitality. Additionally, autonomous equipment is addressing labor shortages and food supply challenges in agriculture, showcasing robotics' diverse utility across industries. Falling production costs further bolster this growth. As sensor, processor, and battery costs decline, robotics is becoming increasingly accessible. Prices of industrial robots have halved from 2011 to 2022 and are expected to halve again by 2025, paving the way for widespread adoption. For investors, the robotics sector offers promising opportunities. In the U.S., Robotics & Automation ETFs gained the strongest attraction in 2023. The iShares Automation & Robotics UCITS ETF, for example, provides diversified exposure to innovative leaders in robotics across various industries and regions, balancing growth potential with risk management. For access to the full presentation or more details, please reach out to our team. Romain Duchenne: rd@aurora-investmentsolutions.com Hugo Poupinel: hp@aurora-investmentsolutions.com For more information on our company, please visit our website: https://lnkd.in/eFBWjTG4

Investment Idea: Robotics and Automation - Driving Future Growth The global robotics market is expected to grow at a CAGR of 15% over the next 9 Years. This market was valued at approximately $80 billion in 2023 and is projected to exceed $280 billion by 2032. This growth is and will be driven by rapid advancements in AI, machine learning, and the growing demand for automation. As technology progresses, robotics is set to transform various sectors, making it an exciting area for forward-looking investments. With aging populations and increasing labor shortages, countries like China, Japan, and South Korea are turning to robotics to stay competitive. Simultaneously, North America and Europe are expanding automation into healthcare, logistics, and customer service, recognizing robotics as a critical solution for productivity and service enhancement. Robotics applications are revolutionizing healthcare through surgical and rehabilitation robots, optimizing manufacturing and logistics with faster production, and reshaping customer experience in retail and hospitality. Additionally, autonomous equipment is addressing labor shortages and food supply challenges in agriculture, showcasing robotics' diverse utility across industries. Falling production costs further bolster this growth. As sensor, processor, and battery costs decline, robotics is becoming increasingly accessible. Prices of industrial robots have halved from 2011 to 2022 and are expected to halve again by 2025, paving the way for widespread adoption. For investors, the robotics sector offers promising opportunities. In the U.S., Robotics & Automation ETFs gained the strongest attraction in 2023. The iShares Automation & Robotics UCITS ETF, for example, provides diversified exposure to innovative leaders in robotics across various industries and regions, balancing growth potential with risk management. For access to the full presentation or more details, please reach out to our team. Romain Duchenne: rd@aurora-investmentsolutions.com Hugo Poupinel: hp@aurora-investmentsolutions.com For more information on our company, please visit our website: https://lnkd.in/eFBWjTG4

Investment Idea: High Dividend Stocks - Strong Demand Expected A vast majority of central banks have started their interest rate cutting cycles and the market is expecting 6 more rate cuts in the US. When interest rates decline, the yields on bonds and other fixed-income securities fall as well, making high-dividend stocks more attractive to income-seeking investors. With reduced income from traditional safe-haven assets, investors often turn to dividend-paying stocks for higher returns. Additionally, financial markets have been experiencing spikes in volatility over the past few months, being due to the unwinding of the Yen carry-trade, the US elections or some disappointing economic prints. This uncertainty makes established companies with stable cash flows more attractive as investors seek to mitigate potential risks. The recent rise observed in US yields is likely associated with an increased probability of a Donald Trump victory. Indeed, the market expects a wider fiscal deficit under the republican candidate, which would revive inflationary pressures. If inflation proves to be stickier than expected and growth remains moderate, established companies with strong pricing power (typically found among high-dividend payers) should fare better than growth stocks due to their ability to pass increased costs onto customers without experiencing a drop in demand. The selected underlying offers a balanced sectorial mix which mitigates concentration risk and is less correlated to the business cycle compared to the S&P 500. It also displays cheaper valuations (average P/E Ratio of 17.6 vs 28.2 for SPX), a beta of 0.85 and a distribution yield of 3.5% (vs 1.2% for SPX). This last point is crucial because the proposed product leverages the funding on the notes and dividends payment to provide a significant participation to the upside with a relatively tight cap, thus maximizing the probability to achieve attractive returns over the next few years. For access to the full presentation or more details, please reach out to our team. Romain Duchenne: rd@aurora-investmentsolutions.com Hugo Poupinel: hp@aurora-investmentsolutions.com For more information on our company, please access the website below: https://lnkd.in/eFBWjTG4

Investment Idea: Oil - A Strategic Play Amid Supply Constraints As the global demand for energy continues to rise, the role of oil in supporting economic growth remains critical. However, the dynamics of the oil market are evolving, with supply constraints playing an increasingly important role in shaping price trends.   Oil inventories in critical regions such as the U.S. and Europe are at historically low levels, leaving limited buffer supply. This creates heightened vulnerability, where any supply disruptions or spikes in demand can significantly impact prices as markets struggle to secure scarce resources.   Institutional investors and traders are ramping up their positions in oil futures, reflecting strong demand for oil-related options. The skew in the market shows higher premiums for calls over puts, signaling prevailing bullish sentiment driven by supply concerns. This demand for oil-linked financial products is expected to persist as long as supply risks remain elevated.   The ongoing conflict in the Middle East, especially involving major oil producers, poses significant risks to global oil supply chains. Any disruption of shipments from key players like Saudi Arabia or Iran could trigger substantial price surges due to increased geopolitical risk.   The proposed product allows the investor to participate to the potential upside of oil prices with leverage up to the cap level and offers capital protection on the downside.   For access to the full presentation or more details, please reach out to our team. Romain Duchenne: rd@aurora-investmentsolutions.com Hugo Poupinel: hp@aurora-investmentsolutions.com For more information on our company, please access the website below: https://lnkd.in/eFBWjTG4