Sasfin Innovation Portfolio - Quarterly Review - Q2 2024

Over the past quarter, our strategic evolution has ignited a transformative journey within our Innovation portfolio. We have transitioned our focus from ETF exposure to harnessing the potential of individual stock holdings, particularly within the cybersecurity sector. Our analysis has shown greater performance compared to ETFs, prompting us to increase our investment in Palo Alto Networks (PANW) and to initiate a position in CrowdStrike Holdings, Inc. (CRWD). In addition to cybersecurity, we have explored new opportunities with Medpace Holdings, Inc. (MEDP), a trailblazer in innovative trial designs such as adaptive, decentralised, and virtual trials. Medpace's commitment to enhancing trial efficiency through AI, machine learning, and real-world data analytics underscores our dedication to investing in visionary companies that lead their industries.

Since the beginning of the year, overall software spending has been slower than anticipated, primarily due to gradual adoption of Generative AI technologies and cloud migrations. However, cybersecurity remains a resilient segment. Increasing threats, stringent regulatory requirements, and heightened board-level engagement continue to drive robust demand in this sector, even amidst restrained spending conditions. In response to this landscape, we strategically exited our position in the First Trust Nasdaq Cybersecurity ETF. While the ETF provided broad exposure, it did not match the dynamism and exceptional performance demonstrated by leading cybersecurity stocks (see figure 1). This realisation prompted us to reallocate our investments into more promising individual stocks within this dynamic and high-performing sector.

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