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On your bike – Shimano and cycling

Between the UEFA European Football Championships, the familiar rain spattered elegance of Wimbledon and the looming Paris Olympics, we have been spoilt with a surfeit of summer sport. But over on the continent perhaps the most grueling, demanding of all sporting events is currently unfurling in operatic fashion: the Tour De France.

This legendary race typically covers over 3000km and isn’t across gentle terrain. The riders tackle brutal climbs on the Pyrenees, the Alps, facing gradients of more than 20 degrees, burning as many as 8,000 calories a day, all in the face of fierce summer heat, occasional downpours, and even the odd fan interruption. It is certainly not for the faint hearted.

But bikes have uses simultaneously far more mundane, but ultimately more important, than the completion of an epically long race. Cycling is a fantastic way to improve individual health, whilst at the same time lightening humanity’s environmental footprint.

On the health front, cycling is a great way to improve cardiovascular health, reducing the risk of heart disease, strokes, and even type 2 diabetes, all amongst the biggest causes of modern mortality. Better health is an innate individual good, but the economic impacts of a healthier population are also remarkable. The American Heart Association estimates that physical inactivity costs the US healthcare system a staggering $337 billion annually, whilst a study by the Dutch National Institute for Public Health and the Environment found that cyclists averaged 1.4 fewer sick days per year compared to non-cyclists.

Donning some Lycra and saddling up could not only lighten the burden on our over-taxed healthcare systems, but it could ingratiate you with your employer through better attendance rates!

Moving from the health of the individual to that of the planet, efforts to decarbonize our economy and lifestyles have been underway for decades, with some notable successes, for example the European Union’s emissions have dropped 31% since 1990. The UK’s have dropped much further again. Cycling has a part to play in the ongoing global drive to decarbonize. Transportation is a major source of greenhouse gas emissions, contributing around 28% of US emissions. The carbon footprint of cycling one kilometer is usually in the range of 16 to 50 grams per km compared to 170 grams for a petrol car1.

We like investments in businesses that are providing solutions to vital, enduring challenges in the world. Because of the criticality of what they do, businesses like these should see sustained demand for their products and services across time. They should swim in bigger and bigger economic pools, and if they have differentiated products and services, with wide moats, they should be able to translate these bigger pools into larger profits, and better share price performance.

Cycling ticks those boxes; it enables people to live longer, healthier lives, which is a core human desire, and it helps protect the environment, which is a global necessity. Our investment in the cycling space is Shimano, the global leader in selling gears and brakes into the cycling industry, with a global market share of over 70%. Shimano is multiples larger than its nearest competitors, and this allows it to invest heavily in R&D, staying ahead of its rivals, making it famous for the safety, quality, and durability of its products.

As cycling grows in popularity across emerging markets, Shimano is set to capitalize on this growth too, and in recent quarters it has seen growth in China, where there is increased interest personal health and fitness.

Shimano is also positioning itself for new trends in the cycling market, for example e-bikes, where is has a strong component line-up, and indeed where its core competency of brakes is particularly necessary, because the increase weight of e-bikes requires powerful braking systems.

Shimano is a true global winner, enabling people to live healthier lives, whilst also protecting the health of the planet that we all depend on. It is certainly not a coincidence that of the 22 teams in the Tour De France this year, 18 are using Shimano Dura-Ace product, products built to weather perhaps the toughest sport of all.

The mention of any specific shares should not be taken as a recommendation to deal.

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On your bike – Shimano and cycling

1 https://ourworldindata.org/travel-carbon-footprint

Important information

For use by professional clients and/or equivalent investor types in your jurisdiction (not to be used with or passed on to retail clients).

 

This document is intended for informational purposes only and should not be considered representative of any particular investment. This should not be considered an offer or solicitation to buy or sell any securities or other financial instruments, or to provide investment advice or services. Investing involves risk including the risk of loss of principal. Your capital is at risk. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The value of investments is not guaranteed, and therefore an investor may not get back the amount invested. International investing involves certain risks and volatility due to potential political, economic or currency fluctuations and different financial and accounting standards. The securities included herein are for illustrative purposes only, subject to change and should not be construed as a recommendation to buy or sell. Securities discussed may or may not prove profitable. The views expressed are as of the date given, may change as market or other conditions change and may differ from views expressed by other Columbia Threadneedle Investments (Columbia Threadneedle) associates or affiliates. Actual investments or investment decisions made by Columbia Threadneedle and its affiliates, whether for its own account or on behalf of clients, may not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not take into consideration individual investor circumstances. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon and risk tolerance. Asset classes described may not be suitable for all investors. Past performance does not guarantee future results, and no forecast should be considered a guarantee either. Information and opinions provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. This document and its contents have not been reviewed by any regulatory authority.

 

In Australia: Issued by Threadneedle Investments Singapore (Pte.) Limited [“TIS”], ARBN 600 027 414. TIS is exempt from the requirement to hold an Australian financial services licence under the Corporations Act and relies on Class Order 03/1102 in marketing and providing financial services to Australian wholesale clients as defined in Section 761G of the Corporations Act 2001. TIS is regulated in Singapore (Registration number: 201101559W) by the Monetary Authority of Singapore under the Securities and Futures Act (Chapter 289), which differ from Australian laws.

 

In Singapore: Issued by Threadneedle Investments Singapore (Pte.) Limited, 3 Killiney Road, #07-07, Winsland House 1, Singapore 239519, which is regulated in Singapore by the Monetary Authority of Singapore under the Securities and Futures Act (Chapter 289). Registration number: 201101559W. This advertisement has not been reviewed by the Monetary Authority of Singapore.

 

In Hong Kong: Issued by Threadneedle Portfolio Services Hong Kong Limited 天利投資管理香港有限公司. Unit 3004, Two Exchange Square, 8 Connaught Place, Hong Kong, which is licensed by the Securities and Futures Commission (“SFC”) to conduct Type 1 regulated activities (CE:AQA779). Registered in Hong Kong under the Companies Ordinance (Chapter 622), No. 1173058.

 

In Japan: Issued by Columbia Threadneedle Investments Japan Co., Ltd. Financial Instruments Business Operator, The Director-General of Kanto Local Finance Bureau (FIBO) No.3281, and a member of Japan Investment Advisers Association and Type II Financial Instruments Firms Association.

 

In UK: Issued by Threadneedle Asset Management Limited. Registered in England and Wales, Registered No. 573204, Cannon Place, 78 Cannon Street, London EC4N 6AG, United Kingdom. Authorised and regulated in the UK by the Financial Conduct Authority.

 

In the EEA: Issued by Threadneedle Management Luxembourg S.A. Registered with the Registre de Commerce et des Societes (Luxembourg), Registered No. B 110242, 44, rue de la Vallée, L-2661 Luxembourg, Grand Duchy of Luxembourg.

 

In Switzerland: Issued by Threadneedle Portfolio Services AG, Registered address: Claridenstrasse 41, 8002 Zurich, Switzerland.

 

This document is distributed by Columbia Threadneedle Investments (ME) Limited, which is regulated by the Dubai Financial Services Authority (DFSA). For Distributors: This document is intended to provide distributors’ with information about Group products and services and is not for further distribution. For Institutional Clients: The information in this document is not intended as financial advice and is only intended for persons with appropriate investment knowledge and who meet the regulatory criteria to be classified as a Professional Client or Market Counterparties and no other Person should act upon it.  Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.

 

 

 

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Important information

For use by professional clients and/or equivalent investor types in your jurisdiction (not to be used with or passed on to retail clients).

 

This document is intended for informational purposes only and should not be considered representative of any particular investment. This should not be considered an offer or solicitation to buy or sell any securities or other financial instruments, or to provide investment advice or services. Investing involves risk including the risk of loss of principal. Your capital is at risk. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The value of investments is not guaranteed, and therefore an investor may not get back the amount invested. International investing involves certain risks and volatility due to potential political, economic or currency fluctuations and different financial and accounting standards. The securities included herein are for illustrative purposes only, subject to change and should not be construed as a recommendation to buy or sell. Securities discussed may or may not prove profitable. The views expressed are as of the date given, may change as market or other conditions change and may differ from views expressed by other Columbia Threadneedle Investments (Columbia Threadneedle) associates or affiliates. Actual investments or investment decisions made by Columbia Threadneedle and its affiliates, whether for its own account or on behalf of clients, may not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not take into consideration individual investor circumstances. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon and risk tolerance. Asset classes described may not be suitable for all investors. Past performance does not guarantee future results, and no forecast should be considered a guarantee either. Information and opinions provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. This document and its contents have not been reviewed by any regulatory authority.

 

In Australia: Issued by Threadneedle Investments Singapore (Pte.) Limited [“TIS”], ARBN 600 027 414. TIS is exempt from the requirement to hold an Australian financial services licence under the Corporations Act and relies on Class Order 03/1102 in marketing and providing financial services to Australian wholesale clients as defined in Section 761G of the Corporations Act 2001. TIS is regulated in Singapore (Registration number: 201101559W) by the Monetary Authority of Singapore under the Securities and Futures Act (Chapter 289), which differ from Australian laws.

 

In Singapore: Issued by Threadneedle Investments Singapore (Pte.) Limited, 3 Killiney Road, #07-07, Winsland House 1, Singapore 239519, which is regulated in Singapore by the Monetary Authority of Singapore under the Securities and Futures Act (Chapter 289). Registration number: 201101559W. This advertisement has not been reviewed by the Monetary Authority of Singapore.

 

In Hong Kong: Issued by Threadneedle Portfolio Services Hong Kong Limited 天利投資管理香港有限公司. Unit 3004, Two Exchange Square, 8 Connaught Place, Hong Kong, which is licensed by the Securities and Futures Commission (“SFC”) to conduct Type 1 regulated activities (CE:AQA779). Registered in Hong Kong under the Companies Ordinance (Chapter 622), No. 1173058.

 

In Japan: Issued by Columbia Threadneedle Investments Japan Co., Ltd. Financial Instruments Business Operator, The Director-General of Kanto Local Finance Bureau (FIBO) No.3281, and a member of Japan Investment Advisers Association and Type II Financial Instruments Firms Association.

 

In UK: Issued by Threadneedle Asset Management Limited. Registered in England and Wales, Registered No. 573204, Cannon Place, 78 Cannon Street, London EC4N 6AG, United Kingdom. Authorised and regulated in the UK by the Financial Conduct Authority.

 

In the EEA: Issued by Threadneedle Management Luxembourg S.A. Registered with the Registre de Commerce et des Societes (Luxembourg), Registered No. B 110242, 44, rue de la Vallée, L-2661 Luxembourg, Grand Duchy of Luxembourg.

 

In Switzerland: Issued by Threadneedle Portfolio Services AG, Registered address: Claridenstrasse 41, 8002 Zurich, Switzerland.

 

This document is distributed by Columbia Threadneedle Investments (ME) Limited, which is regulated by the Dubai Financial Services Authority (DFSA). For Distributors: This document is intended to provide distributors’ with information about Group products and services and is not for further distribution. For Institutional Clients: The information in this document is not intended as financial advice and is only intended for persons with appropriate investment knowledge and who meet the regulatory criteria to be classified as a Professional Client or Market Counterparties and no other Person should act upon it.  Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.

 

 

 

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