ChatGPT, the Magnificent Seven, Ozempic, and Higher-for-longer

By Kirsten Boldarin

OpenAI released ChatGPT in November last year and ignited the imagination of investors of the future applications of Artificial Intelligence and drove enthusiasm for the ‘Magnificent Seven¹’. Rallying 99%² year-to-date, this group of technology stocks have generated a large proportion of the US (and consequently global) equity market gains for the year. When technology is stripped out of the S&P 500 index, the return drops from a heady +21% to only 3%³ – a demonstration of how much heavy lifting just one sector has done.

The Mint Diversified Growth Fund holds a significant allocation to international stocks, and we have benefitted from the rally in a number of these technology-oriented names. Within our portfolio, we own Microsoft, Apple and Amazon and have seen strong gains from these holdings. Our quantitative screening process coupled with our more qualitative evaluation leads us to names with consistent earnings growth and these technology names fit that definition well.
While not a large cap technology name, we have also held a position in another market favourite. Novo Nordisk has rallied this year on the back of its main product Semaglutide, which is used to treat diabetes under the brand name Ozempic – another major buzz word for 2023, particularly within celebrity Instagram posts! 

GLP1’s⁴ like Ozempic, have been shown to assist in weight-loss and have exploded as the new obesity tackling wonder-drugs following a number of successful trials. While we have benefitted in our Growth Fund from the position in Novo Nordisk, the extrapolation of the benefits of these drugs has caused a significant sell-off in other healthcare companies. CSL, a core holding in our Australasian Equity Fund has been on the receiving end of this.