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Alternative Investments

Finding the best long and short opportunities across the European stock market

Reasons to invest in long-short European equity

May 2018

How understanding catalysts for change can help identify the potential winners and losers among European companies.

A constantly changing European corporate landscape

Europe is home to a diverse set of companies that are being impacted by long-term social, technological and economic changes. Some are set to adjust to these changes, while others will fall behind. In this environment, we believe that a flexible long-short approach, which can benefit from stock selection in up and down markets, can potentially earn greater returns.

The Pictet TR-Corto Europe fund aims to achieve long-term capital growth in absolute terms with a strong focus on capital preservation. The fund will take exposure principally to companies that are domiciled, headquartered or exercise the predominant part of their economic activity in Europe.

Reasons to invest in Pictet TR-Corto Europe

  • Bottom-up fundamental process 
    The team has developed a rigorous proprietary research framework to identify companies likely to create or destroy value.
  • A degree of downside protection
    We aim to capture Europe’s corporate transformation while mitigating downside risk by putting risk management as a central element of the investment process.
  • Expert managers
    Our experienced team includes a portfolio manager and two dedicated analysts with extensive experience covering European companies.
Did you know? Our strategy's name is inspired by the comic book character Corto Maltese created by Hugo Pratt in 1967. This sea captain from the early 20th century manages to successfully navigate through his many adventures.

Why now?

Europe's robust economic recovery, improving corporate prospects and broad universe of companies make it one of the most attractive regions for equity investing. In addition, a normalisation of interest rates and potentially higher volatility should create a very conducive environment for stock picking.

Who is it for?

The fund could be suitable for investors looking to invest in European companies but are reluctant to experience the volatility a long only approach can deliver. It may also appeal to investors who are seeking to improve the risk / return profile of their existing equity allocation to the region.

What are the risks?

  • Past performance is not a guide to future performance. The value and income of an investment can fall as well as rise and you may not get back the amount originally invested.
  • The fund may be invested in emerging markets. Investments in emerging markets can potentially be of higher risk and volatility than those in developed markets. Investments are made in assets that are denominated in foreign currency and are not hedged back to the base currency of the fund. Changes in exchange rates may therefore affect the value of the investments.
  • The use of leverage may amplify losses and gains, and/or may not result in the intended exposure. The use of derivatives in the form of contracts with counterparties may imply significant losses if a counterparty defaults and cannot honour its liabilities.
  • When market conditions are unusual or a market is characterised by particularity low volumes, the Fund may encounter difficulties in valuing and/or trading some of its assets, particularly to satisfy large redemption requests.