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October 2019

SmartCity: building our urban future

Around the world cities are adapting to the demands of a swelling population by embracing sustainability and investing in new technologies. That's good news for the planet the economy and investors.

The world is moving to cities

Today, more than half of the world’s population lives in cities. That proportion is sure to increase significantly over the coming years. According to the United Nations, nearly three-quarters of the globe's inhabitants will be working, living and commuting in and around urban centres by 2050.1
Urban population in millions per country

Source: World Bank, 2016

The urbanisation challenge

As their populations swell, cities will have to find ways to reduce their environmental footprint and improve their residents’ quality of life. Among other things, they’ll need to cut the amounts of pollution and waste they generate and build healthcare and social facilities fit for the 21st century.


To their credit, policymakers worldwide are alert to these challenges – and a growing number are investing heavily in new technologies in areas such as energy efficiency, water recycling, health, crime reduction, transport and innovative residential and commercial real estate to build the smart cities of the future. 

Giving such efforts added impetus is the UN’s 2030 Agenda, a development programme endorsed by 193 countries. Among its 17 Sustainable Development Goals is a pledge to build "Sustainable Cities and Communities” – urban centres that are more inclusive, safe, resilient and environmentally-friendly.

A wealth of opportunities

As smart cities expand worldwide, investment opportunities are bound to emerge, particularly among the companies involved in the buildout. In fact, the rise of smart cities promises to create significant, long-term business opportunities for firms that specialise in various aspects of urban development. 

Research shows that, while the world economy is expanding by just 3 per cent a year, there is the potential for urbanisation-related firms to increase their revenues by more than 15 per cent per year.2

SmartCity - from the pioneer in thematic investing

To capture the investment opportunities arising from this urban revolution, Pictet Asset Management has developed SmartCity, a new addition to our family of thematic equity strategies.  In common with our entire thematic range, SmartCity will draw on our portfolio managers' specialist expertise and deep understanding of the structural forces transforming the globe. 

The world is changing, shouldn’t your investment change too?