Thematic equity strategies invest in companies whose prospects are underpinned by powerful forces of change we know as megatrends.
To be a successful equity investor, it’s important to understand how the ups and downs of the economy can affect a company’s profitability. But this knowledge alone won’t ensure investment success. There are other, non-economic, factors that can have just as strong a bearing on the prospects of businesses or industries. These ‘megatrends’ include changes in the environment, technological development and societal beliefs and behaviour.
Fig. 1 the megatrends transforming the world
Source: Pictet Asset Management, Copenhagen Institute for Futures Studies
Over the past 20 years, and in collaboration with experts such as the Copenhagen Institute for Futures Studies, Pictet Asset Management has dedicated significant resources to the analysis of megatrends and how investors might profit from these powerful forces.
Our research has uncovered 14 distinct structural forces of change (Fig. 1) that, in turn, have provided the foundations for our distinctive family of megatrend-focused thematic equity strategies.
Megatrends in the water industry
The development of our Water strategy shows how megatrends can give rise to investment opportunities.
In the late 1990s, we discovered that the water industry was about to be transformed by a number of environmental and societal trends.
Climate change and urbanisation – the seemingly unstoppable migration of the world’s population from the country to the city – threatened to speed up the depletion of the planet’s water resources. At the same time, cities worldwide were increasingly turning to private firms to manage their water resources.
As a result, many companies in the water industry were becoming more investible than they had been for years, prompting us to launch Water fund, the first of its kind and one that would concentrate investments in specialist providers of water preservation and recycling technologies.
fig. 2 megatrends at play in the water industry
Source: Pictet Asset Management
Megatrends: the forces powering thematic equities
All of the thematic equity portfolios we have launched since pursue the same approach as our pioneering water strategy. Each has been specifically built to capitalise on structural forces of change that evolve independently of the economic cycle. Fig. 3 shows the megatrends underpinning the prospects of companies in our Clean Energy strategy - among which are sustainability - or society's heightened concern for the environment - and technological development, which has resulted in a sharp drop in the production costs of renewable power such as wind and solar.
fig. 3 The megatrends shaping the clean energy industry
This marketing document is issued by Pictet Asset Management. It is neither directed to, nor intended for distribution or use by any person or entity who is a citizen or resident of, or domiciled or located in, any locality, state, country or jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. Only the latest version of the fund’s prospectus, the KIID (Key Investor Information Document), regulations, annual and semi-annual reports may be relied upon as the basis for investment decisions. These documents are available on assetmanagement.pictet.
This document is used for informational purposes only and does not constitute, on Pictet Asset Management part, an offer to buy or sell solicitation or investment advice. It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date. The effective evolution of the economic variables and values of the financial markets could be significantly different from the indications communicated in this document.
Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to change without notice. Pictet Asset Management has not taken any steps to ensure that the securities referred to in this document are suitable for any particular investor and this document is not to be relied upon in substitution for the exercise of independent judgment. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. Before making any investment decision, investors are recommended to ascertain if this investment is suitable for them in light of their financial knowledge and experience, investment goals and financial situation, or to obtain specific advice from an industry professional.
The value and income of any of the securities or financial instruments mentioned in this document may fall as well as rise and, as a consequence, investors may receive back less than originally invested. Risk factors are listed in the fund’s prospectus and are not intended to be reproduced in full in this document.
Past performance is not a guarantee or a reliable indicator of future performance. Performance data does not include the commissions and fees charged at the time of subscribing for or redeeming shares. This marketing material is not intended to be a substitute for the fund’s full documentation or for any information which investors should obtain from their financial intermediaries acting in relation to their investment in the fund or funds mentioned in this document.
EU countries: the relevant entity is Pictet Asset Management (Europe) S.A., 15, avenue J. F. Kennedy, L-1855 Luxembourg
Switzerland: the relevant entity is Pictet Asset Management SA , 60 Route des Acacias – 1211 Geneva 73
Hong Kong: this material has not been reviewed by the Securities and Futures Commission or any other regulatory authority. The issuer of this material is Pictet Asset Management (Hong Kong) Limited.
Singapore: this material is issued by Pictet Asset Management (Singapore) Pte Ltd. This material is intended only for institutional and accredited investors and it has not been reviewed by the Monetary Authority of Singapore.
For Australian investors, Pictet Asset Management Limited (ARBN 121 228 957) is exempt from the requirement to hold an Australian financial services license, under the Corporations Act 2001.
For US investors, Shares sold in the United States or to US Persons will only be sold in private placements to accredited investors pursuant to exemptions from SEC registration under the Section 4(2) and Regulation D private placement exemptions under the 1933 Act and qualified clients as defined under the 1940 Act. The Shares of the Pictet funds have not been registered under the 1933 Act and may not, except in transactions which do not violate United States securities laws, be directly or indirectly offered or sold in the United States or to any US Person. The Management Fund Companies of the Pictet Group will not be registered under the 1940 Act.
Pictet Asset Management Inc. (Pictet AM Inc) is responsible for effecting solicitation in North America to promote the portfolio management services of Pictet Asset Management Limited (Pictet AM Ltd) and Pictet Asset Management SA (Pictet AM SA).
In Canada Pictet AM Inc. is registered as Portfolio Manager authorised to conduct marketing activities on behalf of Pictet AM Ltd and Pictet AM SA. In the USA, Pictet AM Inc. is registered as an SEC Investment Adviser and its activities are conducted in full compliance with the SEC rules applicable to the marketing of affiliate entities as prescribed in the Adviser Act of 1940 ref. 17CFR275.206(4)-3.
This website uses cookies to enhance user experience and to collect statistical data. You may refuse to accept cookies or change your settings by clicking the following link: Cookies policy. By continuing to browse this website, you accept the use of cookies for the above purposes.
