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November 2018

Thematic strategies for institutions

Two differentiated thematic global equity strategies.

Key portfolios for institutional investors

We offer two clearly differentiated global equity strategies that take a thematic approach: Global Thematic Opportunities (GTO) and Global Environmental Opportunities (GEO).

Two differentiated Global Equity thematic Strategies
table showing key facts about our global thematic and global environmental strategies

Source: Pictet Asset Management

Global Thematic Opportunities (GTO)

The distillation of our entire thematic expertise is embodied in our GTO strategy, which is a best ideas global equity strategy that leverages expertise from across our 11 different thematic teams.

It is relatively concentrated with around 50 stocks and is benchmark unconstrained, which gives it an active share in the high 90s. Crucially its portfolio is built bottom-up with no top-down allocation between the different single themes, although typically the portfolio is exposed to all of them.


Global Thematic Opportunities compared to MSCI World

Bar graph showing active share of our pictet global thematic opportunities strategy and its low overlap with MSCI World index, as well as its purity factor

Source: Pictet Asset Management, 31.05.2018

The investment managers are very structured about choosing the best stocks, with significant focus on ensuring the stocks selected from across the different single-theme teams are compared consistently. There is also a level of human judgement in the final stock selection process. Again, this is very deliberate and a response to conversations with institutional buyers who have asked us to put forward our very best convictions.

Source: Pictet Asset Management

Global Environmental Opportunities (GEO)

As its name implies, our GEO strategy is a global equity portfolio with a sustainable focus that focuses on companies that combine strong environmental credentials with innovative products and services designed to safeguard the world’s natural resources. The result is a portfolio that has delivered important returns for both our investors and the planet.

The investment managers of GEO follow a process that combines a scientific, rule-based framework and traditional company-by-company research. To define their initial investment opportunity-set they use two unique tools to pinpoint industries with the smallest environmental footprint: a Planetary Boundaries framework (PB) and a Life Cycle Assessment (LCA) of every economic activity in the global economy.

A more considerate global equity footprint

Global Environmental Opportunities strategy's impact measured using the Planetary Boundaries framework

Series of bar graphs showing lower environmental impact of our Pictet Global Environmental Opportunities strategy relative to the MSCI World Index

Source: Pictet Asset Management, 31.05.2018

Once the LCA-PB audit is complete, the investment managers look at the firms developing products and services that make a real difference in reversing environmental degradation or improving resource efficiency.

They conduct detailed bottom-up analysis to ensure stocks selected offer the most attractive risk-return characteristics for an efficient portfolio using a proprietary scoring system. ESG analysis is systematically integrated in this stage as well.

The result is a concentrated portfolio of around 50 stocks, which offer an attractive risk-return profile and, at the same time, have a low ecological footprint, across a diversified list of industries.

Source: Pictet Asset Management


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