I am Article Layout
DigicomDataCrowd_heroes_201805.jpg

Innovative technology: the trend that may change your investments

June 2018

Pictet-Digital – the innovative technology fund

Since its launch in 2008 Pictet-Digital has taken advantage of the burgeoning technology sector.

Over the last 10 years Pictet-Digital has grown by almost 2 times in terms of cumulative return.

DigitalCumulativeReturn.png

Source: Pictet Asset Management and Bloomberg, data as of 30 April 2018. Calendar year return: 2018 YTD: 2.5%; 2017: 37.1%; 2016: 8.3%; 2015: 6.6%; 2014: 4.3%; 2013: 39.6%. NAV-to-NAV in USD, dividends re-invested. 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.
* From 1 July 2008 to 31 December 2008, part year.

Proven defensiveness

During market corrections in 2008 and 2011, the Fund recorded a smaller drop than the median for technology equity funds, demonstrating its resilience.

Return of pictet-digital in the last 10 calendar years
DigitalReturn10CalendarYears.png

Source: Pictet Asset Management and Bloomberg, data as of 30 April 2018. Calendar year return: 2018 YTD: 2.5%; 2017: 37.1%; 2016: 8.3%; 2015: 6.6%; 2014: 4.3%; 2013: 39.6%. NAV-to-NAV in USD, dividends re-invested. 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. Peer group refers to the HKSFC-authorised Morningstar Information Technology Equity Category with a total of 22 funds.
* From 1 July 2008 to 31 December 2008, part year.

Comprehensive strategy capturing opportunities from innovative technology  

Typical innovative technology funds concentrate on the IT sector but Pictet-Digital has diversified into sectors such as telecommunications services, offering defensive characteristics which helps to fully capture the relevant investment opportunities.

In terms of geographical breakdown, the Fund differs from its US-biased peers. Pictet-Digital allocates 22% of its invesments to Asia, such as China's NetEase, Japan's Nintendo and Korea's Naver (parent company of LINE).

Artificial Intelligence

Artificial Intelligence (AI) has become a strategic domain for technology leaders, impacting many aspects of our lives. The trend of AI adoption has shown little signs of slowing down. Pictet-Digital provides access to seven disruptive trends, including the emerging MedTech theme.

Access to seven disruptive trends
AI.jpg

*For reference only, 30 April 2018. Approximate exposure in the portfolio. Portfolio exposure could be above 100%, as some companies may operate in more than one segment.

Robust structural growth

Our daily lives continue to get digitalized by the day. For instance, e-commerce sales now account for around 12% of overall retail sales, and the time we spend on social media such as Facebook has increased hugely. These are only some of the many examples which illustrate that digital technology has become an integral part of our lives. Nonetheless, data reveal that penetration of digital technology remains relatively low in several sectors, which provides structural support to the theme.

Penetration of digitalization in conventional markets
DigitalPenetrationCenter.jpg

*Calculated in USD.
Source: IDC, August 2017; Lending Club 2016; Bloomberg, January 2018; eMarketer, June 2017; McKinsey, December 2016; The Nielson Report, 2016.

Is the technology sector overheating?

Technology stocks have been soaring through 2017, raising concerns of overheating. However, the current P/E ratio is less than half of that in 2000. Meanwhile, fundamentals of current technology leaders have improved significantly. The difference between 2000 and now is that sales volumes of these technology companies have grown by ten or even hundred times compared to a decade ago.

P/E ratios of technology stocks
PERatios.png

Source: Bloomberg, 3 May 2018. Technology stocks refer to MSCI World Information Technology Index.

Sales of technology leaders have doubled over the last decade
DigitalTable.jpg

Source: Bloomberg, 30 April 2018. Local currencies.

 
For further information, please click here.

Source: Pictet Asset Management. All data as of 30 April 2018 unless otherwise stated. 

This material is provided strictly for informational purposes only and is not to be used or considered as an offer, an invitation to offer or solicitation to buy, sell or subscribe for any investment products. It is not directed to, or intended for distribution to use by, any person or entity who is a citizen or resident of or located in any locality, state, country or jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. If in doubt, please seek independent advice. The commentaries should not be regarded by investors as a substitute for the exercise of their own judgment. Certain data in this material has been obtained from sources from third parties. Pictet Asset Management (Hong Kong) Limited does not guarantee the accuracy of such data.

Investment involves risk. Past performance is not indicative of future results. Before making any investment decision to invest in the Fund, investors should read the Hong Kong offering documents and especially the risk factors therein. 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.

The investment returns may be denominated in a foreign currency. Consequently, US dollar / HK dollar-based investors may be exposed to fluctuations in the exchange rate of the relevant foreign currency against US dollar / HK dollar. For hedged share classes, only the compartment's consolidation currency is hedged into the share class currency. Foreign exchange exposure, resulting from assets in the portfolio, which are not denominated in the consolidation currency, can remain.

NAVs relating to dates on which shares are not issued or redeemed (“non-trading NAVs”) may be published here. They can only be used for statistical performance measurements and calculations or commission calculations and cannot under any circumstances be used as a basis for subscription or redemption orders.

This material has not been reviewed by the Securities and Futures Commission. The issuer of this material is Pictet Asset Management (Hong Kong) Limited.