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Thematic investing

Smartcity: investing in the future

Invest in tomorrow's cities

September 2018

Our latest thematic fund aims to capture the strong growth potential of companies finding smarter solutions to the urbanisation challenge.

What is Pictet-SmartCity?

Pictet-SmartCity is a new global thematic equity fund that aims to harness the investment potential of urbanisation, which is gathering pace worldwide. It aims to deliver long-term capital growth by investing in companies around that are helping develop the sustainable, better-connected cities of tomorrow.

These firms will be active mainly, but not exclusively, in the following areas: mobility and transportation, infrastructure, real estate, sustainable resources management, as well as enabling technologies and services supporting the development of smart and sustainable cities.

Cities are making huge changes to deal with growing populations and reduce environmental impact. We believe this is creating great opportunities for investors. – Ivo Weinöhrl, Senior Investment Manager
 

Why invest in the cities of the future?

The world is moving to cities. Today, 55 per cent of the world’s population lives in urban areas and this is expected to reach 70 per cent by 2050.1 Cities are engines of growth, accounting for nearly 80 per cent of global GDP, but are also responsible for 70 per cent of global greenhouse gases and often have poor air quality.2

As their populations swell, cities will have to find smarter solutions to meet the needs of their residents and improve their quality of life. 

SmartCity - from the pioneer in thematic investing


What are the solutions to the urbanisation challenge?

Innovative companies are devising new ideas and technologies to change the way cities are managed, reduce pollution, use resources more efficiently or improve healthcare and social structures. We believe this represents a huge growth opportunity for the companies helping to build, run and manage cities in a better and more sustainable way.

 

Building the city: companies that are involved in the design, planning, construction and financing of tomorrow's cities, with a focus on efficiency, safety and sustainability.Living in the city: companies that offer solutions for 21st century urban living, including collaborative working environments, housing, and recreational activities.Running the city: companies that provide the physical backbone and the services that are necessary for the day-to-day functioning of modern, sustainable cities.

 

Why invest in Pictet-SmartCity?

1. Long-term growth potential

We believe the SmartCity theme represents a large investment opportunity, with an investment universe currently worth nearly US$4 trillion,3 and will likely continue to grow. 

2. Sustainable cities

Cities are a large source of pollution, so their scale and density require them to manage their resources more efficiently. Providing sustainable solutions and services to support long-term urban development planning is becoming a key priority for policymakers in both the developed and developing world.

3. Highly active approach with a smart purity filter

Our pioneering investment approach has been key to our success in thematic equity funds. When building the portfolio, the investment managers use an active investment approach designed specifically for thematic equities. Experts in their chosen fields, our investment professionals carry out their own detailed research – company by company – to find the most promising investment opportunities. In addition, the managers apply a strict purity filter to calculate the percentage of revenues that are generated in urban areas. This helps them select the companies most likely to benefit from this powerful trend.

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Why Pictet Asset Management for thematic investing?

SmartCity is the latest theme launched by Pictet Asset Management, a pioneer and leader in thematic strategies. With over 20 years’ experience in thematic investing, we believe that the thematic approach is a strategy for the future.

We first identified its potential during the 1990s, when we were one of the first asset managers to launch a biotechnology product.

This was soon followed by our water strategy, which remains one of the very few dedicated to this unique resource. Over the following years we have built up an extensive thematic range of 14 products which covers such diverse industries as Timber, Robotics and Health, allowing our investors to access any number of enduring investment opportunities presented by megatrends.

 


A recording of our SmartCity webcast is available here.

webinar