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Thematic investing

Pictet-Biotech, reasons to invest

Pictet-Biotech, reasons to invest

January 2018

Investing in companies at the forefront of medical innovation

The biotech investment opportunity

Biotechnology companies will play a vital role in the future development of medicines that could help patients survive what are currently fatal diseases, and improve the quality of life of people suffering from debilitating conditions. Ongoing scientific innovation, coupled with a fertile corporate environment, means the biotechnology industry is home to a large number of compelling opportunities for long-term investors.
There are 7,000 rare diseases, of which fewer than 5% can be treated. – Reference: Pharmaceutical Research and Manufacturers of America, Rare diseases report, 2013
Our equity strategy aims to find the most innovative companies developing drugs that can help combat lifestyle diseases and fatal illnesses, thereby helping ease the pressures on healthcare systems. The Pictet-Biotech fund targets capital growth by investing in medical biotechnology companies without geographic restrictions. However, the vast majority of investments are made in North America and Europe, as most of the innovation takes place in these regions.

Reasons to invest in Pictet-Biotech

  • Long-term growth prospects
    We analyse both smaller biotechnology companies and larger, global biotechnology firms, aiming to capture the best opportunities in an industry with a predicted growth rate of 15-20 per cent per year1.
  • The future of medicine
    Invest in biotechnology companies contributing to medical breakthroughs and play a pivotal role in making new discoveries that can help solve health issues.
  • Expert managers
    Benefit from an experienced investment team with scientific backgrounds, from a company that is a pioneer and proven specialist in thematic investing.

Why now?

There are currently excellent investment opportunities in the global biotech sector, with stocks trading at compelling valuations. Several potential ‘breakthrough’ drugs have recently been given regulatory approval, and results from clinical trials suggest other potential blockbusters are in the pipeline. These breakthroughs have the potential to transform the prospects of individual companies while also boosting sentiment towards the entire industry.
biotech_drug-to-market
Reference: Biotechnology Innovation Organization

Who is it for?

The fund could be suitable for investors who are prepared to invest for the long term and are willing to take a high risk with their investment. As a specialist fund within a broader portfolio, it could add valuable diversification and the potential for high returns.

What are the risks?

  • Past performance is not a guide to future performance. The value and income of an investment can fall as well as rise and you may not get back the amount originally invested.
  • Investing in biotech companies involves a high degree of risk and prices of these companies' stocks may be very volatile.
  • The fund may be invested in emerging markets. Investments in emerging markets can potentially be of higher risk and volatility than those in developed markets.
  • Investments are made in assets that are denominated in foreign currency and are not hedged back to the base currency of the fund. Changes in exchange rates may therefore affect the value of the investments.