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Thematic investing

Pictet-Security, reasons to invest

December 2017

Your clients can share in the growth potential of companies that offer innovative security solutions

The Security investment opportunity

Innovation, regulation and urbanisation are all underpinning long-term growth in the security sector. With so many innovative companies still at an early stage of development, we believe the long term case for investing in Pictet-Security is highly compelling. 
The global security market is predicted to be worth around USD280bn by 2021. – Source: G4S, Freedonia, 2013
The fund aims to capture these investment opportunities in this fast-moving sector wherever they are in the world, across all areas of the security industry, with a particular focus on physical security, security services and IT security.

Reasons to invest in Security

  1. Invest in broad range of companies
    An array of services is necessary to maintain our safety throughout the day. From testing for chemicals in our food to securing our e-payments online, the number of companies needed to answer these challenges offers a broad diversification.
  2. A long-term investment opportunity 
    We believe investments in the security sector offer the potential for growth at an attractive price. Many companies in this area enjoy high revenue growth, premium pricing, superior profit margins and strong cash flows. Investments in the security sector have generally proved resilient in recent years and we believe the Pictet-Security fund offers investors an attractive risk-return profile.
  3. A socially responsible fund
    The fund excludes companies involved in weapons, military contracting and nuclear power.

Why now?

Innovation, regulation and urbanisation are all underpinning long-term growth in the security sector.
The frequency and size of cyber-attacks are on the increase across sectors
cyberattacks
Source: Bloomberg, Data Breaches, 2014
 The global direct cost of cybercrime to the economy is now estimated at more than USD400 billion a year, which shows the size of the threat and has resulted in much-higher security spending.1

At the same time, health and safety legislation is becoming more complex and widespread, covering everything from food and cars to safety in the workplace.

We also expect to see increased demand for products and services that protect vital infrastructure in cities, with the world’s urban population in less developed countries set to double by 2050.2

Who is it for?

The fund could be suitable for investors who are prepared to invest for the long term and take a potentially higher risk with their investment.

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.
  • 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.