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Thematic investing

Pictet-Water, reasons to invest

June 2017

Companies seeking solutions to the global water challenge are likely to represent attractive investment opportunities

The water investment opportunity

Governments are increasingly looking to private companies to help solve the global water challenge, as public spending comes under pressure.
Only 0.25% of the planet's water is usable. The rest is salt water, polluted or locked up in polar ice caps, glaciers and permafrost. – Source: United Nations Educational, Scientific & Cultural Organization
The Pictet-Water fund aims to capture investment opportunities across all areas of the global water industry, with a particular focus on water supply, water technology and environmental services. We build a global equity portfolio of ~50 to 80 stocks. We combine defensive stocks with more adventurous growth stocks, aiming for an attractive risk/return profile.

Reasons to invest in Pictet-Water

  • A wealth of investment opportunities 
    The water services industry is expected to grow globally at around 4-6% a year1, offering exciting opportunities for investors.
  • A long-term opportunity
    Over $1 trillion needs to be spent each year between now and 20302 to provide effective water infrastructure globally.
  • From the pioneers in the sector
    The fund was the first investment strategy of its kind, having been launched in 2000. Two of the investment managers who originally launched the fund are still managing it today.

Why now?

The world’s population is expected to reach 9 billion by 20503 – urbanisation and rising standards of living mean greater usage per person. 
Expected percentage change in water resources 
From 1990 to 2050
water increasing scarcity
1961-1990 (average). Based on Intergovernmental Panel on Climate Change climate change scenario A1. Source: The Guardian, 2015
To balance water demand and water supply will be a difficult process. Outsourcing of the management and operations of water infrastructure can be a good way to ensure the world’s water resources are efficiently managed. This creates new and sustainable opportunities for companies providing solutions, from infrastructure and distribution, to waste water collection and treatment.

Who is it for?

This fund could be suitable for investors who are seeking growth over the long term, and who are willing to 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.