Yearly return, %, 1997-2017
Return, indexed, Sears vs US retail sector stocks
So, for investors that wish to allocate some or most of their capital to stocks, it’s important to ensure that this investment is put to the best possible use.
At Pictet Asset Management, we believe one way investors can make the most of their allocation to stocks is by investing in thematic equity funds.
Thematic investing is not new – we’ve been doing it for more than 20 years (Fig. 3). But it’s very different from what most investment firms do, and in several important ways.
Fertile ground for thematic investments
That’s where we believe the most attractive investment opportunities are. And unlike many other equity funds, our thematic stock portfolios invest mainly in smaller, specialised companies - firms with specific expertise and a clear competitive edge.
That’s a deliberate choice. History shows specialist firms tend to fare better over the long term than the large, diversified firms you’ll find in a mainstream stock index such as the S&P 500 or the FTSE 100, which are prone to a ‘conglomerate discount’ – a valuation penalty that’s applied to big, complicated businesses.
The differences don’t end there. What also sets our thematic equity funds apart is how they are run. Most equity portfolios available to investors are managed in one of two ways. Many are overseen by a generalist investment manager, a jack of all trades who picks stocks from a very long list of analyst recommendations.
Others follow strict rules-based models that leave little or no room for human judgement or skill. Passive, or exchange-traded funds, which invest in companies without due regard for their future profitability, governance standards or stock price, fall into this category.
Our thematic equity portfolio managers do things rather differently. They’re neither generalists nor rule-takers but seasoned specialists who’ve got to know their industries over many years and market cycles.
Experts in their chosen fields, our investment professionals don’t rely on analyst recommendations; they carry out their own detailed research – company by company – to find the most promising investment opportunities. They’re active managers in every sense.
And through our Advisory Boards, each portfolio manager has access to world-renowned industry practitioners and academics, experts with years of experience that can offer a fresh perspective on new investment opportunities (Fig. 7).
Source: Pictet Asset Management
Important legal information
This marketing material is issued by Pictet Asset Management (Europe) S.A.. It is neither directed to, nor intended for distribution or use by, any person or entity who is a citizen or resident of, or domiciled or located in, any locality, state, country or jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. The latest version of the fund‘s prospectus, Pre-Contractual Template (PCT) when applicable, Key Information Document (KID), annual and semi-annual reports must be read before investing. They are available free of charge in English on www.assetmanagement.pictet or in paper copy at Pictet Asset Management (Europe) S.A., 6B, rue du Fort Niedergruenewald, L-2226 Luxembourg, or at the office of the fund local agent, distributor or centralizing agent if any.
The KID is also available in the local language of each country where the compartment is registered. The prospectus, the PCT when applicable, and the annual and semi-annual reports may also be available in other languages, please refer to the website for other available languages. Only the latest version of these documents may be relied upon as the basis for investment decisions.
The summary of investor rights (in English and in the different languages of our website) is available here and at www.assetmanagement.pictet under the heading "Resources", at the bottom of the page.
The list of countries where the fund is registered can be obtained at all times from Pictet Asset Management (Europe) S.A., which may decide to terminate the arrangements made for the marketing of the fund or compartments of the fund in any given country.
The information and data presented in this document are not to be considered as an offer or solicitation to buy, sell or subscribe to any securities or financial instruments or services.
Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to change without notice. The management company has not taken any steps to ensure that the securities referred to in this document are suitable for any particular investor and this document is not to be relied upon in substitution for the exercise of independent judgment. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. Before making any investment decision, investors are recommended to ascertain if this investment is suitable for them in light of their financial knowledge and experience, investment goals and financial situation, or to obtain specific advice from an industry professional.
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 guidelines are internal guidelines which are subject to change at any time and without any notice within the limits of the fund's prospectus. The mentioned financial instruments are provided for illustrative purposes only and shall not be considered as a direct offering, investment recommendation or investment advice. Reference to a specific security is not a recommendation to buy or sell that security. Effective allocations are subject to change and may have changed since the date of the marketing material.
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.
Any index data referenced herein remains the property of the Data Vendor. Data Vendor Disclaimers are available on assetmanagement.pictet in the “Resources” section of the footer. This document is a marketing communication issued by Pictet Asset Management and is not in scope for any MiFID II/MiFIR requirements specifically related to investment research. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any products or services offered or distributed by Pictet Asset Management.
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