World Oceans Day 2020 marks 20th anniversary of Pictet-Water fund
8 June 2020
Pictet Asset Management believes the tide is finally turning, as interest in sustainable funds and ESG investing continues to grow, even during a time of market turmoil. World Oceans Day 2020 coincides with the 20th anniversary of the Pictet-Water fund. The fund helped pioneer thematic investment and has seen a strong performance delivering 298.1% since inception1, compared to the benchmark return of 104.0%2.
A recent report from Morningstar3 highlights sustainable funds showed resilience during the coronavirus pandemic market sell-off, recording USD45.6bn (GBP37bn) of inflows over the first quarter of 2020.
Launched in 2000 and initially managed by Hans Peter Portner, the Head of Thematic Equities at Pictet Asset Management, the Pictet Water fund (soft closed) has since become the blueprint for Pictet’s USD 40 billion thematic equity franchise comprising 14 cross-thematic and individual strategies.
“To be sustainable and avoid the temptation of short-term fads, thematic strategies must be underpinned by these long-term megatrends.”
“World Oceans Day reminds us that, even though 70 percent of the world is covered by water, less than 1 percent is available and accessible for human use. With the UN predicting that by 2050 the global population will grow by 2.5 billion, it is more important than ever to pay close attention to those companies who focus on making the most of this and other scarce resources”.
“Water is just one of a long line of environmentally focused strategies managed by Pictet, which also includes Clean Energy, Timber and Global Environmental Opportunities (GEO). Our latest environmental fund, GEO, was launched in 2014 and appeals to investors at a time when we are more conscious then ever of climate change and the need for environmental solutions. Beyond an attractive risk-return we aim to give our clients an estimate of the positive environmental impact that they achieve by investing in the strategy.“
Lessons from 20 years of environmental investing From water to biodiversity
The water strategy was Pictet Asset Management’s first environmental strategy. It was launched 20 years ago, long before climate change and water scarcity were considered global threats; we have been investing in solutions to the world’s environmental problems ever since.
Read more about the megatrends powering our thematic environmental investment strategies
Resilience of strategies is key to thematic investing
A report published by Morningstar4 earlier in the year emphasized the rapid growth in thematic equity funds and cautioned investors to be selective as a mere 45 per cent of funds make it beyond their 10th anniversary.
Hans Peter Portner comments: “With many firms jumping on the sustainability and thematic bandwagon, investors must be discerning in their choices”.
For over a decade, Pictet Asset Management has been working with the Copenhagen Institute for Futures Studies (CIFS), a global think tank and consultancy, to establish a deeper understanding of megatrends – the powerful secular forces that are changing the environment, society, politics, technology and the economy.
Furthermore, to ensure the resilience of each strategy, Pictet Asset Management has appointed advisory boards to its range of thematic stretegies which are comprised of academics, scientists and industry leaders.
Hans Peter explains: “To be sustainable and avoid the temptation of short-term fads, thematic strategies must be underpinned by these long-term megatrends. Investors should look to allocate to them over 5-10 years rather than see them as a tactical solution -- it’s a buy and hold approach.”
“Furthermore, ESG considerations have always been part of our active thematic equity process, from the identification of the theme right through to individual stock selection “.
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1 The reference index for performance comparison only
2 The reference index, which has no environmental objectives, is the MSCI AC World (EUR). Data as at 29th May 2020. Performance is for the I EUR share class, net of fees. Past performance is not a guide to future performance.
3 Global Sustainable Fund Flows, Morningstar, May 2020
4 Global Thematic Funds Landscape, Morningstar February 2020