December 2, 2024

Asset Control and Quality

Investment for the Future

The Active Element of a Global Portfolio

The Active Element of a Global Portfolio

Reasons why institutional investors should invest in active thematic equities.

Readers of the financial press could be forgiven for thinking that active investing isn’t worth the time and effort. We are told that, as stock prices now accurately capture all available information, investors should abandon their pursuit of alpha altogether.

It’s a persuasive argument, but it would be wrong to claim that long-only active equity investment has outlived its usefulness.

In fact, research shows that a fair proportion of active equity strategies do distinguish themselves over time [1]. When investment managers stay true to their very strongest convictions and avoid holding stocks simply to alter a portfolio’s tracking error, such strategies can deliver.

All of which helps explain why a growing number of institutional investors are considering allocating more of their capital to active thematic equity, an approach that is both research intensive and index-agnostic [2].


“Since the 1990s, we have been building active thematic equity strategies aiming to identify the winning companies of tomorrow in some of the world’s most dynamic industries. An approach that has struck a chord with a growing circle of investors.”

Steve Freedman, Sustainability and Research Manager, Thematic Equities at Pictet Asset Management

The importance of megatrends

The main goal of Pictet Asset Management’s thematic equity strategies to invest in companies that profit from structural forces of change the evolve independently of the economic cycle.

In other words, our thematic portfolios aim to transform long-term megatrends – such as urbanisation, globalisation or the green transition – into long term investment opportunities.

To discover more, download our report Thematic equity: the active element of a global stock portfolio.

Source notes

[1] https://www.aqr.com/Insights/Research/Alternative-Thinking/Active-and-Passive-Investing-The-Long-Run-Evidence

[2] https://docfinder.bnpparibas-am.com/api/files/de3e08aa-b212-42f8-99c3-3134ceaf6aaf

Steve Freedman, Sustainability and Research Manager, Thematic Equities at Pictet Asset Management

Disclaimer

This marketing material has been issued by Pictet Asset Management (Europe) SA. 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 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 used in the preparation of this document is based upon sources believed to be reliable, but no representation or warranty is given as to the accuracy or completeness of those sources. Any opinion, estimate or forecast may be changed at any time without prior warning.  Investors should read the prospectus or offering memorandum before investing in any Pictet managed funds. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future.  Past performance is not a guide to future performance.  The value of investments and the income from them can fall as well as rise and is not guaranteed.  You may not get back the amount originally invested.  This document has been issued in Switzerland by Pictet Asset Management SA and in the rest of the world by Pictet Asset Management (Europe) SA, and may not be reproduced or distributed, either in part or in full, without their prior authorisation. Pictet Asset Management (USA) Corp (“Pictet AM USA Corp”) is responsible for effecting solicitation in the United States to promote the portfolio management services of Pictet Asset Management Limited (“Pictet AM Ltd”), Pictet Asset Management (Singapore) Pte Ltd (“PAM S”) and Pictet Asset Management SA (“Pictet AM SA”). Pictet AM (USA) Corp is registered as an SEC Investment Adviser and its activities are conducted in full compliance with SEC rules applicable to the marketing of affiliate entities as prescribed in the Adviser Act of 1940 ref.17CFR275.206(4)-3.

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