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Perspectives Pictet

Perspectives Pictet

“Since 1805 Pictet has remained single-minded in its mission to advise private clients, families and institutions in the art of managing their wealth.” More than 200 years after it was founded, Pictet ranks as one of Switzerland’s leading private banks and is among the most respected asset management specialists in Continental Europe. Even though we now have a worldwide presence and a global perspective, we retain the characteristics that have helped our clients to prosper over two centuries.

Articles by Perspectives Pictet

Deceptive calm

5 days ago

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Published: Tuesday September 19 2017With the return of solid growth, Cesar Perez Ruiz, Chief Investment Officer at Pictet Wealth Management, discusses how anxiousness about turns in the monetary policy cycle is being expressed in forex rather than equity markets, where volatility remains low.

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House View, September 2017

12 days ago

Pictet Wealth Management’s latest positioning in fast-evolving markets.Asset allocationThere are two ways to hedge geopolitical risk: buying gold or buying protection for portfolios. We prefer the latter, to take advantage of current low volatility and because gold’s gains so far this year reflect the depreciation of the dollar.We remain constructive on DM equities, particularly the euro area and Japan. We are neutral on the US, underweight UK and selective in Swiss equities.Low correlations and a pick-up in disruptive M&A mean a good environment for active management.EM local-currency bonds continue to look tempting. Any short-term pullback could be a chance to buy this asset class.CommoditiesWe see the current equilibrium oil price at USD55/b, and our scenario is for it to remain around

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Responsible Investing

26 days ago

Published: 29th August 2017Download issue:EnglishAt Pictet, Sustainability and Responsibility have always been integral to the philosophy that is engrained across all our activities, helping us to confront the challenges posed by powerful disruptive forces currently reshaping the global economy, which investors cannot afford to ignore. Many companies describe themselves as responsible corporate citizens. No doubt many are. But at Pictet, we believe that a sense of responsibility – towards our clients, our employees and the wider community – lies at the heart of Pictet’s values.Pictet has remained a private partnership ever since its foundation in 1805. In the succeeding 212 years, there have only been 41 partners, and with few exceptions always with overlapping terms. Such longevity and

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Hacking into the brain to change human behaviour

August 21, 2017

Published: Monday August 21 2017A former hacker has become a neuroscientist whose research into the human brain is revealing how memory works, the meaning of dreams and the role of the subconscious in making decisions and shaping human behaviour.Professor Moran Cerf began his career in the Israeli military intelligence as a professional hacker. After four years in the army, he set up a company to use his skills commercially, working for companies and government organisations to help find vulnerabilities in their computer systems. As is common in Israel, he continued his studies while working, graduating in physics and taking a masters in the philosophy of science.When his business was acquired by a larger company, he decided to continue with his studies and consulted one of his scientific

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Bounties for bug-hunters make the internet safer

August 16, 2017

Published: Wednesday August 16 2017HackerOne’s network of more than 100,000 ethical hackers can help online organisations eradicate vulnerabilities in their internet systems that could be exploited by criminals, says Mårten Mickos, its Chief Executive OfficerBarely a month goes by without reports of large companies and government bodies suffering cyber-attacks by criminal hackers and other hostile organisations. A USD92 billion cyber-security industry has grown up which tries to fend off such attacks by building walls and gates. But such strategies are easily outpaced by hackers – frequently proving inadequate and undermining the confidence of online users.However, a California-based company has developed a revolutionary new approach that invites ethical hackers to detect vulnerabilities

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The importance of independent validation

August 14, 2017

Published: Monday August 14 2017Geneva-based SGS provides teams of experts to help businesses become faster, simpler and more efficient,  ensuring compliance with fast-evolving global standards and local regulations that protect customers and consumers.In the early days of SGS, the company specialised in inspecting shipments of grain arriving in large French ports from elsewhere in Europe, North America and further afield. Its network of inspectors would verify the quantity and quality of the grain which tended to shrink in volume during transit, especially on loading and unloading.From its launch in 1878, the company grew fast: by 1913, it was inspecting 21 million tonnes of grain a year from a network of 45 offices throughout Europe and had become the leader in the grain inspection

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Monthly Investment Strategy Highlights, August 2017

August 8, 2017

Pictet Wealth Management’s latest positioning in fast-evolving markets.Asset allocationWe retain a slight overweight in DM equities owing to good fundamentals, but it is especially important at present to be well protected against downside risk.Markets appear unduly complacent, and volatility could rise in the coming months. This will create opportunities for tactical trading and especially hedge funds.Low correlations and a pick-up in disruptive M&A are already creating an improved environment for active management.EM assets have rebounded but a recovery in the USD could check EM assets’ performance. It may still make more sense for the moment for risk-averse investors to play EM through DM – investing in DM multinationals with a large EM footprint.CommoditiesBarring a geopolitical

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Ensuring the protection of confidential data until the end

August 7, 2017

Published: Monday August 07 2017Two entrepreneurs who created a service which shreds paper documents on-site for clients have developed techniques for destroying redundant hard drives, putting the information they hold beyond the reach of competitors and criminals.There is much talk in business of “the paperless office”, but as technology advances, more and more paper is used in the workplace – increasing the amount that needs to be destroyed to preserve confidentiality. That insight was what prompted Yarom Ophir and Siddik Apaydin to found Katana, a Swiss paper-shredding company that provides its services from trucks which do the job at clients’ businesses where they can monitor its destruction.“While working for a client in a previous business, we ended up using its office shredders all

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How world war two code-breaking laid the foundations for today’s cyber warfare

July 31, 2017

Published: Monday July 31 2017British code-breakers gave the UK and US a vital advantage in the second world war by deciphering the  enemy’s secret communications with techniques that were the precursors of modern computer technologies.Bletchley, an unremarkable town north of London, was known until the 1970s mainly as a railway junction. But a book published in 1974 revealed that it had played an essential role in the second world war by intercepting and decoding secret communications between Berlin and the commanders of Germany’s armed forces.Slowly the full story began to emerge. At the start of the war, the British Government’s Code and Cipher School had relocated from London to Bletchley Park, a mansion on a 21-hectare estate beside the town’s railway station. There it devised

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Why people divulge confidential information

July 24, 2017

Published: Monday July 24 2017Most people say they want to keep their personal information private, according to Professor Leslie John of Harvard Business School, but in practice they will reveal it for often trivial reasons or to win the approval of others.Privacy is an issue of great sensitivity in a digital age. Many people go to considerable lengths to protect their personal information from online access by strangers, commercial enterprises and public bodies. And users of most social media have to sign up to complex agreements setting out their rights to privacy and how the companies can use their personal information.Yet very few people read the lengthy privacy statements before signing away rights to the highly confidential information they provide online. And in practice, it can

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A foolproof method of preserving data security

July 21, 2017

Published: Friday July 21 2017In the battle to protect the security of digital information, a Swiss company has used quantum mechanics to develop a new form of cryptography which makes decoding data impossible – even as computers become much faster.The increasing processing power of computers is making it easier for hackers to decipher encrypted information by finding the keys at the heart of traditional coding techniques. That task will become much easier when quantum computers arrive, hugely accelerating processing speeds and making it possible to break codes very quickly.However, the quantum mechanics science behind the new generation of super-fast computers has already generated a new form of cryptography which is impossible to decode – not least because any attempt to intercept

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The power of film to expose human rights abuses

July 17, 2017

Published: Monday July 17 2017Israeli entrepreneur Oren Yakobovich has created Videre est Credere, a human rights organisation which helps communities to film and document the violence and corruption they experience, and distributes the material to create change.From his childhood, Oren Yakobovich had always wanted to join the Israeli defence forces. His parents had immigrated to Israel in 1967, giving birth to him a few years later and bringing him up in a very patriotic house which believed that the country belonged to the Jewish people. At 18, he joined up, first as a pilot and then becoming an infantry officer serving mainly on the West Bank.But surprised at what he saw there, he began to understand the Palestinian cause for the first time and what Israel was doing to the Palestinian

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Up or down?, “Perspectives”, August-September 2017

July 12, 2017

Published: 12th July 2017Download issue:English /Français /Deutsch /Español /ItalianoRisk assets showed a considerable loss of momentum in the second quarter. Annualised rises of over 50% on the S&P500 for much of the first quarter declined to 5% in the second. The reason was the fading of any belief in the reflation trade that the election of Donald Trump was meant to foster via tax cuts and infrastructure spending. There has also been a palpable loss of momentum in European markets as the boost provided by receding populism has faded.According to Pictet Wealth Management s (PWM) chief strategist, Christophe Donay, writing in the August-September issue of Perspectives, with valuations already high, equities could remain on pause for a while yet in the absence of some sort of new

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Protection for critical infrastructure

July 10, 2017

Published: Monday July 10 2017Increasing concerns about potential cyber attacks on satellites, energy installations and defence systems call for more creative threat responses, according to an expert in international security at a leading UK think-tank.The enormous growth in the processing power of computers has put great connectivity in the hands of users, but it has also offered great opportunities for cyber criminals to exploit their vulnerabilities. This has raised concerns over the privacy of digital communications and the security of personal data held on computers.But a relatively new set of concerns is developing over the increasingly apparent links between cyber security and physical security in fields such as defence, the space industry and critical infrastructure. Dr Patricia

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Monthly Investment Strategy Highlights, July 2017

July 7, 2017

Pictet Wealth Management’s latest positioning in fast-evolving markets.Asset allocationAs central bank support starts to be withdrawn, volatility could well rise.We are still slightly long equities, since fundamentals are supportive, but have bought put options on the S&P 500 to guard against downside risks. A rise in volatility will create opportunities for tactical trading and especially hedge funds.CommoditiesOil prices fell again in June, but now appear close to what we assess as the current equilibrium price (around USD44 per barrel).EquitiesThe slowdown in market momentum has occurred later in Europe than in the US, but margin for further outperformance by Europe may be shrinking.Until markets start pricing in 2018 earnings later this year, there is a good chance that equities will

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Equity markets set for a pause

July 6, 2017

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Published: Thursday July 06 2017Economic cycles have resynchronised, but this looks to be only a temporary phenomenon. Christophe Donay, Head of Asset Allocation and Macro Research at Pictet Wealth Management, discusses the implications for equity markets.

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Strong earnings growth from an industry which is expanding fast

July 3, 2017

Published: Monday July 03 2017Stocks in businesses that provide security solutions in a wide variety of market sectors are proving to be an attractive investment theme with growth fuelled by innovation, urbanisation and regulation.When Pictet Asset Management launched the Security Fund ten years ago, the security market was not seen as a strong or growing one. But today the security industry is growing very fast, and expanding to cover many different market sectors.Security permeates our lives, from dawn to dusk. When we rise in the morning, we use electricity, gas and water to heat our homes, shower and make breakfast – relying on utilities whose operations are securely protected. We travel to work by car or public transport, using equipment secured for our safety and under the watchful

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The evolving threats from cyber terrorists

June 26, 2017

Published: Monday June 26 2017Terrorist organisations intent on destroying their enemies are using increasingly sophisticated cyber attacks to damage critical infrastructure and kill large numbers of people, according to a former Israeli security chief.Governments and large organisations trying to protect themselves from large-scale cyber attacks face two primary challenges in the modern era, according to Doron Bergerbest-Eilon, the former Head of the Protection and Security Division of the Israel Security Agency and Israel’s most senior ranking security official.The first is the constantly evolving nature of the terrorist threat. In the past, terrorists were primarily motivated politically, by the aim of ousting governments and installing new regimes. They were not looking to inflict

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Security in a digital world

June 21, 2017

Published: 21st June 2017Download issue:English /FrançaisWe live in a digital world where security threats are proliferating and becoming more sophisticated. The Summer 2017 issue of Pictet Report, examines the nature of these threats and various aspects of online security.On a personal level, people find hackers trying to access their personal information online for criminal purposes. Commercial organisations and public bodies face similar attacks, while terrorists and hostile governments use cyber attacks to further their political ambitions. In this issue of Pictet Report, two international security experts set out the fast-growing challenges posed by cyber attacks and call for more creative threat responses to avoid the destruction of critical infrastructure and the deaths of large

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Monthly Investment Strategy Highlights, June 2017

June 14, 2017

Pictet Wealth Management’s latest positioning in fast-evolving markets.Asset allocationMarkets have continued to rally on strong fundamentals. It has been important to stay invested, and we continue to favour DM equities. However, markets appear unduly complacent, and we have taken advantage of current low volatility to scale back our risk exposure.We reduced our equity overweight in June by selling part of our Global Defensives equities, and also cut most of our US high yield position. We invested the proceeds in either corporate/aggregate short-term bonds (1-3 years) or in USD cash.Emerging market assets continue to perform well, but the sharp sell-off prompted by the scandal around Temer in Brazil is a reminder of the risks. We still prefer to play EM through DM, but EM local currency

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Dealing with complacency

June 13, 2017

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Published: Tuesday June 13 2017Cesar Perez Ruiz, Chief Investment Officer at Pictet Wealth Management, discusses the synchronised global recovery, political and geopolitical risks, and the need to protect portfolios against market complacency.

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Multi-Generational Wealth

May 31, 2017

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Published: Wednesday May 31 2017The fourth edition of the Latam Family Office Master Class took place in Nassau from the 3rd to the 5th of April 2017, with more than 65 guests attending. This year the focus was around family governance, geopolitics, technology and alternative investments. Among the speakers, we had the pleasure of welcoming former Governor of Florida, Jeb Bush; Argentina’s one-time Minister of Economy, Alfonso Prat-Gay; Yuri Van Geest, Founder of Singularity University, Netherlands and Joseph J.Sitt, CEO of Thor Equities.

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Looking to the politicians, ‘Perspectives’, June-July 2017

May 24, 2017

Published: 24th May 2017Download issue:English /Français /Deutsch /Español /ItalianoWith the election of Emmanuel Macron as French president, the tide of populism may have been stemmed for the moment in western Europe. Has Europe’s political class found the formula for dealing with the phenomenon? “I wouldn’t bet my investment career on it,” answers Pictet Wealth Management’s (PWM) chief investment manager, Cesar Perez Ruiz, in the June-July issue of ‘Perspectives’. Signs of ‘peak populism’ should allow investors to focus on the improving growth environment—but none of the factors that gave rise to the populist explosion have gone away. “The next turn in the economic cycle could well tip the balance in a number of countries,” writes Perez Ruiz.The theme of the interaction between economics and politics is taken up PWM’s chief strategist, Christophe Donay. Having doused the flames of the financial crisis, central banks have begun to step away from expansionary monetary policies, which means, writes Donay, “there is now the tantalising possibility that economic policy will fill the void”. Donay argues that once the sugar rush provided by positive earnings surprises fades, “a further leg-up in risk assets may depend increasingly on fiscal and budgetary policy” and its success in putting the current cyclical recovery on a firmer footing.

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Monthly Investment Strategy Highlights, May 2017

May 9, 2017

Pictet Wealth Management’s latest positioning in fast-evolving markets. Asset AllocationMarkets are starting to revise their expectations for the Trump administration. We still see some prospect of a US fiscal stimulus, but it is likely to be later (not kicking in before 2018) and less ambitious than hoped.Improving economic performance and strong earnings growth support our positive stance on DM equities, despite high valuations. However, room for disappointment is limited.We expect core sovereign bond yields to rise as economic growth strengthens and inflation expectations pick up.Favourable economic fundamentals do not favour buying gold, but a call option on gold offers a way to hedge geopolitical risk.CurrenciesAlthough the US dollar’s up-cycle is mature, the greenback should remain strong in 2017.With hard Brexit still the most likely scenario and the UK economy starting to suffer, upside potential for sterling is likely limited.EquitiesEarnings growth has surprised positively and we see good momentum for 2018.Positive profit margin momentum in Europe supports our overweight in European equities.The strong performance of European equities also supports our view that it is better to play EM through DM.Fixed incomePeripheral euro area bond spreads could widen on anticipations of ECB tapering, as well as the approach of Italian elections in 2018.

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Where Do We Go From Here?

May 2, 2017

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Published: Tuesday May 02 2017Evidence that hard data is catching up on soft data continues to put wind in the sails of equity markets, which are also benefiting from strong earnings news. A revival of Trump’s tax plans could further help risk assets. But political and geopolitical risk has not entirely disappeared.  Cesar Perez Ruiz, Pictet Wealth Management’s Chief Investment Officer, discusses the road ahead.

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The Pictet Group Annual Review 31 December 2016

April 28, 2017

The Pictet Group is proud to present its Annual Review of activites for 2016, covering Pictet Wealth Management, Pictet Asset Management and Pictet Asset Services.We are pleased to introduce the Annual Review of the  Pictet Group for 2016 — my first as Senior Partner. After I assumed the role on 1 July  last year, I was asked if Pictet’s strategic direction would change. The Senior Partner is,  by tradition, chair and primus inter pares of  the board of partners, only assuming  the position after a decade or two as a partner.The thrust of our strategy is therefore  towards continuity, solidity and stability:  the conditions in which Pictet’s entrepreneurial spirit will thrive. These principles are  more vital than ever with so much corporate  activity in the asset and wealth man- agement sector.We are by no means immune  to the profound changes in the financial  industry, in society and in the wider world.  For example, automation and the digital revolution are changing how we commun- icate and work in ways that we could  hardly have imagined. But, underpinned by our long-held values, I have no doubt that we have the talent, resources and services to adapt, and to exploit the opportunities  ahead, to the enduring advantage of our clients.

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French elections: a Le Pen win would hit euro area periphery

April 18, 2017

While our central scenario discounts the possibility of Marine Le Pen becoming president, her presence in the second round of the presidential election is likely to create considerable nervousness for investors.Our main scenario, a win for a Europhile politician in the second round of the French presidential elections in May, could result in a small relief rally on markets. However, the National Front’s Marine Le Pen is seen as being one of the two candidates to go through from the first round next Sunday to the second round, causing unease on financial markets.Le Pen can probably only hope to win that second round if voter participation collapses. In the unlikely event that she does win, markets would be considerably shaken.On FX markets, the euro would likely fall by about 6% to 13% against the US dollar on a 1-month horizon, probably taking the EUR/USD below parity (barring a significant rise ahead of the elections).French equities are fully integrated in European stock markets (one-third of the Euro Stoxx and one-sixth of the Stoxx 600) and a Le Pen victory would create fears not just for France but for Europe as a whole. Short-term volatility levels are inflated, but investors have not hedged aggressively. As a result, depending on the extent of the currency move, a pull-back of between 5% and 15% is possible.

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Oil industry successfully reinvents itself again

April 12, 2017

Shale oil has forced the conventional oil industry to reinvent itself. Companies have nevertheless demonstrated terrific powers of adaptation, helped by the high-tech nature of the oil industry.In a ‘lower-for-longer price’ environment, there are still attractive themes and equity stories to play, assuming prices remain broadly above USD45-50 per barrel. Valuations generally remain reasonable, especially on the back of the correction since the start of the year. The growth theme is clearly the shale oil story, where both producers and services companies look well positioned—whatever the oil price, shale oil producers will remain the relative winners. Among ‘the rest’ of the oil sector, the large integrated oil majors look the most attractive investment opportunity, albeit not a growth category but more a yield story.The shale oil industry was hit hard by the price slump of the past two years, but the survivors have shifted downwards on the cost curve, thanks to efficiencies and technological progress. Over the long term, we expect further efficiencies to be realised. As a result, US shale output may rise by close to 1m barrels per day (b/d) over the next few years, enough to meet the bulk of global demand growth (1.3m b/d). Across the industry, most companies are positioning for ‘lower-for-longer’ oil prices.High-risk exploration is now a story of the past.

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Monthly Investment Strategy Highlights, April 2017

April 10, 2017

Pictet Wealth Management’s latest positioning in fast-evolving markets. Asset allocationThe first quarter was exceptionally strong for risk assets, and the outlook remains good for developed market (DM) equities.We remain comfortable with our overweight in developed market equities, but it would be wise not to take too much risk in the coming quarter.EM assets may offer attractive opportunities on a tactical basis.CurrenciesThe US dollar probably has only limited further upside, absent a major boost to economic growth.The Swiss franc looks set to retain its safe-haven role.EquitiesThe reflation trade is proving resilient, supported by a good earnings growth outlook.Valuations for DM equities are well above long-run averages and leave little room for disappointment.Fixed incomeWe continue to favour high yield within fixed income.US Treasuries remain important as a protection asset.AlternativesOur focus remains on opportunistic managers with a long volatility profile. At the portfolio level, we aim to keep a low beta to equities and credit.We expect private equity to continue to display attractive returns.

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When headlines start to matter

March 28, 2017

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Published: Tuesday March 28 2017Alexandre Tavazzi, Global Strategist at Pictet Wealth Management on factors that might hit market valuations.

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