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Perspectives Pictet

Perspectives Pictet

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Articles by Perspectives Pictet

Diverse opportunities for investors

5 days ago

Investment in the transition to clean energy is being driven by innovation, the improved economics of renewables and energy storage, health concerns about rising air pollution, and government regulation to reduce energy consumption and emission.It was in 2007 that Pictet launched a strategy that focused on renewable energy which was then fashionable but not cost-effective in comparison with more traditional sources. However, the strategy has changed considerably and is now much broader and more diver­sified than even just a few years ago: e-mobility, smart cities, building auto­mation, energy efficiency, autonomous cars, electrification and storage are all themes which have become an integral part of the energy transition. And with three strong drivers, the strategy is now much more

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Sustainable offices for the cities of the future

12 days ago

An office building in Amsterdam has been designed as a zero-carbonbuilding that occasionally generates more power than it consumes and uses a host of smart technologies to create adaptable and intelligent workspaces.Just under a third of the world’s energy is consumed by buildings that are responsible for about a fifth of global greenhouse gas emissions, according to the International Panel on Climate Change. More worrying, their use of energy could double or even treble by 2050, as billions of people acquire adequate housing and access to electricity. But widespread use of best practices and technologies could stabilise energy use by buildings by 2050, or even reduce it.In practice, buildings offer highly cost-effective oppor­tunities to curb energy demand. The know-how exists to

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Freeing agriculture from climate slavery

19 days ago

Research at MIT’s Media Lab is analysing the climates and environmental conditions that produce the most tasty and nutritious foodstuffs, with the aim of replicating them anywhere in the world – including in fast-growing cities.The Media Lab at the Massachusetts Institute of Technology is not an obvious place to launch a revolution in agriculture. But since it describes itself as an ‘antidisciplinary research lab’ working to reinvent a long list of human activities by the application of technology, it is perhaps the ideal venue for bringing farming into the digital age.Its Open Agriculture (OpenAg) Initiative is collecting and analysing huge amounts of data from around the world to increase our understanding of the best environments for growing fruit, vegetables and other plants. And it

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House View, June 2018

19 days ago

Pictet Wealth Management’s latest positioning across asset classes and investment themes.Asset AllocationOverall, we remain cautiously optimistic about risk assets. We expect economic growth to rebound after a ‘soft patch’ and corporate profitability remains strong, as revealed in Q1 earnings reports.But we recognise that the environment is becoming more challenging for investors. The current environment requires active managers’ heightened sense of adaptability.While we are bearish on euro area peripheral debt as Italian political instability looks set to endure, ultimately we maintain our confidence in the backstops that exist at the European and domestic Italian level designed to keep the euro area intact.Quality company debt is emerging as a ‘safe haven’ alternative to government

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Horizon special

21 days ago

Download issue:English /Français /Deutsch /Español /ItalianoThe latest issue of Perspectives is a special edition devoted to Pictet Wealth Management’s (PWM) analysis of expected returns across 35 asset classes over a 10-year investment horizon, as well as the secular economic and market trends that will underpin those returns. This special edition resumes the more detailed analysis contained in our annual publication, Horizon.Simply put, PWM expects the major asset classes to deliver lower annual returns on average than in the past amid shifts in market and economic regimes and a wave of disruptive innovation. Cash and government bonds could offer poor returns and even equities could prove a less profitable investment than they have been. But alternatives such as private equity and

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Interview with Peter Frankopan

26 days ago

The eminent Oxford historian says that there is nothing new about globalisation, which began as much as 3,000 years ago. A key moment was when Alexander the Great’s conquests connected three continents and opened trading routes between the great cities of antiquity. What was the role of Alexander the Great in globalisation? His conquests between 334 and 323BC drew together North Africa, Europe and Asia and created what could fairly be called a global exchange system. Coins minted by his successors in the East bore Greek text and Indic script, and when Ashoka, the great early Indian emperor started issuing his Edicts a century later, he used multiple languages across the centre of Asia – including Greek, as well as Sanskrit and Indic.Images of the Trojan War and of Hercules standing next

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Building a smart and equitable city

May 14, 2018

When Bill de Blasio was elected New York’s mayor in 2013, he launched the Mayor’s Office of Technology and Innovation to raise the quality of the city’s infrastructure, education system and workforce for the digital era.The Office’s mission statement was to deploy digital technologies to improve the city’s services, but also to use them to develop its economy and create more opportunities for all New Yorkers. One of its first tasks was introducing free-of-charge kindergartens for all four-year-olds, a central part of the Mayor’s election platform.The idea was to start education at the age of four rather than five, seen as a game-changer from the point of view of equity. Inequality starts early, according to Jeff Merritt, the Office’s new Director of Innovation, and day-care in cities like

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House View, May 2018

May 6, 2018

Pictet Wealth Management’s latest positioning across asset classes and investment themes.
Asset Allocation
In spite of a certain loss of momentum in positive surprises, a strong Q1 earnings season continues to justify our bullish stance on equities in most regions. We reiterate our negative view on core government bonds and remain short duration.
Volatility is still higher than last year, and has increased noticeably in the bond market once again. We have been taking measures to calibrate our risk exposures accordingly.
Our most recent tactical move saw us reduce credit risk in our portfolios in favour of short-term US bonds for US investors and absolute return bond funds for other investors. The latter offer more

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House View, May 2018

May 3, 2018

Pictet Wealth Management’s latest positioning across asset classes and investment themes.Asset AllocationIn spite of a certain loss of momentum in positive surprises, a strong Q1 earnings season continues to justify our bullish stance on equities in most regions. We reiterate our negative view on core government bonds and remain short duration.Volatility is still higher than last year, and has increased noticeably in the bond market once again. We have been taking measures to calibrate our risk exposures accordingly.Our most recent tactical move saw us reduce credit risk in our portfolios in favour of short-term US bonds for US investors and absolute return bond funds for other investors. The latter offer more flexibility and greater return potential than corporate credit at a time of

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House View, April 2018

May 2, 2018

Pictet Wealth Management’s latest positioning across asset classes and investment themes.
Asset Allocation
While macroeconomic and corporate fundamentals still favour risk assets, challenges have been steadily increasing and a lot of good news is already priced into valuations. We sold part of our equity overweight during the early March rally.
Even though we have become more prudent about equities’ short-term prospects, we expect to be able to redeploy the cash generated from this sale as new opportunities arise.
The rise in volatility was fully expected but emphasises the need for caution. We are closely monitoring the market’s perceptions of the competitive and regulatory risks emerging for the small number of

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Singapore grows sky-high greens

April 30, 2018

An engineer has devised a vertical farming system to grow green vegetables for the densely populated city-state, using very little water or energy and producing ten times the output per hectare of traditional cultivation methods.As the world’s population continues to grow and move into urban areas, feeding people in cities is recognised as a big challenge. Land is a precious commodity that is often threatened by over-farming, fertilisers pollute waterways, and chemicals to control pests and diseases can adversely affect humans – whether they are those cultivating the land or those eating their products.But a revolutionary new form of vertical farming developed by a Singaporean construction engineer is attracting interest from around the world and plaudits from those who eat the products.

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The future of cities

April 23, 2018

The digital revolution has launched a wave of innovation in the world’s cities, says MIT’s Carlo Ratti, providing opportunities to improve urban mobility and create better workspaces for the changing nature of work.
These are exciting times for cities, according to Carlo Ratti, Director of MIT’s Senseable City Lab and co-founder of Carlo Ratti Associati architecture studio. Although they occupy just 2 per cent of the Earth’s surface, they are home to more than half the world’s population, account for 75 per cent of energy consumption and generate 80 per cent of CO2 emissions. But digital technology, which is disrupting many traditional dimensions of the urban way of life, is creating a wave of innovation to reflect

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House View, April 2018

April 10, 2018

Pictet Wealth Management’s latest positioning across asset classes and investment themes.Asset AllocationWhile macroeconomic and corporate fundamentals still favour risk assets, challenges have been steadily increasing and a lot of good news is already priced into valuations. We sold part of our equity overweight during the early March rally.Even though we have become more prudent about equities’ short-term prospects, we expect to be able to redeploy the cash generated from this sale as new opportunities arise.The rise in volatility was fully expected but emphasises the need for caution. We are closely monitoring the market’s perceptions of the competitive and regulatory risks emerging for the small number of high-growth tech stocks that have led market performance.We remain optimistic

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Endless power for cities from the oceans

April 3, 2018

Two entrepreneurs have developed a simple technology that can generate renewable energy from ocean waves at a price that is competitive with solar power – attracting interest from cities all over the world.More than a billion people live without electricity, mostly in developing countries. Their cities often have access to electricity, but emissions from power plants create high levels of air pollution, which expose their inhabitants to health risks. And bills for imported fuels are rising as electricity generation increases to meet demand.Much of the growth in electricity generation is forecast to come from renewables, as the cost of wind and solar power falls towards that of more traditional energy sources. But one source of renewable energy that has so far made little contribution is

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A period of transition

March 26, 2018

Download issue:English /Français /Deutsch /Español /ItalianoThe early weeks of 2018 were full of twists for financial markets, with a rapid rise in bond yields leading to a short, sharp sell-off in equities. And while volatility subsequently fell back, it has still not returned to the low levels of 2017.What is going on? According to Christophe Donay, Head of Asset Allocation & Macro Research at Pictet Wealth Management (PWM), the correction we saw in early February was “the most visible sign yet of a shift to a new economic policy and market regime”.The previous regime was marked by low growth, low inflation and low interest rates as central banks adopted increasingly accommodative policies, according to Donay, whereas the era we are entering is characterised by higher growth, higher

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A period of transition

March 26, 2018

Download issue:English /Français /Deutsch /Español /ItalianoThe early weeks of 2018 were full of twists for financial markets, with a rapid rise in bond yields leading to a short, sharp sell-off in equities. And while volatility subsequently fell back, it has still not returned to the low levels of 2017.What is going on? According to Christophe Donay, Head of Asset Allocation & Macro Research at Pictet Wealth Management (PWM), the correction we saw in early February was “the most visible sign yet of a shift to a new economic policy and market regime”.The previous regime was marked by low growth, low inflation and low interest rates as central banks adopted increasingly accommodative policies, according to Donay, whereas the era we are entering is characterised by higher growth, higher

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The role of cities in the global economy

March 20, 2018

The Executive Director of the UN Human Settlements Programme describes the reasons why more than half the world’s population has moved into cities and the challenges that need to be confronted to reap the benefits.For almost all of human history, people have lived in small towns, villages or the countryside. But the proportion of the world’s population living in cities has rapidly grown over the last two centuries, from 5 per cent in 1800, to 13 per cent in 1900 and 34 per cent by 1960. In 2008, a significant threshold in global urbanisation was crossed when more than half the people living on the planet had become city-dwellers.Nor are there signs of any slowdown in the growth of cities. According to Dr Joan Clos, Executive Director of UN-Habitat, which has monitored the progress of

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What happens when rates rise?

March 19, 2018

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Since the financial crisis, investors have benefitted from rising bond price, while companies have seen their funding costs decline to the lowest point in decades. But with central banks scaling back their support in response to good economic growth, the years ahead will be very different. Investors need to prepare for a rise in the cost of debt, says Global Strategist Alexandre Tavazzi.

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House View, March 2018

March 7, 2018

Pictet Wealth Management’s latest positioning across asset classes and investment themes.Asset AllocationAlthough markets steadied as February progressed, volatility is unlikely to return to the low levels seen last year. Yet, after a good earnings season, and with strong, synchronised growth, we remain comfortable with our positive stance on developed-market equities. The potential for increased volatility opens the way for trading opportunities – but also calls for extra vigilance, especially if signs of economic overheating cause further nervousness in the fixed-income markets.The pro-cyclical increase in the US fiscal deficit after tax cuts and the agreement to increase federal spending are likely to lead to a rise in the term premium, further justifying our short-duration stance in

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Volatility presents opportunities

February 6, 2018

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A pick-up in inflation fears contributed to the recent spike in bond yields that spilled over into equities. But while inflation remains a risk, Cesar Perez Ruiz, CIO at Pictet Wealth Management, remains sanguine about the global economy and risk assets and sees volatility as an opportunity for tactical positioning.

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House View, February 2018

February 6, 2018

Pictet Wealth Management’s latest positioning across asset classes and investment themes.Asset AllocationCurrent conditions vindicate our continued bullish stance on equities in developed markets and emerging markets (Asia more than Latam). Valuations are high, but they are justified by upwards adjustments to expected earnings growth.But with long-term rates rising, we are expecting a rise in volatility from their low current levels. This should benefit active managers.We remain generally bearish on benchmark US Treasuries and core euro area bonds as yields rise. We are neutral on peripheral euro area bonds, which still have some limited potential for further spread tightening.We believe that quality matters more than ever in credit: now is not the time to take risk. Volatility and

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After an exceptional year…

January 29, 2018

Download issue:English /Français /Deutsch /Español /Italiano2017 was an exceptional vintage for risk assets that will be hard to repeat this year. But the environment could become increasingly favourable for active management as challenges rise and volatility increases. This is one of the main messages from Pictet Wealth Management (PWM) analysts and strategists featured in the 2018 special edition of Perspectives.What might some of those challenges be? Global strategist Alexandre Tavazzi details a number of “known unknowns” ranging from geopolitical shocks, to interest rate surprises and liquidity shortages that could upset the apple cart. Although Tavazzi acknowledges that “the biggest shocks to markets often come unexpected directions”, at least investors can guard against the risks we

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Europe’s renaissance

January 19, 2018

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The euro area is benefitting from a very strong momentum at the start of the year, supporting our view that economic growth will remain broadly stable in 2018 at around 2.3%. Risks to this rosy outlook include political events and a more hawkish ECB, although both look very manageable.

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House View, January 2018

January 12, 2018

Pictet Wealth Management’s latest positioning across asset classes and invesment themes.Asset AllocationEconomic and earnings growth continue to offer good momentum and the possibility of upside surprises for 2018, so we remain overweight developed market (DM) equities.However, uncertainties over other key aspects of the outlook mean that investors may be unwise to lower their defences. We are keeping tail risk mitigation in portfolios.Emerging market (EM) equities should continue to perform in 2018, but we remain prudent about low earnings momentum in some sectors.Declining intra-index correlations and rising volatility will favour active management and stock-picking in 2018.CommoditiesOur base scenario is still for the equilibrium oil price to remain at around USD55-USD58 for WTI in the

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Multi-Generational Wealth, Singapore

December 18, 2017

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The fourth edition of the Asian Family Office Master Class took place in Singapore in November 2017, with about 70 guests attending. The focus was around the three pillars of Pictet’s Family Office offer: family governance, investment governance and operational governance. Among the speakers, we had the pleasure of welcoming José Leyte, Chief Executive Officer of one of the biggest European Family Office in terms of asset under management; Kelly Poon, Partner at Atomico, an innovative venture capital firm who invests in disruptive technology companies; and of course, Pictet’s experts from all around the world.

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Back to normal in markets in 2018

December 14, 2017

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2017 was a remarkable year, with positive returns for a wide array of risk assets. The environment will likely remain supportive as well, but Cesar Perez Ruiz, CIO at Pictet Wealth Management, says he expects more normal market conditions in 2018, with spikes in volatility that offer greater opportunities for active management.

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House View, December 2017

December 13, 2017

Pictet Wealth Management’s latest positioning in fast-evolving markets.Asset allocationEconomic and earnings growth continue to offer good momentum and the possibility of upside surprises for 2018, so we remain overweight DM equities.However, uncertainties over other key aspects of the outlook mean that investors may be unwise to lower their defences. We are keeping tail risk mitigation in portfolios.EM equities should continue to perform in 2018, but the leadership could shift from growth to value stocks. We continue to see selective opportunities in local-and hard-currency emerging-market debt.Declining intra-index correlations, rising volatility and a continued rise in disruptive M&A will favour active management and stock-picking in 2018.CommoditiesWhile a temporary surge in oil

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The Call of Asia

November 30, 2017

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Published: Thursday November 30 2017After a period of disappointment, Asian markets have outperformed for the past two years. And with paradigm shifts in businesses and economies, they still hold plenty of opportunities. So argues David Gaud, Chief Investment Officer for Asia at Pictet Wealth Management.

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Doing nicely

November 24, 2017

Published: 24th November 2017Download issue:English /Français /Deutsch /Español /ItalianoThe upturn in economic growth, benign central banks and improving corporate fundamentals have all ensured that most asset classes are set to finish 2017 in positive territory. But will the good times last?In the view of Pictet Wealth Management’s (PWM) chief investment manager, Cesar Perez Ruiz, next year “currently looks set to be a case of more of the same, at least in the first half”. After nine years, the rally in developed-market equities has certainly matured and valuations are high but “solid fundamentals mean equities still have room to run” in Perez’s view. But there may well be an increase in volatility from this year’s very low levels, especially in view of political and geopolitical

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House View, November 2017

November 14, 2017

Pictet Wealth Management’s latest positioning in fast-evolving markets.Asset allocationWe remain constructive on equities, which are being underpinned in particular by robust earnings growth.However, there are signs of pressure, especially in forex markets, and occasional spikes in volatility are likely, notably as a result of geopolitical risk. It is worth considering risk mitigation for portfolios put options on equity indices are one way to protect some of the downside.US tax cuts could provide a significant boost to 2018 earnings growth and US equities, but the legislative process is likely to dilute and delay the plans that have been outlined.Low correlations and a pick-up in disruptive M&A mean a good environment for active management.CommoditiesWhile a temporary surge in oil prices

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