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Perspectives Pictet

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Articles by Perspectives Pictet

US outlook after the 2018 midterms

7 days ago

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Following the US midterm elections, Senior US Economist Thomas Costerg and Senior Cross-Asset Strategist Jacques Henry discuss the outlook for the US economy and markets.

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House View, November 2018

13 days ago

Pictet Wealth Management’s latest positioning across asset classes and investment themes.Asset AllocationWhile the recent sell-off might have been overdone in view of fundamentals that remain basically sound, market gyrations and our expectation of further volatility mean we remain neutral equities overall. The current environment favours active management and a tactical allocation approach, exemplified by the partial sale of equity options we acquired to protect portfolios in early October.While markets attempt to find their footing, we are keeping plenty of dry powder to exploit opportunities as they arise. Tactically, we have moved from an overweight to neutral position in sterling and from neutral to undeweight on euro high yield.While we are still underweight core government bonds,

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Rewarding excellence

21 days ago

IMD and Pictet join forces to celebrate and reward leading family enterprises.IMD Lausanne is a world-leading business school based in the Lausanne region. Its Global Family Business Centre, which has operated for more than 30 years, was the first institute to focus on family businesses, their values, the principles they champion and their particular characteristics.In October 2018, Pictet joined forces with IMD to the IMD Global Family Business Award, a prestigious annual prize presented to a company that successfully combines family and business interests, tradition and innovation, while at the same time fully assuming its social responsibilities.“As owners and managers, Pictet’s partners are themselves entrepreneurs, and the way we operate is similar to a family business. We understand

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House View, October 2018

October 4, 2018

Pictet Wealth Management’s latest positioning across asset classes and investment themes.Asset AllocationWe remain underweight or neutral across a number of risk asset classes and overweight liquidity in light of enduring uncertainties, but stand ready to deploy cash as tactical opportunities present themselves.We are neutral DM equities, but pockets of opportunity still exist (in the UK and Japan, for example). EM equities are becoming interesting, but with the risk of further earnings downgrades, the discount they offer may not yet have reached extremes.We remain comfortable with our short duration positioning and underweight allocation to government bonds in general, while we are neutral or underweight credit instruments.CommoditiesBrent crude oil prices regained strong momentum in

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Trade Tensions Special

September 26, 2018

Download issue:English /Français /Deutsch /Español /ItalianoFresh US tariffs against Chinese imports, followed swiftly by Chinese retaliation, are casting a shadow over prospects for the global economy. But just how much could they hurt growth? And what are the implications for various asset classes and for investors?In this special edition of Perspectives, experts at Pictet Wealth Management (PWM) set out to answer these questions.Christophe Donay, PWM’s Chief Strategist and Head of Asset Allocation & Macro Research, starts by putting the current trade tensions into perspective. In his view, trade tensions have been having a “greater bearing” on asset classes than on the real economy. In particular, believes the lack of visibility induced by tariff disputes has contributed to the

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House View, September 2018

September 11, 2018

Pictet Wealth Management’s latest positioning across asset classes and investment themes.Asset AllocationWe maintain our neutral stance on equities overall on a rolling three-to-six month basis. We do have a more upbeat assessment further out, but the autumn is shaping up to be a sensitive time for risk assets overall.Recent sell-offs validate our cautiousness regarding emerging-market (EM) assets in general. But valuations are becoming more interesting and we do have a bullish short-term stance on Asia given increasingly attractive valuations. We have built up cash to seize opportunities there and in other asset classes at the appropriate moment.We are maintaining our neutral tactical stance on US Treasuries, but we are bearish on sovereign bonds overall and we continue to avoid the

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House View, August 2018

August 3, 2018

Pictet Wealth Management’s latest positioning across asset classes and investment themes.Asset AllocationOn a tactical, rolling three-to-six- month basis we are maintaining our neutral stance on developed-market equities in general in light of increasing trade and political frictions, but we remain more upbeat on their prospects further out.We have a bullish short-term stance on Asian (ex-Japan) equities given their increasingly attractive valuations but we are paying close attention to developments in China and remain neutral on emerging equities overall. We are also bullish on Japanese and UK equities.We have a bearish tactical stance on sovereign bonds overall, in large part due to our negative view on low-yielding euro area bonds. We believe the Italian government budget to be

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What will the rest of the year bring?

July 17, 2018

Risk assets have disappointed this year and global equities were trendless, but as long as fundamentals can re-assert themselves, there could still be some life in risk markets.
Global equities were trendless and the overall performance of risk assets lacklustre in the first half of 2018. But while trade tensions have been causing jitters and could continue to do so in the short term, as long as fundamentals are able to re-assert themselves there could still be life in risk markets.
This is the basic message from Christophe Donay, PWM’s Head of Asset Allocation & Macro Research, writing in the August/September 2018 issue of Perspectives.  Initially, Donay expects markets to remain unsettled as trade disputes rumble

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What will the rest of the year bring?

July 17, 2018

Download issue:English /Français /Deutsch /Español /ItalianoRisk assets have disappointed this year and global equities were trendless, but as long as fundamentals can re-assert themselves, there could still be some life in risk markets.Global equities were trendless and the overall performance of risk assets lacklustre in the first half of 2018. But while trade tensions have been causing jitters and could continue to do so in the short term, as long as fundamentals are able to re-assert themselves there could still be life in risk markets.This is the basic message from Christophe Donay, PWM’s Head of Asset Allocation & Macro Research, writing in the August/September 2018 issue of Perspectives.  Initially, Donay expects markets to remain unsettled as trade disputes rumble on, but he

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House View, July 2018

July 7, 2018

Pictet Wealth Management’s latest positioning across asset classes and investment themes.
Asset Allocation
On a tactical, rolling three-to-six-month basis, we are tilting away from a bullish to a neutral stance on developed-market equities as trade and political frictions are rising. That said, we remain more upbeat on their prospects after the summer.
Recent sell-offs have vindicated our cautiousness regarding emerging-market assets in general. But valuations are becoming more interesting, and significant outflows suggest investors in some markets are close to capitulation. Due to their recent decline, Asian equities appear attractive on a valuation basis, but remain sensitive to escalating trade tensions.
Core

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House View, July 2018

July 5, 2018

Pictet Wealth Management’s latest positioning across asset classes and investment themes.Asset AllocationOn a tactical, rolling three-to-six-month basis, we are tilting away from a bullish to a neutral stance on developed-market equities as trade and political frictions are rising. That said, we remain more upbeat on their prospects after the summer.Recent sell-offs have vindicated our cautiousness regarding emerging-market assets in general. But valuations are becoming more interesting, and significant outflows suggest investors in some markets are close to capitulation. Due to their recent decline, Asian equities appear attractive on a valuation basis, but remain sensitive to escalating trade tensions.Core government bonds are providing protection against current uncertainties, so we

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Communal spaces for greater sustainability

June 25, 2018

Photographic artist Simon Roberts says that cities have gradually opened up more of their private land for public use, driven by the noblesse oblige of sovereigns, then philanthropic industrialists, and now city-dwellers demanding more sustainable cities.Until the 17th century, urban parks in Europe were private land – exclusively owned and used by royalty, the nobility and wealthy families. But when Charles II became King of England in 1660, he opened the grounds of St James’s Park next to his palace in Westminster to the public. Previously a preserve for royal deer-hunting, it became one of the earliest public parks in the world, providing access to land in the centre of London.Noblesse oblige was the King’s motive, and he enjoyed using it to entertain his friends and mingle with his

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Diverse opportunities for investors

June 18, 2018

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

June 11, 2018

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

June 4, 2018

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

June 4, 2018

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

June 1, 2018

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

May 28, 2018

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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