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 pricesRead More »
Articles by Perspectives Pictet
Published: Tuesday November 07 2017Stephen Barber digs into the foundations of sustainable investment.Humans are not, by nature, very sustainable. We collapse and dissolve all too soon.It’s because life is so desperately brief for all of us that a capacity to think and act sustainably is such a daunting task – yet, when achieved, it is also a deeply impressive concept. Housed in fragile bodies, daily subject to short-term appetites, we are sometimes nevertheless capable of identifying with projects that will persist beyond our mortal bodies.One of the best known instances of sustainable thinking emerged in Renaissance Florence, where the ruling Medici family worked to remake their city into the beautiful piece of civic architecture it is today. Crucially, the Medici did not want to buildRead More »
Published: Monday November 06 2017Two sixth-generation members of the Boghossian family are continuing to develop high-end jewellery with their father and uncle, blending Eastern and Western cultures to create contemporary masterpieces.In the exclusive world of high-end jewellers, the Geneva-based Boghossian House is making waves with stunning pieces of fine and high jewellery that reflect its Armenian heritage. Now run by the fifth and sixth generations of the family, its origins date back 150 years to a city on the Silk Road which linked East and West for many centuries. And its distinctive designs draw inspiration from sophisticated Eastern techniques and apply them to modern Western aesthetics.One such is the firm’s signature ‘The Art of Inlay’ pieces which set one gem within another.Read More »
Published: Friday November 03 2017Peace Boat, founded by a group of Japanese students over three decades ago, sails around the world, enabling people to engage across borders, fostering dialogue and mutual cooperation – a floating bridge between culturesThe world faces many serious challenges, such as armed conflicts, nuclear threats, poverty, disease and environmental threats – and finding solutions often seems to be beyond the reach of individuals and communities. But in 1983, a Japanese student decided to devote himself to working for peace in the Asia-Pacific region by launching a Peace Boat cruise to visit neighbouring nations and build grassroots reconciliation and friendship.The first voyage was financed by a group of friends who split the cost of chartering a ship. But todayRead More »
Published: Thursday November 02 2017Olivier Capt says that technology will transform the wealth management industry, leading to higher client engagement, better advice and superior service.Winston Churchill once said: ‘Out of intense complexities, intense simplicities emerge.’ This is exactly what technology is driving today. Intense simplification is at work in all industries and customers now purchase, book, compare and select without relying on intermediaries.Humans are known to be lazy by nature, so why would they prefer executing an action themselves rather than merely asking someone for help, even when cost is not an issue? Because, technology simplifies the undertaking of a complex task, removing the desire to ask someone else to carry it out. Adios complexity, helloRead More »
Published: Wednesday November 01 2017The former UN climate chief who presided over the negotiations that led to the 2015 Paris agreement on global warming is now urging investors, businesses and policymakers to grab ‘the opportunity of the century’ and invest in an economy-wide transition to a low carbon world.Words like ‘2020’, ‘milestones’ and ‘optimism’ which are scribbled on the windows-cum-whiteboard in Christiana Figueres’ reception room give some clues into the thinking of the former UN climate chief, who presided over the COP21 negotiations that led to the historic 2015 Paris agreement on global warming.The Costa Rican diplomat now leads Mission 2020, a global initiative to urge businesses, investors and policymakers to take bold steps that would radically reduce carbon emissionsRead More »
Published: Tuesday October 31 2017Renaud de Planta argues that if the majority of investors embrace index funds, they are likely to lead to less efficient markets and weaker corporate governance.To its growing band of proponents, passive investing is looked on as a panacea. Equity tracker funds, we’re told, will rid the financial market of toxic elements and restore it to full health.At first glance, it’s a persuasive argument. Poorly performing and expensive active managers have lingered in the system for too long, eroding returns for investors. Yet on deeper reflection, index-tracking products are no miracle remedy. They’re more like antibiotics: valuable when deployed in moderation, but likely to do more harm than good should their use become widespread.If passive equity funds,Read More »
Published: Monday October 30 2017Ivan Lansberg and Wendy Ulaszek say that in addition to running the company, an integral part of a successful family enterprise leader’s job is tending to the needs of the family which owns the businesses, whether or notthey are a family memberDuring a recent meeting with the chief executive of a large family-owned European company, we were discussing his succession plan when he stepped aside to take a call. It was from the daughter of a family shareholder on what we later learned was a tricky health matter.The fact that he took the call was not entirely surprising, but we witnessed how genuinely interested and sensitive he was in supporting the daughter through a difficult conversation. The call ended and the CEO – who was not a member of the family –Read More »
Published: Friday October 27 2017Kyongchol (Richard) Kim, Managing Director of a Singapore-based single family office (SFO), describes how he came into his current role, what the investment strategy is, and the advice he would give to anyone thinking of setting up a family office.After working for a government-owned financial institution in South Korea, Kim recognised that his country’s bond and equity markets were too small for its fast-growing pension funds and insurance companies. Buoyed by his experience overseas in Australia and the US, he believed that there would be a greater demand for alternative investments and that private equity would be one of their top preferred asset classes.Thus, he created a private equity fund which, bolstered by the momentum of the increased liquidityRead More »
Published: Thursday October 26 2017Real Estate expert and founder of Mack Real Estate Group Richard Mack tells Pictet’s Laurent Gabert about his latest venturesAlthough Mack Real Estate is a newcomer, you have been a leading investor in this field for decades. Could you describe your latest venture?In 2013, after selling the real estate private equity business AREA – formerly known as Apollo Real Estate Advisors – our family’s aspiration was for a new firm that would think like a family office and operate like an institutional investment firm. I run Mack Real Estate Group together with my father William and brother Stephen; we do not want to invest or sell unless it is optimal. While pension and insurance companies are obliged to deploy capital at all times, I hope our new venture canRead More »
Published: Monday October 23 2017Mattias Ljungman, co-founder and partner at venture capital firm Atomico, says that whatever Donald Trump may want you to think, he and politicians like him are not the decisive change-makers of our age.
It is clear that governments cannot solve our greatest problems on their own. Many of the challenges the world faces today have been on the agenda for years. Two of the greatest – climate change and the provision of adequate and manageable healthcare – have been grappled with by governments for decades to varying degrees of dissatisfaction.
For real progress we need to turn to the entrepreneurs employing cutting-edge technology, who are our best hope for change. I am not referring to Mark Zuckerberg and Bill Gates – although they are doing amazing things
Published: Friday October 20 2017Mervyn King, Governor of the Bank of England between 2003 and 2013, discusses monetary policy since the financial crisis and what comes next with Cesar Perez Ruiz, Chief Investment Officer of Pictet Wealth Management.You once said that central banks need to be ‘as boring as possible’. Is that still the case today?Central banks should respond to developments in the economy as predictably as possible, so the news should not be about debates within a policy committee, who is going to vote for a rise or for a cut, but about the implications for the future of recent data on the economy. And that predictable response of central banks to the data is what I meant by central banks being boring. I think that it is still important.
Do you think Quantitative Easing
Published: Wednesday October 11 2017The 4th Pictet Entrepreneurs Summit held in Geneva in September 2017 brought together an exclusive group of 60 entrepreneurs and investors with a passion for innovation. On day one the focus was on the future of cities, food, agriculture, health and living in a secure world, while on day two the discussions centred on the topics of success, personal wealth and responsibility.
Pictet Wealth Management’s latest positioning in fast-evolving markets.Asset allocationHeadline volatility on equity markets remains low, and given robust economic and earnings growth we are still constructive on equities, particularly the euro area and Japan. We are neutral on the US, selective on Swiss stocks, and underweight the UK.However, there are signs of pressure, notably in forex markets, and headline volatility could rise in the coming months. Moreover, geopolitical risk remains elevated, and we are keeping protection in portfolios against downside risk.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, since we remain sceptical about US fiscal stimulus. However, it is important toRead More »
Published: Friday October 06 2017Christophe Donay, Chief Strategist at Pictet Wealth Management, discusses the synchronised global recovery and chances that equity bull market will continue for a while longer.
Published: 4th October 2017Download issue:English /Français /Deutsch /Español /ItalianoThe strong equity gains of early 2017 petered out over the summer, in spite of buoyant earnings, reflecting the market’s belief that remaining upside in equites remains limited, especially in the absence of meaningful tax stimulus in the US. Reflecting relatively modest prospects, Pictet Wealth Management (PWM) recently moved from a positive to a neutral position on a number of sectors in both the US and Europe. And yet, as PWM’s Frank Bigler, Head of Equity and Credit Research, argues in the October-November edition of Perspectives, “while we no longer expect any meaningful breakthrough on this front…we think the market can still be wrong-footed by any kind of political breakthrough.”Christophe Donay,Read More »
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.
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 aroundRead More »
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 andRead More »
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 scientificRead More »
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 vulnerabilitiesRead More »
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 inspectionRead More »
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 geopoliticalRead More »
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 allRead More »
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 devisedRead More »
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 canRead More »
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 interceptRead More »
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 PalestinianRead More »
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 newRead More »
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 PatriciaRead More »