The Pictet-Environmental Megatrend Selection Fund is a Ucits III compliant Euro-denominated fund domiciled in Luxembourg which will invest in a selection of global themes including water, clean, energy, timber and agriculture.
Pictet said it has identified these areas as “subject to persistent, secular change capable of generating rich investment themes.” It said changing demographics as well as growing scarcity of water, arable land and timber combined with a shift of energy production to environmentally friendly resources offer potential for long-term growth.
The fund will apply a environmental, social and corporate governance criteria and, with assistance from Ethos, the Swiss Foundation for sustainable development, will actively encourage companies in which it invests to make change.
Dominique Biedermann, managing director of the Ethos Foundation, said: “From an environmental, societal and governance point of view, it makes sense to engage a company in dialogue. But it also gives economic and financial added value. For example, a company active in an environmentally controversial field may ultimately run into serious problems due to long term, unforeseen risks. This can have important financial consequences.”
The underlying investment universe covers about 1,000 publicly-quoted companies with a small-to-mid capitalization bias, combining firms from developed markets with fast-growing companies in emerging markets. While the underlying funds are individually managed, the new fund will employ a strategic allocation process with monthly rebalancing.
