Pictet – Asian Equities Ex Japan

Pictet believes that Asia (excluding Japan) is an inefficient market, as market participants too often focus on short-term rather than long-term factors. The focus is too much on earnings (which can be manipulated) and too little on cash flow.

The Swiss asset manager pursues an active, research-intensive investment process aimed at identifying the best investment opportunities. The investment philosophy is largely based on cash flow generation while maintaining a strict valuation discipline. According to Pictet, a portfolio consisting of such companies should be able to outperform over market cycles.

Pictet’s Asia ex Japan strategy focuses on two major areas that are neglected by the market:

– Structural growth companies. Companies that are able to maintain their above-average/above-market growth rates and returns

– Companies in a period of transition, where temporarily reduced profits are extrapolated into the future

Pictet’s active management of the Asian Equities Ex Japan fund combines market and fundamental company analysis to select securities that the asset manager believes offer favourable growth prospects at a reasonable price.

ESG factors are a core element of the strategy. For example, Pictet weights securities from issuers with low sustainability risks more heavily or reduces the weighting of securities with high sustainability risks, subject to good governance practices. Activities that have a negative impact on society or the environment are avoided.