Investing in the future of technology: AI and beyond
Overview
Since it was established in 1956, Artificial Intelligence (AI) has undergone multiple cycles of optimism, often swiftly followed by disappointment. Since 2023 there has been a peak of excitement around generative AI.
While much of this technology is still new, it is becoming clear that AI more broadly could unlock both economic growth and increased efficiency across a wide range of industries.
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AI is projected to drive around $7tn
in global economic growth over 10 years, underpinned by productivity growing 1.5 percentage points faster annualy.
Source: Goldman Sachs Global Investment Research, July 2023.
How could our thematic technology strategies benefit from the growth of AI?
Nearly all the companies our strategies invest in are likely to benefit from the expansion of AI in three key areas:
- Enablers: These include the semiconductors powering software or electric vehicles and the cloud computing providers offering vital infrastructure to fast-growing industries.
- Developers: Companies are using AI to make wide-ranging improvements – from boosting productivity by automating manual processes to using predictive analytics in order to model demand for their products.
- Users: Tech companies are developing AI-powered products such as virtual assistants as well as innovative enterprise software for industries such as security, healthcare and finance.
Why do we believe that thematic investing is the best approach for technology?
Investing in technology based on sectors or benchmarks can compel investors to be overweight or underweight certain companies in an index. In contrast, our thematic approach is one that sets aside benchmark constraints and seeks instead to construct a unique, unconstrained investment universe based on Megatrends.
This eliminates 'forced' investment decisions and gives our investment teams the freedom to select the best stocks possible.
At Pictet Asset Management we are the pioneers of thematic investing, with USD 70 Bn in asset under management across 17 strategiesPictet Asset Management as of 31.08.2024. Strategies include: Biotech, China Environmental Opportunities, Clean Energy Transition, Digital, Global Environmental Opportunities, Global Megatrend Selection, Global Thematic Opportunities, Health, Human, Nutrition, Premium Brands, ReGeneration, Robotics, Security, SmartCity, Timber, Water..
Discover our thematic technology range
The range dates back to 1997 and encompasses three strategies: Digital, Security and Robotics. In addition to providing exposure to AI, all three are diversified themes with their own focus:
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Digital
Invests in companies that leverage data, technology and online platforms to deliver innovative products and services in the Digital economy, and the companies that enable them.
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Robotics
Invests in companies revolutionising robotics and automation technologies as well as software companies driving industry and enterprise automation.
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Security
Invests in the security products and services needed to protect individuals, companies and governments in a fast-evolving threat landscape.
Interested in learning more about Thematic Technology investing?
How can investors use our thematic technology strategies?
Each strategy can be used as a growth engine building block within a global equity allocation and has a long-term approach based on experienced active management.
In the technology space in particular, active management helps to mitigate issues around market timing, valuations and capitalisation bias.