Since its inception in 1956, artificial intelligence (AI) has experienced several cycles of optimism that have often been quickly followed by disappointment. In 2023, enthusiasm has reached an all-time high with the emergence of generative AI.
Although much of this technology is still new, it is becoming increasingly clear that AI in general could open the door to both economic growth and increased efficiency in a wide variety of industries.
AI is expected to generate around $7 trillion of global economic growth in ten years thanks to productivity growth of 1.5 percentage points per annum1.
How could our technology-themed investment strategies benefit from the growth of AI?
Virtually all of the companies in which our strategies invest are likely to benefit from the expansion of AI in three key areas:
- Enablers: these include semiconductors driving software or electric vehicles and cloud computing providers delivering vital infrastructure to fast-growing industries.
- Developers: companies are using AI to make wide-ranging improvements, from increasing productivity by automating manual processes to using predictive analytics to shape demand for their products.
- Users: technology companies are developing AI-based products such as virtual assistants, as well as innovative business software for sectors such as security, healthcare and finance.
Why do we believe thematic investing is the best approach for technology?
Technology investing based on sectors or benchmarks can force investors to overweight or underweight certain companies in an index. In contrast, our thematic approach sets aside the limitations of benchmarks and instead seeks to create a single, unconstrained investment universe based on megatrends.
This eliminates “forced” investment decisions and allows our investment teams to freely select the best possible stocks.
At Pictet Asset Management, we are pioneers of thematic investing, with USD 70 billion of assets under management across 17 strategies2.
About our thematic technology investment range
The range dates back to 1997 and encompasses three strategies: Digital, Security and Robotics. In addition to offering exposure to the AI megatrend, all three are diversified thematic with their own focus:
Robotics: Invests in companies that are revolutionizing robotics and automation technologies, as well as software companies that drive industrial and enterprise automation.
For more information on our Robotics fund, please click here.
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.
For more information on our Digital fund, please click here.
Security: Invests in the security products and services needed to protect individuals, businesses and governments in a rapidly evolving threat landscape.
For more information on our Security fund, please click here.
How can investors use our technology-themed investment strategies?
Each strategy can be used as a growth driver within an overall equity allocation and has a long-term approach based on active and expert management. In the technology sector in particular, active management helps mitigate issues related to market timing, valuations and capitalization bias.
Opinion article by Anjali Bastianpillai, Senior Client Portfolio Manager at Pictet Asset Management
For more information on the opportunities within our Robotics fund, click here.
(1) Source: Goldman Sachs Global Investment Research, July 2023.
(2) Source: Pictet Asset Management, 07/31/2023. 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.
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