What kind of companies does the fund invest in?
The Pictet-Agriculture Fund has a strong focus on niche companies that operate in various sectors of agriculture. The majority of the fund’s investments are in small and mid-cap stocks, companies that are under-researched by both buy and sell-side analysts but which possess the capacity to deliver strong and sustainable earnings growth over the long term.
The companies we invest in provide important farm inputs such as fertilisers, machinery, and seeds. They also help increase expertise in farming and provide important support through their supply chain services
How do you decide which companies to invest in? And what will you not invest in?
The fund invests according to a set of specific guidelines. It focuses on equity investments in the agriculture value chain – firms that operate in areas such as farming equipment and food distribution - and does not invest in commodities.
It will not invest in companies whose business operations have the potential to damage the environment, and excludes firms with significant exposure to the genetically modified organisms (GMO) industry.
What are the main drivers influencing the future success of your fund?
By investing in companies that stand to benefit from a worldwide push towards more efficient methods of agricultural production, the fund is positioned to capitalise on one of the strongest secular trends in the global economy.
The prospect of merger and acquisition activity across the agricultural sector should also provide strong momentum to the portfolio.
Why should people invest in agriculture? What are the financial and non-financial reasons?
Agriculture is by far the largest employer worldwide and as a sector, it is still fragmented and ripe for consolidation. This means it should presents attractive investment opportunities.
At the same time, investment in agriculture in both the developed and developing world can be expected to rise as the world population grows and demand for food and water increases. Aside from farming, alternative energy also presents numerous investment opportunities as the switch to a more environmentally friendly energy supply that also offers greater security of supply has given biofuels a boost.