Fund/Portfolio Size: £5122.00m

Total screened & themed / SRI assets: £49415.00

Total Responsible Ownership assets: £174795.00

Total assets under management: £638000.00

As at: 31/07/26

Contact: lrichards@pictet.com

Overview

Filters

Fund information

Policy

Investment policy and themes. Pictet – Water is an actively managed global equity strategy with a sustainable-investment objective. It invests at least two-thirds of net assets in companies active in water supply and processing, water technologies and environmental services. Eligible activities include water production, conditioning, desalination, supply, transport and distribution; wastewater, sewage and other waste treatment; treatment plants and equipment; and related consulting and engineering. The strategy may also invest in selected air-quality solutions, such as inspection, filtration equipment and vehicle catalytic converters. The intended outcomes include improved water quality and efficiency, broader household access to water and sanitation, and reduced pollution.

Selection and sustainability assessment. The investment team assesses thematic relevance using revenue, EBIT, enterprise value or comparable measures. A proprietary pass/fail framework requires an issuer to have at least 20% combined exposure to eligible activities and to satisfy “do no significant harm” and good-governance tests. ESG analysis is integrated into fundamental research, valuation and portfolio construction and normally covers at least 90% of net assets or issuers. The portfolio is also expected to maintain a better overall ESG profile than the MSCI AC World reference index after removal of the weakest 20% of the investment universe. The index is used for risk monitoring and performance comparison only; it is not a sustainability benchmark and does not constrain active management.

Exclusions and avoidance. The strategy excludes issuers involved in controversial weapons, including anti-personnel mines, cluster munitions, biological and chemical weapons, nuclear weapons and depleted uranium, and applies restrictions to thermal-coal extraction and other materially harmful activities in accordance with Pictet Asset Management’s responsible-investment thresholds. It also excludes severe breaches of the UN Global Compact and OECD Guidelines and high or severe controversies concerning human rights, labour standards, environmental protection and anti-corruption. EU Paris-aligned Benchmark exclusions are applied. Principal adverse impacts are addressed through these screens, the sustainable-investment test, portfolio decisions and active ownership.

Monitoring and stewardship. Holdings are monitored continuously using proprietary research and information from ESG data providers, brokers, rating services and financial and general media. Pictet Asset Management engages companies on material issues, including water pollution and emissions to water, freshwater depletion, climate, biodiversity, human capital and governance. Engagements have defined objectives and progress is tracked through meetings, calls and written dialogue; collaborative engagement may be used where greater influence is needed. Proxy voting is used to protect long-term shareholder interests and promote credible governance, environmental and social practices.

Escalation. Where an issuer does not make satisfactory progress, Pictet Asset Management may vote against management, support shareholder resolutions, participate in collaborative initiatives, reduce the position or sell the holding. A security may also be discontinued if it no longer meets the strategy’s thematic, sustainability, exclusion or governance requirements.

Process

1. Define the investable universe. The investment team starts with global listed equities, including emerging markets, and identifies companies providing water supply and processing, water technology or environmental services. At least two-thirds of net assets are invested in water-sector companies addressing global water challenges. Eligible activities cover water production, conditioning and desalination; supply, transport and distribution; wastewater, sewage and waste treatment; equipment; and related consulting and engineering. Selected air-quality solutions may also qualify.
2. Test thematic contribution. Analysts assess an issuer’s contribution using revenue, EBIT, enterprise value or comparable measures. Under Pictet Asset Management’s proprietary pass/fail framework, an issuer generally requires at least 20% combined exposure to qualifying activities. The team considers the scale and credibility of the contribution to outcomes such as improved water quality and efficiency, greater access to water and sanitation, and reduced pollution.
3. Apply sustainability safeguards and exclusions. Each candidate must pass “do no significant harm” and good-governance tests. Activity- and conduct-based screens remove issuers associated with controversial weapons, thermal coal and other materially harmful activities, severe UN Global Compact or OECD Guidelines breaches, high or severe controversies, and applicable EU Paris-aligned Benchmark exclusions. Principal adverse impacts, including emissions to water, are considered through research, exclusions and investment decisions.
4. Conduct integrated fundamental and ESG research. Portfolio managers and analysts evaluate strategy, competitive positioning, management quality, governance, financial strength, valuation, sustainability risks and opportunities, controversies and adverse impacts. Proprietary research is supplemented by specialist ESG providers, brokers and other third-party research, credit-rating services, non-profit and government sources, and financial and general media. Pictet Asset Management’s Responsible Investment team, ESG specialists and ESG champions support implementation.
5. Construct the portfolio. The investment manager selects companies with attractive long-term growth prospects at reasonable valuations while maintaining the required sustainable-investment and thematic exposure. ESG analysis normally covers at least 90% of net assets or issuers. The portfolio is expected to have a better overall ESG profile than the MSCI AC World reference index after excluding the weakest 20% of the universe. The index is used only for risk monitoring, the performance objective and performance measurement; it does not constrain security selection.
6. Control and monitor. Investment Controlling applies pre- and post-trade checks to enforce exclusions. ESG data are maintained in Pictet Asset Management’s central data infrastructure and reviewed through portfolio-management systems and dashboards; automated alerts and analyst review address material data-quality issues. Holdings are monitored continuously for thematic eligibility, sustainability indicators, controversies, governance and changing risks. The investment manager may add, reduce or discontinue positions where the investment case or sustainability assessment changes.
7. Engage, vote and escalate. Material issues are prioritised for engagement with defined objectives and tracked progress. Investment teams lead or support dialogue, with the Responsible Investment team coordinating and recording activity; collaborative initiatives may be used. Proxy voting complements engagement. If progress is unsatisfactory, escalation may include voting against management, supporting shareholder resolutions, joining collaborative actions, reducing exposure or selling the holding. Newly excluded securities cannot be purchased and existing positions are normally divested on a best-efforts basis within three months.

Resources, Affiliations & Corporate Strategies

Pictet Asset Management’s Responsible Investment Policy is overseen by the Executive Committee within the framework defined by the Pictet Group Stewardship & Sustainability Board. Implementation is supported by a dedicated Responsible Investment team and a network of ESG specialists and champions embedded across investment teams. ESG responsibilities are integrated into research, investment and monitoring processes, with investment teams considering issuer strategy, governance, financial strength, sustainability risks and adverse impacts. Pictet AM uses specialist ESG data providers, internal research and daily ESG data updates through internal systems. Service providers are subject to due diligence overseen by the Pictet Group ESG Data Committee. Active ownership combines targeted in-house engagement, collaborative initiatives and third-party engagement services, with escalation where outcomes are unsatisfactory. Pictet AM is a signatory to the Principles for Responsible Investment and publicly reports on responsible investment activities.

Literature

• Fund overview & literature (including factsheet)
• PAM Responsible Investment Policy
• Responsible Investment Report 2025

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Last amended: 25/01/24 10:45