PICTET NUTRITION FUND: Atypical investment vehicle, aimed at making money for investors in companies involved in sustainable food production
The Pictet Nutrition fund is an unusual investment vehicle, aimed at making money for investors from a portfolio of companies involved in sustainable food production.
Although the £1.6bn investment fund has not been immune to the negative impact of the stock market slump on investor returns, manager Mayssa Al Midani is confident that the Emphasis on such a strong investment theme will produce compelling long-term returns. Over the past year, the fund has posted losses of 10%, compared to a return of 26% over five years.
Managed from Switzerland, Midani says the fund invests in the future of food – “everything from farm to fork”. The focus, she adds, is on identifying companies that make it possible to produce food in a more environmentally friendly way. “It’s about investing in companies that provide solutions, whether it’s helping to beat malnutrition, obesity or protecting the planet from environmental destruction.”
Midani says some of the food production statistics are “frightening” – for example, a third of all food is wasted; one in five deaths worldwide is the result of poor nutrition; more than two billion people in the world are overweight or obese; while food production will need to grow by 60% by 2030 to meet a growing population.
She says there are only 200 stocks in the world that meet her stringent investment criteria. Companies involved in the manufacture of beef, alcohol, confectionery, plastic packaging (for food companies) and synthetic fertilizers and pesticides are systematically excluded.
The result is a portfolio made up of 50 stocks, mainly listed either in the United States or throughout Europe. It will only select companies for the fund that are attractively priced and backed by good management. Most are involved in key areas such as providing solutions to food waste, ethical farming and plant-based food. Among the fund’s top holdings are US-listed Deere – the world’s largest maker of agricultural products – and food waste management firm Darling Ingredients, also based in the US.
Another top 10 holding company, Dutch nutritionist DSM, is a global leader in plant-based feed alternatives and a producer of specialist livestock feed ingredients that offer an alternative to antibiotics.
Only one UK-listed company, delicatessen Compass, enters Pictet’s portfolio, while the only Chinese company held in the fund is dairy company China Mengniu. “Dairy consumption is low in China,” says Midani, “so the opportunities for business growth are huge.”
Midani manages the fund together with Alex Howson. The two managers can also rely on the expertise of an advisory board, made up of specialists in the fields of molecular biology, food technology, systems and international trade.
Pictet is a specialist in thematic investment funds. It has managed such portfolios since 1995 around themes such as water, health, robotics, security, clean energies and wood.
In total, it manages £190bn of fund assets, but it is not alone in identifying food as an attractive long-term investment opportunity. Competing funds include Barings Global Agriculture, BlackRock Nutrition, Sarasin Food & Agricultural Opportunities and Liontrust Sustainable Future Global Growth.
Pictet Nutrition has an annual fee of 1.12% and the fund can be purchased through most investment platforms. With such a specialized focus, it should only be a small part of an overall investment portfolio.