Swiss bank Pictet released its investment outlook during its annual dinner at the British Museum, London. The 10th anniversary of the event provided a rare opportunity to garner the bank’s strategy.
The key takeaways were that the bank is slightly overweight in its allocations towards equity. Pictet also has a large exposure towards alternative investments, suggesting that alternatives have held up well during recent stock market volatility and have played a key role in reducing portfolio volatility for the bank’s clients in August.
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Pictet has opted to have little exposure to emerging markets, and is especially avoiding EM equities and EM currencies.
Pierrre-Alain Warve, chairman of the wealth management investment committee, gave a reaction to the recent China crisis:
"We view the fall in the Chinese stock markets as a sharp correction rather than as the start of a long-run bear market. We feel that the Chinese authorities will manage to keep real GDP growth at close to their 5-7% target."
"Emerging markets will continue to struggle as they adjust to weaker growth in China, the end of the commodity supercycle and a stronger dollar. Commodity producers are still especially vulnerable."
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By GlobalDataPictet continues to have confidence in developed markets, specifically looking at the US Europe and Japan. However, Warve said: "In the event of a shock, we expect US equities to be more resilient than European or Japanese Equities."
M&A Reluctance
Aside from investment outlook, Pictet suggested that they were reluctant to enter into the M&A market. Numerous Swiss private banks have involved themselves with mergers and acquisitions in recent years in a bid to mitigate the growing costs of regulation and compliance.
2015 has included deals in the Swiss private banking space such as UBP’s acquisition of Coutts International and SYZ Group’s acquisition of RBC’s Suisse private banking outfit.
However, Pictet is not keen to enter into the M&A market, rather the bank is concentrating its efforts to grow from within.
