HEAD-TO-HEAD: JGF-Jupiter versus Pictet

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Darius McDermott, Chelsea Financial Services

Introduction

Thematic funds have attracted increasing levels of interest among investors during the past decade, as new technologies have emerged and continue to evolve that reshape human activity. At the same time, anxieties have grown about the impact of human actions on the earth’s climate and environment, which has led to asset managers offering products that cater to those concerns.

Indeed, the collective AUM in thematic funds worldwide nearly tripled to about $195bn from $75bn during the three years to 31 December 2019, representing 1% of total global equity fund assets, according to a Morningstar report released in February.

Last year, 154 new thematic funds were launched, bringing the total to 923, and some of these products were “driven by genuinely long-term themes that are expected to play out over many years,” noted Wing Chan, a Morningstar director of research and a co-author of the “Global Thematic Funds Landscape Report”.

Meanwhile, the incorporation of ESG principles in the investment process of many types of equity and bond funds is becoming commonplace, with discussions focusing more on the accuracy and transparency of their application rather than relevance.

Yet, although ESG is quickly turning mainstream, there is clearly appetite for specialist funds that concentrate on the “E” of the ESG package, and hope to prosper from consumer and industry trends toward alternative energies, better waste and water management, recycling, sustainable agriculture and the new technologies that facilitate them.

FSA asked Darius McDermott, managing director at Chelsea Financial Services, to compare two funds which have the environment as their core theme: the JGF-Jupiter Global Ecology Growth and Pictet Global Environmental Opportunities.

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