Pictet AI & Automation ETF · AMEX:PBOT
Pictet AI & Automation ETF — Pictet Wealth Management — Investor Presentation (October 2021)
27 slides from Pictet AI & Automation ETF's investor presentation, October 2021
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Slide 2: Macroeconomic background
Macroeconomic background
Slide 3: US momentum may gradually wane while Europe blossoms
US momentum may gradually wane while Europe blossoms Fiscal-monetary support waning but consumer may stay resilient Sharp and early industrial recovery is USA waning with limited new catalysts High vaccination rate a positive allowing Japan ongoing broad reopening/recovery UK Euro area Solid consump
Slide 4: Euro area | Outlook remains on track amid Delta risk
Euro area | Outlook remains on track amid Delta risk Manufacturing PMI Composite PMI Services PMI 105 Real GDP rebased, Q4 2019 = 100 US Euro area 65 60 100 55 50 95 45 40 90 35 30 85 25 20 80 15 10 75 13 14 15 16 17 18 19 20 21 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 PMI: Purchasing Manager
Slide 5: A likely resilient US consumer ahead
A likely resilient US consumer ahead 900 Consumer confidence Langer Consumer loans: credit-card debt Consumer loans: other debt USD Conference Board Consumer Confidence index billion Universitiy of Michigan Consumer Sentiment index 850 150 140 800 130 750 120 700 110 650 100 600 90 550 80 500 70 450
Slide 6: Fiscal policy | Still several hurdles in Congress
Fiscal policy | Still several hurdles in Congress 12000 USD billion $3.5 tn ‘Human infrastructure’ plan 10000 8000 $1.2 tn bipartisan infrastructure framework 6000 $600 cheque Federal top-up of $300 in $2000 cheque unemployment benefits until 4000 Federal top-up in mid-March Total: $6520
Slide 7: Inflation | upside risks due to bottlenecks
Inflation | upside risks due to bottlenecks 10 8 CPI core goods, % y-o-y CPI core services, % y-o-y % Fed funds rate 3-month Libor (USD) Fed dot plot Current eurodollar curve pricing 8 7 6 6 5 4 4 2 3 0 2 -2 1 -4 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 8: Green Marshall Plan | An ambitious plan with many challenges
Green Marshall Plan | An ambitious plan with many challenges 6000 EU Greenhouse gas emissions Ambitious green-house gas Million tonnes of C02 reduction targets of at least 5000 55% in 2030 relative to 1990 levels. 4000 3000 Three most important proposals › A Carbon border tax 2000 EU-27: 2030 (-55%)
Slide 9: German's election | tough coalition talks lie ahead
German’s election | tough coalition talks lie ahead 600 Kenya Germany 206 500 118 Traffic light Grand Left Wing coalition Jamaica 92 400 300 196 83 39 200 Union (CDU/CSU alliance) SPD Grüne FDP 100 AfD Linke Others 0 Total seats: 735 (368 seats for majority) CDU: Christian Democratic Union of German
Slide 10: China | After eliminating poverty, focus shift to 'common prosperity'
China | After eliminating poverty, focus shift to ‘common prosperity’ % Chinese poverty rate Gini Coefficient (2019) 100 More equal More unequal 90 UK 0.23 Sweden 0.28 80 France 0.29 70 Germany 0.30 Japan 0.30 60 Norway 0.31 50 Switzerland 0.31 Italy 0.33 40 Russia 0.38 30 China 0.47 India 0.48 20 U
Slide 11: Asset Class Implications
Asset Class Implications
Slide 12: Earnings | A slower pace of growth from H2 2021
Earnings | A slower pace of growth from H2 2021 110% 02.10.2020 23.08.2021 90% 86.4% 70% 47.0% 50% 2020 covid-19 25.4% 25.4% 27.8% 25.1% 30% 21.1% 13.7% 13.4% 12.4% 10% 5.6% 3.6% 0.2% 1.2% 1.1% 1.2% -10% -1.6% -6.7% 2018 2019 -14.1% 2021 2022 -30% Tax cuts No growth recovery tax risk? -32.1% -50% 03
Slide 13: Supply bottlenecks justify our focus on companies with pricing power
Supply bottlenecks justify our focus on companies with pricing power Corp. profits, % y-o-y (before tax) ISM Manufacturing report on business supplier deliveries 50% 80 Unit labour costs, % y-o-y 2Q average ISM Manufacturing report on business customers' inventories 40% 6% 70 30% 4% 20% 60 2% 10% 50
Slide 14: Covid 19 | Herd immunity predicted timing
Covid 19| Herd immunity predicted timing Share of population fully Projection assuming that vaccination will continue on current pace Share of population fully vaccinated (%) Projection assuming that vaccination will continue on current pace vaccinated (%) 100 100 90%, the definitive mark Spain Ital
Slide 15: YTD flows for cross-continental acquisition coming back in 2021
YTD flows for cross-continental acquisition coming back in 2021 $2n $294bn $101bn $33bn EM $550bn US $4n $174bn $8bn $20bn M&A activity, target is listed with market capitalisation above 1 bn USD Source: Pictet WM - AA&MR, Factset, 24.08.2021 Pictet Wealth Management 15
Slide 16: Cost of an inflation hedge in the equity market is low
Cost of an inflation hedge in the equity market is low 1.8 x Recessions Recessions 1.9 x 1.6 1.7 1.4 1.5 Average 1.2 1.3 Average 1.0 1.1 0.8 0.9 0.6 0.7 0.4 0.5 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 78 81 84 87 90 93 96 99 02 05 08 11 14 17 20 Stocks most anti-correlated
Slide 17: Limited net issuance of US Treasuries until the debt ceiling is raised
Limited net issuance of US Treasuries until the debt ceiling is raised US Treasuries Bills Net issuance Fed Liabilities and Equity - US Treasury General Account USD bn US Treasuries Notes & Bonds net issuance 2'000 USD bn Fed Liabilities and Equity - Reverse Repurchase Agreements 1600 Announced UST
Slide 18: The wave of rating downgrades is turning into a wave of upgrades
The wave of rating downgrades is turning into a wave of upgrades Global US Europe 12M rolling net fallen angel downgrades in % of US HY index 15% 20% 12M rolling rising stars in % of US HY index 10% 6.9% 15% 5% 2.0% 0% 1.0% 10% Face value -5% percentage of rising stars -10% could rise 5% -15% 1.8% -
Slide 19: Prefer to go down the capital structure and be selective
Prefer to go down the capital structure and be selective iBoxx Euro Financials Subordinated - Spread Evergrande (28/06/2025) Huarong (16/01/2025) 70 Yield (in %) iBoxx Euro Non-Financials Subordinated - Spread ICE BofAML Euro High Yield - Spread ICE BofA Euro Corporate - Spread 60 59.4 bps LOWEST Pr
Slide 20: Recently, gold has failed to react to lower US 10-year real rates
Recently, gold has failed to react to lower US 10-year real rates Gold bullion (USD per troy ounce) US 10-year real rates as % (inverted) -1.2 2'000 -0.7 1'800 -0.2 1'600 1'400 0.3 1'200 0.8 1'000 12 13 14 15 16 17 18 19 20 21 Gold vs.10-year US real rates Source: Pictet WM - AA&MR, Bloomberg, 16.09
Slide 21: REITs as an attractive asset class to diversify asset allocation
REITs as an attractive asset class to diversify asset allocation 1600 Bloomberg REIT industrial/warehouse index Bloomberg REIT office property index Bloomberg REIT retail index 1400 1200 1000 800 600 400 200 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Past
Slide 22: Valuation is easing slowly led by cyclical sectors
Valuation is easing slowly led by cyclical sectors 24 32 S&P 500 TOPIX STOXX Europe 600 Cyclicals Defensives Financials Tech Media Telecom 22 20.9 27 20 18 22 15.9 16 15.0 17 14 12 12 10 8 7 12 13 14 15 16 17 18 19 20 21 2015 2016 2017 2018 2019 2020 2021 12-month forward price to earnings - US Fuen
Slide 23: Conclusion
Conclusion
Slide 24: Conclusions
Conclusions PRICING POWER GREEN MARSHALL COMPANIES PLAN CREDIT TRILOGY PRIVATE ASSETS Pictet Wealth Management 24
Slide 25: Legal mentions
Legal mentions STOXX Limited (”STOXX”) is the source of Stoxx 600 and of Euro Stoxx and the data comprised therein. STOXX has not been involved in any way in the creation of any reported information and does not give any warranty and excludes any liability whatsoever (whether in negligence or otherw
Slide 26: Distributors: Banque Pictet & Cie SA
Distributors: Banque Pictet & Cie SA, Route des Acacias 60, 1211 Geneva 73, Switzerland. Banque Pictet & Cie SA is established in Switzerland, exclusively licensed under Swiss Law and therefore subject to the supervision of the Swiss Financial Market Supervisory Authority (FINMA). This marketing com
Slide 27: Pictet
of) PICTET
Pictet Wealth Management — Investor Presentation (October 2021) on 6ix