Manulife Global Thematic Opportunities Fund

Manulife Investment Management is proud to introduce to Canadian investors a new approach to global investing through our partnership with Pictet Asset Management, pioneers in thematic investing. With over 20 years of experience, Pictet’s thematic equities team applies thematic approaches they’ve developed from megatrends that will shape our world for decades to come.

Introduction to megatrends

From ideas to investments

Manulife Investment Management is proud to introduce to Canadian investors a new approach to global investing through our partnership with Pictet Asset Management, pioneers in thematic investing. With over 20 years of experience, Pictet’s thematic equities team applies thematic approaches they’ve developed from megatrends that will shape our world for decades to come.

Megatrends are powerful social, demographic, environmental, and technological forces of change that are reshaping our world. These trends are transforming the way countries are governed, companies are run, and people live their lives. Their impact includes the digitalization of the economy, the rapid expansion of cities, and the depletion of the earth's natural resources.

Analyzing and understanding these ideas is a complex task, one that requires a broad range of skills. Pictet works closely with a distinguished group of industry practitioners and academics who have developed a deep understanding of the structural trends transforming our world. It has changed their thinking about what a better functioning economy would look like and the companies set to be the future winners.

Note that this video references the mutual fund. The fund is also available via the Manulife Private Investment Pools - MPIP Segregated Pools, Manulife GIF Select - InvestmentPlus Series, and Manulife GIF Select (original) -75 Series contracts.

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Mega is produced in partnership with Pictet, a pioneer in megatrend-driven thematic investing and partner to several distinguished research institutions and industry practitioners.


14 megatrends transforming our world

  • Network economy

    The increasing connectedness of business processes and economic activity, enabling the transfer of knowledge and goods directly from provider to receiver

  • Sustainability

    The ability to meet current needs without compromising the ability of future generations to meet theirs

  • Knowledge society

    Knowledge is becoming an economic resource in the way raw materials, labour, and capital have traditionally been, as society transitions from the industrial age to the information age

  • Immaterialization

    Consumers are increasingly focusing on the intangible qualities of products and services, such as their ethical or aesthetic appeal, rather than their material attributes

  • Democratization

    More power to the people—politically, economically, and culturally

  • Acceleration and complexity

    The increase in the rate of technological progress over time, resulting in products having a shorter shelf life

  • Technology development

    The application of science and knowledge to commercial or industrial processes

  • Economic growth

    The increase in the world’s capacity to produce goods and services

  • Individualization

    The evolution of a society once characterized by collective norms to one in which freedom of choice and the expression of one’s individuality are more dominant

  • Commercialization

    The process of increasing the efficiency of a sector by transforming it into a commercial business

  • Globalisation

    The increasing global connectedness and flow of people, capital, products, services, information, technology, and culture

  • Polarization

    When extremes grow at the expense of the middle ground

  • Focus on health

    Aging populations, rising wealth, and technological advances are making health a major source of expenditure for governments, organizations, and individuals across the world

  • Demographic development

    The widening demographic divide between countries with younger workers and those, mostly in the West, with an aging and shrinking workforce

Traditional investment approaches are based on indexes that list companies by their market value—in other words, firms that have succeeded in the past. Pictet’s thematic strategies, on the other hand, aim to harness the potential of the companies that will succeed in the future. By identifying the megatrends changing the world, we believe we can select the long-term winners in the global stock markets.

—Hans Peter Portner, Head and Senior Investment Manager, Thematic Equities Team, Pictet Asset Management

Investment themes

Megatrends are converted to investable themes. Investing in global equities using a thematic approach is very different from traditional investment styles. Pictet Asset Management’s thematic equities team identifies themes underpinned by secular trends set to structurally change the way we live, how society operates, or how business is done. They devise focused thematic strategies and create investment universes they believe have the potential to outperform global equity indexes because of their potential to offer long-term sustainable investment returns based on predictable value drivers.

Constructing a focused thematic strategy at the intersection of a number of megatrends allows Pictet’s actively managed thematic strategies to seek a compelling risk-adjusted return over the long run. The more megatrends at play in any area, the more compelling the investment theme becomes. What’s more, their strategies typically focus on companies providing solutions to global challenges and aim to deliver better outcomes not just for investors, but for everyone.

Biotech

Harness the power of medical innovation

With a growing population and increasing life expectancy, the world must find new ways to reduce healthcare costs and keep patients out of hospital. Biotechnology companies, using biological processes to manufacture products intended to improve the quality of our lives, will play a pivotal role in making new discoveries that can help solve these issues.

Megatrend: Biotech. Themes: focus on health, demographic development, technology development, economic growth.

Where megatrends connect, powerful themes emerge

Meeting tomorrow’s healthcare challenges

Biotechnology companies are playing a vital role in the future development of medicines that could help patients survive what are currently fatal diseases and improve the quality of life of people suffering from debilitating conditions. Pictet aims to find the most innovative companies developing drugs that can help combat lifestyle diseases and fatal illnesses, thereby helping ease the pressures on healthcare systems. A fertile corporate environment and ongoing scientific innovation mean the biotechnology industry is home to a large number of compelling opportunities for long-term investors.

There are 7,000 rare diseases, of which fewer than 5% can be treated

Source: “Rare Diseases: A Report on Orphan Drugs in the Pipeline," Pharmaceutical Research and Manufacturers of America, 2013.

Clean Energy

Join the transition to a lower-carbon economy

Increasing energy usage per capita, coupled with rapidly growing populations and economic expansion in emerging markets such as China and India, means demand for energy will continue to rise long into the future. In addition, there’s a drive to establish secure supplies or to become more energy independent within developed countries. What’s more, since fossil fuels are a finite resource, cleaner energy sources can fulfill future requirements and reduce their dependency on energy imports from abroad.

Megatrend: Clean energy. Themes: focus on health, sustainability, technology development, economic growth, globalization.

Where megatrends connect, powerful themes emerge

The winners of the future will be those who save it

We believe there are some excellent reasons to invest in the pioneering companies that are participating in the transition to clean energy. Not only could they help save our planet by limiting climate change, but they have very real potential to deliver strong, sustainable returns, making clean energy one of the most compelling investment opportunities of all.

Only 35% of the energy produced from fossil fuels to generate electricity is actually used, the rest is lost.

Source: International Energy Agency.

Digital

Join in the digital revolution that’s transforming the way we live, work, and communicate

Digital technology has revolutionized the global economy, especially through the growth of mobile internet access. It’s providing faster, cheaper, and more personalized solutions for businesses and consumers.

Megatrend: Digital. Themes: technology development, demographic development, individualization, network economy, democratization, acceleration & complexity.

Where megatrends connect, powerful themes emerge

The digital economy has come of age

Sophisticated artificial intelligence, wearable technology, cryptocurrencies, and the expansion of the Internet of Things are just some of the developments testifying to the pace of change in digital technology. Many digital companies are now supported by solid business models, balance sheets, and earnings. In this period of unprecedented technological innovation, we aim to identify the most compelling opportunities in this fast-growing theme.

The digital economy is growing 3x faster than the global economy

Source: "World Economic Forum," International Monetary Fund, 2015.

Environmental

Harness growth opportunities whilst safeguarding the environment

Protecting the environment is now a priority for consumers, companies, and governments. Their converging interests, driven by increased global awareness, technological advances, and health concerns, are underpinning a global drive to safeguard the world’s natural resources.

Megatrend: environmental. Themes: focus on health, demographic development, sustainability, immaterialization, technology development, economic growth, commercialization, globalization.

Where megatrends connect, powerful themes emerge

Investing for a sustainable future

Environmental issues are now a matter of global importance. Companies that provide effective products and services that increase resource efficiency and minimize pollution are well placed to grow strongly. In our view, by investing in these firms, investors can make a positive contribution towards a more sustainable world, as well as increase the potential for generating attractive capital gains.

The environmental market looks set to grow to US$3T by 2020, at a rate of 6% to 7% per year

Source: Pictet Asset Management, 2017.

Health

Support solutions that improve people’s quality of life

All around the world, people are demanding a higher standard of living, including better healthcare, for themselves and their families. Pharmaceutical, medical, insurance, and healthcare companies are finding new ways to meet this global challenge.

Megatrend: health. Themes: focus on health, demographic development, technology development, economic growth, individualization.

Where megatrends connect, powerful themes emerge

Helping the world enjoy better health

Health has an attractive long-term potential through its focus on the companies most likely to meet the future needs of patients, healthcare professionals, and society. Our approach aims to exploit opportunities across the entire healthcare industry, with a strong focus on firms involved in innovation and increasing efficiency.

By 2050, over 330M people in China will be aged 65 or over— roughly 1 in every 4 people

Source: “World Population Ageing,” United Nations, 2015.

Nutrition

Help prevent and treat disease with nutrition

Malnutrition—eating either too little or too many nutrients—is one of the main social burdens of our time. Vast investment is needed to provide a growing global population with nutritionally high-quality food and deliver this in an efficient and sustainable way.

Megatrend: nutrition. Themes: focus on health, demographic development, sustainability, technology development, globalization.

Where megatrends connect, powerful themes emerge

Food for thought

Nutrition takes a wholly positive approach, aiming to benefit from solutions, not problems—we don’t invest in commodities or speculate on shortages in food. Rather, we focus on companies involved in helping to secure the world’s future food supply and that therefore represent sustainable long-term opportunities for investors.

Every year, about 1/3 of the food produced for human consumption gets wasted worldwide

Source: Food and Agriculture Organization, 2015.

Premium Brands

Share in the potential growth of the global aspirational brands market

Premium brands represent a special case within the retail universe, occupying a unique place within the consumer market and enjoying a range of distinct advantages. These high-end, prestigious companies have a reputation for delivering outstanding quality. This has helped them achieve strong market positions, powerful customer loyalty, and consistent pricing power. High barriers to entry mean the companies are less vulnerable to new competition, while their global reputation makes them attractive to affluent consumers across the world.

Megatrend: nutrition. Themes: demographic development, immaterialization, economic growth, individualization, globalization, polarization.

Where megatrends connect, powerful themes emerge

Invest in some of the world’s most profitable companies

Premium brands seek to capture the strong growth potential of high-end companies, especially those with a proven ability to generate high cash flows and preserve their market share, whatever the economic climate. With the number of affluent consumers increasing steadily across the world, premium brands represent a compelling opportunity for long-term investors.

The world’s high-net-worth individual population grew by 7.5% in 2016, reaching 16.5M people with a collective fortune of US$63.5T

Source: The Telegraph, September 2017.

Robotics

Discover the next frontier of technological achievement

Significant advances in the Internet of Things and artificial intelligence, such as the emergence of deep learning algorithms, are revolutionizing robotics and automation technologies. Robots are no longer confined to the factory floor—they’re becoming part of our day-to-day lives.

Megatrend: robotics. Themes: demographic development, sustainability, technology development, economic growth, knowledge society.

Where megatrends connect, powerful themes emerge

Robotics—the future of technology

Because of its ability to increase productivity, reduce costs, and help solve the challenges linked to an increasingly elderly population, the robotics sector is set to grow significantly faster than the broader economy. Robotics is a theme that will increasingly become a part of everyday life.

The industrial control and factory automation market is expected to reach US$239B by 2023, up from US$155B in 2017

Source: Medical Developments, October 2017.

Security

Support the solutions that create a safer world

Feeling safe and secure is a fundamental human need. Security is becoming increasingly important to governments, businesses, and individuals around the globe. From protecting against cyberattacks and guarding vital infrastructure to food safety and personal security, companies able to meet challenges linked to security will represent attractive long-term opportunities for investors.

Megatrend: security. Themes: globalization, demographic development, acceleration & complexity, technology & development, economic growth.

Where megatrends connect, powerful themes emerge

Help safeguard the health, privacy, and well-being of people everywhere

The security sector is essential to modern life, helping to promote well-being and protect against rapidly changing threats. Security represents the best investment opportunities in a highly innovative and fast-moving sector wherever they are in the world. With so many opportunities still at an early stage of development, we believe the long-term case for investing in security is highly compelling.

The global security market is predicted to be worth around US$370B by 2022

Source: MarketsandMarkets, 2017.

Smart City

Building the future of cities

Cities occupy 2% of the earth’s surface, but they’re home to more than half its population and generate 80% of all economic output. As their populations swell, cities are having to find smarter solutions to meet the needs of their residents and improve their quality of life. We think that there’s a huge growth opportunity for the companies helping to build, run, and manage cities in a better and more sustainable way.

Megatrend: smart city. Themes: Focus on health, demographic development, technology development, economic growth.

Where megatrends connect, powerful themes emerge

Smart city—the future of cities

Innovative companies are developing new ideas and technologies to manage the demands of cities, including reducing the level of pollution they generate, consuming resources more efficiently, and improving healthcare and social facilities. We believe these companies present a significant growth opportunity. Our strategy may suit investors seeking long-term growth by investing in a theme that will shape the cities of tomorrow.

80% of the total investment required for smart cities is expected to come from the private sector

Source: Deloitte, 2017.

Timber

One of the world’s most environmentally friendly, renewable resources

Wood is a highly versatile commodity. It’s an excellent building material and the basis for a wide variety of packaging, board, and paper products. Traditionally, this valuable resource has only been accessible through private equity schemes or direct investment in timberland. By investing in publicly listed companies, our strategy offers the opportunity to invest across the wider timber sector for a more diversified approach.

Megatrend: timber. Themes: demographic development, sustainability, economic growth, globalization.

Where megatrends connect, powerful themes emerge

Investment in timber is essential for a sustainable future

Demand for wood and wood products is increasing, but protecting forests is becoming a strategic priority for governments across the world. This means that forests and timber are likely to become increasingly valuable. Investing in Timber provides investors with the potential to achieve attractive returns and the opportunity to play a part in sustainable forest management.

Every year one acre of trees absorbs the same amount of CO² as produced by a car driving 26,000 miles—that’s more than once around the world

Source: Arbor Environmental Alliance, 2015.

Water

Water is an essential natural resource—and demand is rapidly increasing

Water. Next to oxygen, it’s the most important life support system of all. It has no substitutes, and although its supply is finite, demand is growing.

Megatrend: water. Themes: focus on health, demographic development, sustainability, economic growth, commercialization.

Where megatrends connect, powerful themes emerge

Tap into the most fundamental resource of all

Water is an essential resource for life—no one can live without it. But despite being renewable, it’s also finite. What’s more, global challenges such as urbanization, population growth, and climate change are putting existing water resources under increased stress. This means that the need to secure the current water supply, and increase its capacity through new technology and services, will be a major theme over the years to come—one that benefits from trillions of dollars of investment. Companies able to provide solutions to the global water challenge are likely to represent attractive opportunities for investors for several decades.

Only 0.25% of the planet’s water is usable. The rest is salt water, polluted, or locked up in polar ice caps, glaciers, and permafrost

Source: United Nations Educational, Scientific and Cultural Organization, 2010. 

We identify themes that are underpinned by multiple megatrends—confident that in these themes we can find long-term future winners in the global stock market.

—Hans Peter Portner, Head and Senior Investment Manager, Thematic Equities Team, Pictet Asset Management

The fund

Megatrends are converted to investable themes and packaged together in a single solution.


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Unless otherwise noted, the opinions expressed are those of Pictet Asset Management and not necessarily those of Manulife, are as of the post date, and are subject to change based on market and other conditions. All overviews and commentary are intended to be general in nature and for current interest. Consult with an investment professional regarding your specific investment situation.

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