PICTET NUTRITION FUND: £1.6bn fund gives investors food for thought

Fund Pictet Nutrition is an unusual investment vehicle, aiming to make money for investors from a portfolio of companies involved in sustainable food production. 

Although the £1.6billion investment fund has not been immune from the adverse impact of falling stock markets on investor returns, manager Mayssa Al Midani is convinced its focus on such a strong investment theme will deliver compelling long-term returns. Over the past year, the fund has produced losses of 10 per cent, compared to a five-year return of 26 per cent. 

Run from Switzerland, Midani says the fund invests in the future of food – ‘everything from the farm through to the fork’. The emphasis, she adds, is on identifying companies that are enabling food to be produced in a more environmentally friendly way. ‘It’s all about investing in companies that are providing solutions, whether it’s in helping conquer malnutrition, obesity or safeguarding the planet from environmental destruction.’ 

Midani says some of the statistics around food production are ‘frightening’ – for example, a third of all food is wasted; one in five deaths worldwide are a result of poor nutrition; more than two billion people worldwide are overweight or obese; while food production will have to grow by 60 per cent between now and 2030 to cater for a growing population.

She says there are just 200 stocks worldwide that meet its stiff investment criteria. Companies that are involved in the manufacture of beef, alcohol, confectionery, plastic packaging (for food companies), and synthetic fertilisers and pesticides are routinely excluded. 

The result is a portfolio comprising 50 stocks, primarily listed either in the United States or across Europe. It will only pick companies for the fund that are attractively priced and backed by good management. Most are involved in key areas such as providing food waste solutions, ethical agriculture and plant-based food. Among the fund’s biggest holdings are US-listed Deere – the world’s leading manufacturer of agricultural products – and food waste management company Darling Ingredients, also based in the US. 

Another top ten holding is Dutch nutrition product specialist DSM which is a world leader in plant-based food alternatives and a producer of specialist feed ingredients for livestock that provide an alternative to antibiotics. 

Only one UK-listed business, caterer Compass, makes it into Pictet’s portfolio, while the only Chinese company held in the fund is dairy products business China Mengniu. ‘Dairy consumption is low in China,’ says Midani, ‘so the scope for growth in the business is massive.’ 

Midani runs the fund in conjunction with Alex Howson. The two managers are also able to draw on the expert knowledge of an ‘advisory board’, comprising specialists in the areas of molecular biology, food technology, systems and international trade. 

Pictet is a specialist in theme-based investment funds. It has been managing such portfolios since 1995, based around themes such as water, health, robotics, security, clean energy and timber. 

In total, it manages fund assets of £190billion, but it is not alone in identifying food as an attractive long-term investment opportunity. Rival funds include Barings Global Agriculture, BlackRock Nutrition, Sarasin Food & Agricultural Opportunities and Liontrust Sustainable Future Global Growth. 

Pictet Nutrition has annual charges of 1.12 per cent and the fund can be bought via most investment platforms. With such a specialist focus, it should only form a small slice of an overall investment portfolio.