Smart Cities : equity certificate

Launch of the Smart Cities Equity Certificate

In recent years, the concept of smart cities has really taken off. This is primarily due to large-scale urbanisation, which raises numerous challenges in terms of sustainable development and quality of life.
Our actively managed Smart Cities certificate aims to tap into this trend and the investment opportunities it will generate. Christina Carlsten tells us more.

Rethinking our citiesRethinking our citiesFast-paced urbanisation means our cities need to be run in a more rational way that takes account of all the specificities of urban living and harnesses the latest technology to improve the well-being of city dwellers.
A growing trendOur cities are growing faster than ever before. According to UN estimates, more than half of the world’s population now lives in cities, and this figure is forecast to rise to 70% by 2050. Megacities cover just 2% of the earth’s surface but are responsible for 75% of energy consumption and 80% of greenhouse gas emissions.

Opportunities and challengesToday’s thriving urban areas are typically well organised and offer strong economic growth, allowing them to attract qualified workers. Urbanisation is good for those living in cities because it brings more job opportunities, higher wages and better access to public amenities. It is also good for the country as a whole: big cities tend to be highly productive and innovative and therefore drive growth nationwide. These benefits, however, come with some downsides, such as pollution and traffic congestion, as well as social inequalities, which can lead to an increase in crime.A successful smart city should improve its residents’ quality of life and make certain aspects of their daily lives easier. This can be achieved, for example, by effectively managing public transport, making cities safer, increasing broadband speed and making public services more efficient. City authorities also need to ensure they protect the environment and reduce pollution through effective waste management, renewable energies and low-energy buildings.

Leveraging technology to improve quality of lifeTo become smarter, cities need to embrace cutting-edge technologies. New services that draw on big data have emerged in areas such as transport, energy, security, health care and leisure. The Internet of Things and smart networks also play a major role. To prosper in this new environment, cities will have to reduce their energy costs and improve the quality of their services through increased connectedness.

A major investmentAcross the world, cities of all sizes are starting to develop and implement smart projects. There are now a number of smart city rankings, with the top scores going to Barcelona, Copenhagen, Singapore, London, New York and Paris. But smart urban development is an ongoing process and one that requires major investment, particularly in infrastructure, which is often ageing in industrialised countries or underdeveloped in emerging ones. Unlike conventional bricks and steel infrastructure, 21st-century infrastructure must be connected and fully integrated into its environment in order to reduce the adverse effects of rapid urbanisation and create economic growth.

How to invest in this theme?Our Smart Cities certificate is a basket of shares in companies, based mostly in developed countries, that are developing products, technologies and services for smart cities, with a growing portion of their income generated by these activities.We have identified four main areas: – Smart technology: information and communication technology, including infrastructure and the Internet of Things- Smart living: connected houses, buildings, safety and security, and health care – Smart mobility: smart transport, traffic management- Smart energy and utilities: smart grids, renewable energies, and smart water and waste management   

Advantages of a theme-based basket- Actively managed: Our analysts can quickly change the certificate’s composition in order to take advantage of new opportunities. Given that the smart cities theme is in its early stages, the certificate will be managed from a long-term perspective.- Diversified: The certificate invests in 10–20 listed companies. This theme covers all sectors of the economy, so the certificate is very well diversified. It includes both cyclical stocks (such as techs and industrials) and defensive stocks (such as telecoms and utilities).- Liquid: The certificate will be listed with daily quotes.

This information is intended for private use by clients of Piguet Galland & Cie SA and shall under no circumstances be construed as an offer or an invitation to buy or sell. Piguet Galland & Cie SA disclaims all liability for the accuracy, completeness or permanent availability of the content and for prejudice suffered as a result of actions taken on the basis of these recommendations. Piguet Galland & Cie SA specifically reserves the right to amend this information at any time without prior notice. Past performance does not guarantee any future trend. Restrictions on the purchase or sale of transferable securities, certificates or other financial instruments may apply in certain countries or to certain investors. Each individual investor must be aware of the information and conditions relating to the issuer’s securities and must also make sure, where appropriate, that the investments are suitable for the investor’s particular financial and fiscal situation.