A portfolio of global stocks designed to benefit from the growing imbalance between water supply and demand.
1) The fund seeks to increase the value of its assets over the medium term by investing in equities and/or equity equivalent securities issued by companies that conduct a significant part of their business in water and related or connected sectors.
2) The fund has significant exposure to a single sector and is likely to be subject to a greater concentration risk and higher volatility than a more diversified investment.
3) The fund has significant equity exposure. Risks of equity market may include significant fluctuations in prices, negative information about the issuer or market. Fluctuations are often amplified in the short term.
4) The management company may at its discretion pay dividends out of the capital of the fund. Payment of dividends out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment. Any distributions involving payment of dividends out of the fund’s capital may result in an immediate reduction of the net asset value per share.
5) The monthly distribution share classes will continue to distribute monthly dividends in periods when the fund has negative return, which will further reduce the net asset value of the fund.
6) Investors should not solely rely on this document to make any investment decision. Please refer to the Hong Kong offering document for further information (including the risk factors) about the fund.
Exponential needs, pollution, chronic drought… All these elements obviously raise the question of access to water, a future thematic, for which we estimate needs will grow at 10% per year for the next 20 years.
Demographic growth and improving living standards have resulted in water consumption doubling in the last 30 years throughout the world, whether for agriculture, industry or households. Water is a rare resource for which demand will continue to grow both in emerging and developed countries. The latter are faced with the obsolescence of their water treatment and supply infrastructure and will therefore have to make heavy investments. Agricultural production requires large quantities of water and the increase in consumption as the world’s population grows will lead to making water more expensive. Finally, climate change is causing both droughts and flooding to worsen and is increasing water scarcity. All these factors make water a major imperative as well as being catalysts for growth for the water sector over the long term.
Several initiatives need to be put in place to resolve the problems discussed above and to provide access to water for as many people as possible:
- equip emerging countries with modern water treatment and supply facilities
- cut down on the amount of water used in agricultural livestock and crop production
- make existing water conveyance networks more efficient to avoid water loss in older cities (such as London and Mexico) where the systems have become dilapidated
- improve waste water and sewage treatment
- limit pollution of the water tables
Companies active in these different water domains should therefore directly benefit from such initiative.
- BNP Paribas Aqua: An equity fund invested in the stocks of international companies whose business is related to the water sector. This includes: water treatment, saving and recycling technologies, the installation, maintenance and renovation of water conveyance networks, and water sanitation and decontamination. Such companies are prospering in both emerging and developed countries, and provide investors with a balanced mix of small capitalisation companies that are often innovative players, and large cap companies that are often well-established players.
- Awarded labels: SRI* and Febelfin**
- Managed by Impax Asset Management: an award-winning global leader with over 20 years’ experience in environmental markets investing and a partner of BNP Paribas Asset Management.***
* Source: SRI Label, December 2019. The “Sustainable and Responsible Investment” (SRI) label is a tool for selecting responsible and sustainable investments, created and supported by the French Ministry of Finance. It also aims to ensure that the management of the fund is based on a solid methodology, with a high degree transparency and quality information. To obtain the SRI label, a fund must meet a set of criteria, divided into six themes. For more information: www.lelabelisr.fr/ ** Source: Febelfin, December 2019. Created by the Belgian federation of the financial sector in 2019, the Febelfin label was designed as a standard or quality standard that all funds claiming to be sustainable, socially responsible, or ethical must respect. It aims to become a market standard, at least for Belgium. For more information: www.towardssustainability.be/ *** Source: Impax Asset Management, as of end December 2019. Parvest Aqua becomes BNP Paribas Aqua from 30/08/2019.