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Pictet turns dividend fund into ‘smart city’ play

Pictet AM has repositioned the Pictet High Dividend Selection Fund (HDS) Ucits to focus on investments in companies developing the ‘cities of tomorrow’

Launched in 2010, the HDS focused on companies that were able to sustainably distribute high dividends, according to the fund factsheet. As of 24 August, the HDS was been renamed the Pictet Smart City Fund.

The revamped fund’s objective is “long-term capital growth by investing in companies around the world that are helping to develop the cities of tomorrow”, according to a Pictet statement.

The product will focus on three themes: Companies involved design, planning and construction, with a focus on efficiency; companies that provide infrastructure and services; and companies that provide services in housing, working and recreational activities, according to the statement.

These companies are mostly found in the mobility and transportation, infrastructure, real estate, sustainable resources management and enabling technologies and services sectors.

Geneva-based manager of the fund, Ivo Weinöhrl said: “Cities are having to adapt to manage rapidly growing populations, while seeking to reduce their environmental impact. This is creating abundant investment opportunities for our clients”.

The product’s investible universe is comprised of 230 companies that have at least 50% of their revenues falling into a particular theme. The portfolio has 40-60 holdings, according to a firm spokeswoman.

Weinöhrl, who was a co-manager of the HDS fund, will be the lead manager of the Smart City Fund and will be supported by investment manager Lucia Macaccaro.

The other co-managers of the HDS fund, Bruno Lippens, Louis Veillux and Piotr Stopinski, will not be involved in the Smart City Fund but will continue managing other Pictet AM strategies, according to the spokeswoman.

The previous HDS fund had high allocations to the financial and industrial sectors, with Rio Tinto and Toronto Dominion Bank among the top ten holdings. However, a dividend strategy seems distinctly different than a fund investing in the development of cities.

Yet the extent to which allocation will change for the new fund is unclear. The firm spokeswoman was unable to provide a new factsheet and declined to comment on allocation.

Pictet High Dividend/Smart City Fund v benchmark and sector performance three years to 31 July 2018

Pictet SmarCity fund v benchmark and sector performance three years to 31 July 2018

Source: FE Analytics, in euros

According to FE Analytics, the fund still in its High Dividend form had underperformed both its MSCI World benchmark (24.2%) and FCA Recognised international equity sector (13.9%) at 9% over the three years to 31 July 2018.

Francis Nikolai Acosta

Francis is editor for Fund Selector Asia, covering the asset and wealth management industry in Asia. He joined Last Word Media in November 2016. Previously, he was a reporter at Ignites Asia, A Financial...

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