Geneva-based Pictet Asset Management has launched the FP Pictet Multi Asset Portfolio, its first onshore fund for UK investors, which aims to produce equity-like returns with lower volatility.
The fund will be actively managed from the London office by managers Percival Stanion, Andrew Cole, and Shaniel Ramjee, all of whom moved together from Baring Asset Management to Pictet in November 2014.
The multi-asset portfolio will invest in a number of different asset classes, including bonds, equities, ETFs, and real assets such as property, although it will maintain a minimum of 60 per cent exposure to sterling. It is a non-Ucits retail scheme and has daily liquidity.
While the team will look to deliver returns similar to those of equity investments – which they define as 4 per cent per year, net of fees over a three- to five-year period – they will focus on reducing volatility and managing downside risk, aiming to achieve returns with less than 75 per cent of the risk of global equities over the same time period.
A number of major platforms will offer the portfolio, including Aegon, Alliance Trust, Aviva, Fidelity, FNZ, Hargreaves Lansdown, James Hay, Novia, Pershing, Transact and Zurich. Cofunds will also offer the portfolio at a reduced management fee of 0.275 per cent through the E share class until the end of this year or the first £400m invested.
The new portfolio from Pictet has been expected ever since it was announced in August last year that the three fund managers would move from Baring. This demonstrates the desire of the Switzerland-based firm to further expand to UK investors, as well as to put greater focus on the multi-asset business. Of Pictet’s total €149bn assets under management, only €18bn is allocated to multi-asset and alternatives.
The company’s greatest focus is on active equities at €41bn. This multi-asset offering set up for the trio has so far told investors exactly what they want to hear – aiming to deliver returns similar to investing in equities, but with much less volatility and risk. However, there is a stated recognition that one year of poor returns could undo several years of growth.
This all sounds like a painfully simple prospect for a group of managers who, after managing multi-asset funds together since 2001, should know better than to make such lofty market assumptions.