EquitiesAug 7 2015

Pictet strategist on make-up of new multi-asset fund

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Pictet strategist on make-up of new multi-asset fund

Luca Paolini, chief strategist at Pictet Asset Management, has revealed where the investment house’s multi-asset trio are ploughing investor’s cash.

In the latest FTAdviser video interview with Money Management’s Julia Faurschou, Mr Paoloni said the fund launched for the trio it hired from Barings was focused mainly on Japanese equities and European equities.

Mr Paolini said the fund also has some exposure in the UK, especially via commercial real estate.

When asked why Pictet’s multi-asset team were looking at Japanese equities, he said it was a combination of good valuations, structural reforms that are very effective and also the Yen being extremely cheap.

He said: “The (Japanese) economy is doing much, much better. So, this is where we think the potential is over the next year or two.

“We still believe we are in a bull market it is just going to be a bit more challenging going forward.

“Our message is don’t panic.”

It was last month that Pictet Asset Management launched a multi-asset fund for the long-standing management trio it hired from Barings.

The team of Percival Stanion, Andrew Cole and Shaniel Ramjee resigned from Barings last year, as revealed by sister title Investment Adviser, and have now launched a new fund at Pictet.

At the time of the launch a spokesman for Pictet said the fund would aim to deliver returns of cash plus 4 per cent a year, net of fees, over a three to five-year period.

Mr Stanion said the fund was aimed at investors “who are looking for steady returns while controlling the volatility of their portfolio”.

Ms Faurschou asked Mr Paolini what investors could expect from global equities in the months to come.

He said the key variable for global equities is the US labour market.

Mr Paolini said: “If you look over the past 30 years the correlation between equities and bonds and jobless claims and the unemployment rate has been extremely high.

“If we see some weakness in the US labour market then we will get much more bearish for global equities. But, at the moment, the US labour market looks very solid to us.”

emma.hughes@ft.com