08/10/2010
High Dividend Selection fund from Pictet performing well
p { margin-bottom: 0.08in; } The High Dividend Selection sub-fund of the Luxembourg Sicav Pictet Funds (see Newsmanagers of 14 and 21 June), launched on 14 May 2010, has already attracted EUR95m as of 6 October; the fund had EUR84m as of the end of September. The product is the UCITS-compliant version of a Japanese fund with USD11bn in assets, launched in 2005. Karen Kharmandarian, one of the managers of the product, stated on Thursday in Paris that Pictet will serve subscribers a minimum annual dividend of 4% (or 33 basis points per quarter), and that it will redistribute the remainder at the end of the fiscal year (30 September). Gross returns for the portfolio of about 70 positions currently (of which 86% are investment grade), with good visibility, are about 5 ½%, or a net 4.3-4.4%. The top 10 positions account for about 35% of the total, and the portfolio turnover rate is on a gradual increasing trend, towards 30%. The fund has the quadruple objective of offering higher returns than bonds, diversifying currencies of investments, investing worldwide, and providing good protection against inflation (due to automatic adjustment mechanisms). Pictet has chosen the infrastructure segment, and as benchmark index, the MSCI ACWI top 50% Yield EUR. Geographical diversification serves to minimise regulatory and political risks. Kharmandarian says the fund tends to underperform on strong markets, to be defensive and lose less on falling markets, and to outperform when prices oscillate at high amplitudes.
