SFC gives green light to two Pictet ESG funds

The Pictet Global Thematic Opportunities Fund and the Pictet Human Fund are the latest additions to the Securities and Futures Commission (SFC) green fund list.

The two funds are now available to Hong Kong retail investors after the SFC authorised them last week.

Launched in September 2016, the Pictet Global Thematic Opportunities Fund mainly invests in equities which benefit from long-term demographic, environmental, and lifestyle global trends, according to the fund factsheet.

The Luxembourg-domiciled fund, co-managed by Gertjan Van Der Geer and Hans Portner, has a significant allocation to information technology with 40%, followed by health care (18%) and industrials (16%).

Although it is called a global fund, the Global Thematic Opportunities Fund invests 71% of its $1.4bn assets in the US, followed by 8% in China and 5% in Sweden.

Over the past three years, the fund reported a cumulative return of 50.3%, 0.2 percentage points lower than the MSCI AC World index, but higher than the sector average of 41.8%, according to FE Fundinfo.

The regulator also approved the Pictet Human Fund on the same day last week.

The $348m equity-focused product mainly invests in companies contributing to human self-development such as education, distance learning, career development, support services, retirement homes, and entertainment, according to the fund factsheet.

Its highest sector exposure is to what the managers call “care” (39%), “learn” (33%) and “enjoy” (23%). Its biggest country weighting is to the US (60%), followed by the UK and China with 9% and 5% respectively.

Since its inception in December 2020, the fund has posted a 5.3% cumulative return, versus the sector average of 20.3% and MSCI AC World index benchmark return of 21%, according to FE Fundinfo.

Geneva-based Pictet Asset Management currently has $274bn assets under management.

SFC approved funds

First published in December 2019, the list of designated ESG funds approved by the SFC includes products that meet new ESG disclosure requirements aimed at countering greenwashing. These disclosure requirements include the fund’s key investment focus, ESG analysis and evaluation methodologies, and what the firm believes to be relevant “green” or ESG criteria.

The regulator has authorised 64 ESG funds in the city as of 31 August, issued by 29 asset managers. Allianz Global Investors Fund tops the issuer list by managing nine funds, followed by Pictet with eight funds under management. Invesco Funds, Blackrock Global Funds, and Fidelity Funds were tied in third place with five funds each.

Morningstar data in March showed that Hong Kong green and ESG funds posted an average return of 28.7% in 2020, versus the average return of 19.2% for the 900 SFC-authorised equity funds.

Pictet Global Thematic Opportunities Fund vs sector average and benchmark

FE Fundinfo. Three-year cumulative returns in US dollars