HEAD-TO-HEAD: BNP Paribas versus Pictet

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CONCLUSION

Morningstar has awarded the BNP Paribas product three stars based on historical returns, and with a bronze analyst rating. The firm gives the Pictet fund four stars, and a forward-looking analyst rating of bronze.

FE Fundinfo, which bases its assessment on a fund’s three-year history of delivering alpha, minimising relative volatility and producing consistent returns, awards the BNP Paribas product three crowns, and rates the Pictet fund higher with four crowns.

The BNP Paribas product is “a sizeable and well-resourced team and we appreciate its great stability as it has seen only three departures since 2015. Furthermore, we believe this team boasts a high level of expertise in environmental markets,” said van Genderen.

“The portfolio of this strategy is well-concentrated and characterized by its strong tilt toward mid-caps as nearly half of its assets are invested in this segment, so it should perform best when mid-caps are more generally favoured and from a rotation into industrial sectors out of technology,” he said.

Pictet soft-closed its Global Environmental Opportunities Fund in March 2021 as it approached AUM of $10bn, so no new investors will be allowed to invest in the strategy, while existing investors’ subscriptions are limited to $20m a month.

Ecology funds have been in very strong demand over the past 12 months. Over a trailing one-year period up to the end of February 2021, the Pictet strategy saw almost EUR4bn ($4.8bn) of net inflows; it is one of the biggest strategies within the sector equity ecology Morningstar Category.

“Although this strategy is more tilted towards large-caps relative to peers and we haven’t seen any change in portfolio positioning as assets came in, we still view the soft-close as a prudent step,” said van Genderen.

Pictet Global Environmental Opportunities is a solid choice in the ecology space as it boasts an experienced team that benefits from additional resources. The team applies a well-structured and repeatable bottom-up process.

“Its technology sector tilt means that it should perform best when investors are risk-on,” said van Genderen.

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