HEAD-TO-HEAD: Pictet versus T Rowe Price

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Investment approach

The Pictet strategy has a bottom-up approach, with manager Adrian Hickey and the team using liquidity, profit forecasts and return screens to enable them to find the best long and short positions, while target price is used as a key control mechanism, according to McDermott.

“The fund is style agnostic but does have a bias towards larger companies,” he said. “From a sector perspective, the fund tends to have its largest exposures to the likes of consumer products, industrials and telecoms, media and technology stocks.”

The T Rowe Price fund invests in around 60-100 Japanese companies of all sizes, although with a notable overweight to smaller firms, according to McDermott.

“This is a bottom-up fund driven by fundamental research with a long-term focus,” he said.

Ideas come from sector analysts often working with portfolio manager Archie Ciganer, who is actively involved in the idea generation process. Ciganer seeks companies with competitive advantages in areas such as brands and technology, which are characteristics that he thinks are often undervalued by the market.

These companies will usually fall into one of two categories: durable growers that benefit from the current economic climate or transformational stories about to undergo some form of restructuring, according to McDermott.

“Ciganer will adapt his investing style as needed to suit changing market conditions, which has helped him to outperform in different environments,” he said. “The make-up of the fund means it tends to be slightly more volatile than a number of its peers, although under Ciganar’s tenure it has generally lost less than the overall market in tough periods.”

Fund characteristics

Sector allocation:

Source: Fund factsheets, 31 Aug 2021

Top 10 holdings:

Source: Fund factsheets, 31 Aug 2021

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