Alexandre Mouthon, Pictet Asset Management
In Hong Kong, there are 24 SFC-authorised funds within the technology, media and telecom (TMT) sector, according to data from FE Analytics.
Two of Pictet’s products, the robotics fund and the digital fund, together account for 40% of the sector’s global AUM ($24.2bn).
Another Pictet tech fund, the Security Fund, has $4.23bn in assets, but is not included in FE’s TMT categorisation.
The products differ from the top five in the sector due to their emphasis on investing in what the firm believes are sustainable technology trends.
Top five biggest tech funds in Hong Kong’s TMT sector
| Pictet Robotics in US |
6.1bn |
| Fidelity Global Technology in US |
3.35bn |
| Pictet Digital in US |
3.15bn |
| Janus Henderson Horizon Global Technology in US |
2.95bn |
| Franklin Technology in US |
2.23bn |
Source: FE Analytics. In US dollars
“With these three funds, we already have good coverage of the most attractive tech trends that are happening now,” Alexandre Mouthon, the firm’s Geneva-based senior product specialist for thematic equities, told FSA, noting that the three funds only became popular a few years ago. In 2012, the combined AUM of the Security and Digital funds was $300m. The robotics fund was not launched yet at the time.
The Security Fund, which was launched in 2006, invests in IT and physical security companies. The Digital Fund, launched in 2008, focuses on software-related themes, such as social media and big data. The Robotics Fund, launched in 2015, focuses on hardware technologies, such as sensor manufacturers and industrial automation.
Under FE’s Hong Kong TMT sector, 11 funds have “global technology” in their names. The three products with assets above $1bn are managed by Fidelity, Janus Henderson and T Rowe Price, while seven funds have assets below $400m each.
Mouthon believes that the thematic funds have become popular among investors based in Asia, but did not provide a breakdown of assets sourced in the region.
The key markets for these funds are Hong Kong, Singapore and Korea, he added.
Keeping a small staff
Themed investing tends to have a smaller staff than generic sector equity funds, he said. The firm’s three funds are managed by six investment managers who do not require support from analysts, according to Mouthon.
“We have decided not to separate the functions of investment managers and research. We don’t need, for example, 20 research analysts looking at these stocks because our thematic approach is more focused than a global technology approach.”
He explained that the investible universe for each thematic fund is relatively small compared to global funds. The robotics and security funds, for example, have around 200 companies in each of their universe, while the digital fund looks at 400 companies.
When asked whether Pictet AM will be launching other thematic technology funds, Mouthon acknowledged that it will be difficult to roll out a new product without having an overlap with the existing funds.
“Overlap is something that we try to avoid because you will introduce some confusion in the heads of investors.”
However, Mouthon has some ideas about managing a technology fund that invest in small caps, noting that it is only an idea and is not in the firm’s pipeline of products that will be launched.
“We could think about launching products that focus on small caps in the tech space, but there are not many companies to invest in and the fund size will be limited – probably to not more than $1bn because of liquidity reasons.”
The three-year performance of the Security and Digital funds, and the performance of the Robotics fund since its inception, versus their benchmark index.
