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Pictet turns dividend fund into ‘smart city’ play

Pictet AM has repositioned the Pictet High Dividend Selection Fund to focus on investments in companies developing the 'cities of tomorrow'.

Launched in 2010, the High Dividend Selection Fund (HDS) focused on companies that were able to sustainably distribute high dividends, according to the fund factsheet.

As of August 24, the HDS was been renamed the Pictet Smart City Fund. In Hong Kong, it is SFC-registered for sale to retail investors, according to the firm.

The revamped fund’s objective is “long-term capital growth by investing in companies around the world that are helping to develop the cities of tomorrow”, according to the statement.

The product will focus on three themes: Companies involved design, planning and construction, with a focus on efficiency; companies that provide infrastructure and services; and companies that provide services in housing, working and recreational activities, according to the statement.

These companies are mostly found in the mobility and transportation, infrastructure, real estate, sustainable resources management and enabling technologies and services sectors.

“Cities are having to adapt to manage rapidly growing populations, while seeking to reduce their environmental impact. This is creating abundant investment opportunities for our clients,” Ivo Weinöhrl, the Geneva-based manager of the fund, said in the statement.

The product’s investible universe is comprised of 230 companies that have at least 50% of their revenues falling into a particular theme. The portfolio has 40-60 holdings, according to a firm spokeswoman.

Ivo Weinöhrl, who was a co-manager of the HDS fund, will be the lead manager of the Smart City Fund. He will be supported by investment manager Lucia Macaccaro, according to the statement. The other co-managers of the HDS fund, Bruno Lippens, Louis Veillux and Piotr Stopinski, will not be involved in the Smart City Fund but will continue managing other Pictet AM strategies, according to the spokeswoman.

The previous HDS fund had high allocations to the financial and industrial sectors, with Rio Tinto and Toronto Dominion Bank among the top ten holdings. However, a dividend strategy seems distinctly different than a fund investing in the development of cities.

Yet the extent to which allocation will change for the new fund is unclear. The firm spokeswoman was unable to provide a new factsheet and declined to comment on allocation.

The three-year performance of the High Dividend Fund/Smart City Fund vs its reference index

Note: All fund and index NAVs have been converted to US dollars.

Part of the Mark Allen Group.