Pictet’s global multi-asset fund triples to $5 billion on China inflows

Swiss asset manager Pictet has seen its global multi-asset fund, the Pictet Strategic Income Fund, triple in size to over $5 billion this year. This growth is attributed to Chinese investors rushing into overseas assets, including alternatives and products with exposure to AI supply chains. The fund's assets under management increased from $1.6 billion at the beginning of the year to $5.1 billion, with about 60% of the AUM coming from mainland Chinese retail investors through the Mutual Recognition of Funds (MRF) scheme.

The MRF scheme is a cross-border investment channel that allows qualified Hong Kong funds to sell products in mainland China, as Beijing tightened scrutiny on offshore investing earlier this year. Tsang, head of intermediaries for Asia ex-Japan at Pictet Asset Management, noted that deposit yields at home have been declining, while the AI sector has been performing well since the launch of ChatGPT, contributing to this growth.

China's crackdown on cross-border investment through illegal securities led to a shift towards legal channels like MRF and Wealth Management Connect to cater to strong demand from mainland investors. The Pictet Strategic Income Fund led the mainland net inflows via the MRF channel for the first half of the year among 34 funds tracked by Morningstar, attracting HK$16.3 billion ($2.08 billion).

Its top 10 holdings include U.S. Treasuries, gold, and U.S. tech giants Amazon, Alphabet, and Nvidia. Tsang expects MRF to become a mainstream channel for fund sector ties between Hong Kong and mainland China, and Pictet plans to apply for two additional MRF funds.