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Frequently asked questions

Frequently asked questions (FAQ) or Questions and Answers (Q&A) are listed questions and answers all supposed to be commonly asked in some context and pertaining to a particular topic.

Our primary focus is on the bigger decisions we take in the portfolio and their impact on its level of risk. That is where our returns come from.

We aim to uncover the unexpected. Over the short run, markets are more volatile than economic reality. This leads to the mispricing of assets, which presents opportunities for tactical asset allocation.

Our long experience and understanding of the changing relationship between assets enables us to identify undervalued investment opportunities when other investors either cannot see past their short-term fears, or when their attention is held elsewhere.

It can take time for the market to wake up to these opportunities, but their turnaround can be rapid, and often without any obvious catalyst. It takes conviction to buy in beforehand, and patience to wait.

Conviction and patience are important. As well as actively seeking the right level of risk.

Percival Stanion, Head of Multi Asset

The changing relationship between assets makes active risk management an essential part of multi-asset investing. Our management of risk is focused on the big-picture asset allocation decisions we take and the active diversification of our portfolio to suit the prevailing conditions. One disastrous year destroys several years of growth, so risk levels need to be adjusted appropriately through the cycle.

Truly dynamic risk management enables us to adapt to rapidly changing markets. During times of uncertainty and risk aversion we have the ability to increase our exposure to defensive assets, with the aim of controlling volatility and protecting the portfolio.

A clear and simple portfolio

With our FP Pictet Multi Asset Portfolio fund we aim to keep the management of risk in the portfolio as simple as possible. We implement each investment in the most straightforward way we can. This means we build a simple, high-conviction portfolio of our best ideas, using the simple building blocks of everyday asset classes or investment securities that any investor can understand.

Our aim is to make our portfolio simple and transparent for investors.

We have the flexibility to invest directly in underlying securities, in a fund managed by Pictet Asset Management or in a fund managed by a third-party manager. Where the asset class and market are efficient, we often invest through an index fund or an ETF.
This means that in our risk analysis we don’t have to worry about leverage, the downside risk of short positions, or any other opaque investment instruments. And for our investors, our portfolio is simple and transparent in what we invest in and how it will perform.