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Pictet Timber taps into emerging markets

The Pictet Timber fund is well diversified with significant exposure to emerging markets timber demand.
September 13, 2011

The Pictet Timber Fund (share class 'P dy GBP') is a sub-fund of the Luxembourg-registered Pictet Sicav (société d'investissement a capital variable, a European open-ended fund structure). The fund seeks capital growth by investing at least two-thirds of its total assets in a diversified portfolio of companies operating in the financing, plantation and management of forests and wooded regions and/or the processing, production and distribution of timber and other products derived from wood.

The fund principally targets companies owning forests, after having valued their assets.With a portfolio of 53 investments, which are not restricted to a specific geographical area, the fund offers a well diversified play on the timber industry.

The fund also offers significant exposure to the emerging markets growth story, with holdings here varying between 25 per cent and 30 per cent of the overall portfolio. Most of the companies are in South America, which fund manager Gabriel Micheli says benefit from the lack of wood in other emerging markets like China and India, and from the growth in their end markets.

The long-only fund benefits from daily liquidity with the minimum investment just one share. The fund can be an attractive addition to your self-invested personal pension (it is available on the Hargreaves Lansdown platform), but because it is domiciled offshore, it cannot be held within an individual savings account.

Performance since inception has been promising, but it has a higher than average total expense ratio which may be partly justified by its specialist remit.

Mr Micheli joined Pictet Asset Management in 2006 and is an investment manager in the sector & theme funds team. He is a CFA charterholder and graduated with a degree in Economics from the University of St. Gallen.

PICTET TIMBER-P dy GBP
PRICE5,964.00p 1 YEAR PERFORMANCE-10.89%
SIZE OF FUND£129m6 MTHS PERFORMANCE-19.57%
No OF HOLDINGS53PERFORMANCE SINCE INCEPTION11.81%
SET UP DATE29-Sep-08TOTAL EXPENSE RATIO1.94%
MANAGER START DATE29-Sep-08MANAGEMENT FEE1.60%
BETA1.01MINIMUM INVESTMENT1 Share
VOLATILITY19.12%MORE DETAILSpictetfunds.co.uk

Source: Pictet Funds

Top 10 holdings as at July 2011

NamePercentage
Rayonier REIT6.20
Plum Creek Timber5.80
Empresas CMPC5.40
Weyerhaeuser5.30
Svenska Cellulosa5.10
Potlatch Corp4.60
UPM Kymmene4.50
MeadWestvaco3.70
Mondi3.70
Empresas Copec3.10

Geographic Breakdown

United States45.40
Brazil10.40
Chile9.00
Finland6.80
Sweden6.80
Canada5.10
South Africa4.30
Japan2.10
Others 7.40
Cash2.70