Pictet Strategic Income Fund Assets Reach $5.1B Following China Inflows

The Pictet Strategic Income Fund has seen its assets under management (AUM) grow to $5.1 billion from $1.6 billion at the start of 2026. This increase follows mainland Chinese investors using the Mutual Recognition of Funds (MRF) scheme to access international markets.

Approximately 60% of the Hong Kong-domiciled fund's current AUM comes from mainland Chinese retail investors. This influx follows regulatory scrutiny in Beijing regarding unlicensed offshore accounts, which has directed domestic capital toward authorized, cross-border investment channels.

"Deposit yield at home has been coming down, while the AI sector has been performing quite well since the launch of ChatGPT, and you have this growth feature emerging globally," said Freeman Tsang, head of intermediaries for Asia ex-Japan at Pictet Asset Management.

How the MRF Scheme Functions

The Mutual Recognition of Funds (MRF) scheme is a regulated cross-border channel that permits qualified Hong Kong-domiciled funds to be marketed and sold directly to retail investors within mainland China. By operating through this framework, Pictet provides a legal avenue for Chinese capital to diversify into global assets. This shift has become more pronounced as domestic interest rates have declined.

Portfolio Composition and Strategy

The fund employs a multi-asset strategy. Its top 10 holdings currently include U.S. Treasuries, gold, and major U.S. technology companies such as Amazon, Alphabet, and Nvidia. This allocation reflects a trend among Chinese retail investors who are seeking exposure to global growth sectors and safe-haven assets.

As Beijing continues to tighten its oversight of private capital flight, the reliance on formal mechanisms like the MRF shows how Chinese wealth management is changing. For investors, the ability to access international equities and fixed-income products through authorized channels is a primary method for mitigating the risks associated with domestic yield compression.