The fund will target returns of 7 per cent a year above the MSCI World index and will be managed by Schroders’ head of global & international equities Virginie Maisonneuve and head of US equities, Jonathan Armitage. Maisonneuve joined Schroders in 2004 from Clay Finlay in New York. She has managed equities for over 23 years, while Armitage has 18 years investment experience. They already run the offshore Schroder International Selection Fund global equity alpha fund.
The managers will look for attractively priced quality growth stocks that have sustainable competitive advantages over their competitors using bottom-up research. This will be combined with a focus on three themes – climate change, demographics and the growing significance of emerging market countries in the world economy. Schroders thinks these will impact on the environment that companies operate in and affect their sustainability of earnings. It believes the thematic approach will take into account growth trends that are often underestimated when using a pure bottom-up approach.
Schroders says share prices can either reflect over-optimism or over-pessimism as some investors react to daily news. In contrast, Maisonneuve and Armitage will take a long-term view, focusing on stocks they think have future growth potential that the market has not yet recognised.
Sarasin and BNY Mellon/Newton apply a thematic approach to global equities but their portfolios are less concentrated than the Schroders fund. The advantage of concentration is that every stock counts, with no room for average stocks that could dilute performance. However, this also increases risk relative to funds that contain more stocks.