Here’s where Schroders sees the best opportunities
In its annual investment briefing released earlier this week, Schroders head of fixed income and multi-asset, Simon Doyle, cautioned that the current equity bull market is nearing its end.
“Global economic conditions are at an inflection point with the extreme levels of policy accommodation no longer sustainable,” Doyle said.
“Investors need to prepare their portfolios for more turbulence and the rising risk of material asset repricing.”
Regardless, co-head of Schroders global value team and manager of the Global Recovery Fund, Nick Kirrage, said there are still opportunities in the market at present, and they are often in places that nobody else is looking.
He says that Schroders’ approach, when compared to that of other Australian investors, is different.
“We believe that many of the greatest opportunities in the market today are simply in areas that other investors completely ignore,” Kirrage says.
“This leads us to running a strategy that is about as benchmark-unconstrained as a fund can get. Our fund currently does not hold healthcare or real estate and instead, we like financials as we believe many are lower risk than they have been pre-GFC, and stocks exposed to emerging markets.
“Ours is a high-conviction approach – the top 10 stocks make up 36 per cent of the fund and the top 20 make up 65 per cent of the fund. With this level of high conviction, one needs prudent diversification and a strong focus on risk.”
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