In another win for the company, overall Money Management/Lonsec Fund Manager of the Year Schroders Investment Management has taken out first place in the Global Equities (Broad Cap) category.
David Philpotts, senior member of Schroder’s quantitative equity products team (QEP), put the fund’s success down to the QEP’s decade-long experience running global equities strategies.
Philpotts said QEP’s more systematic approach to investing allowed it to invest in a very broad universe of assets, while they emphasised good portfolio construction and good diversification for the fund.
The equities team also decided to drop a cap-weighted approach to investment, Philpotts said.
“Why would you invest in Exxon [Mobil] if it’s a large part of the index? You should be investing where you find profitable opportunities,” he said.
“So we in effect threw away the index and started with a blank sheet of paper, and once we threw away the index in terms of cap weighting, it didn’t seem appropriate to then use it to define the funds universe [we invest in],” he said.
Lonsec took notice of the strategy as well, writing that the benchmark unaware, value based philosophy and wide market cap limits differentiate the product from the broader Lonsec sub group.
That approach also allowed them to choose from nearly 10 times as many stocks as the MSCI Index, Philpotts said.
“So the portfolio really taps into opportunities right across the size spectrum, so whereas an MSCI benchmark would have 90 plus of its allocation to mega and large cap stocks, we’re still investing in those companies and attractive mid-cap and small cap companies,” he said.
T. Rowe Price’s global research platform is one of the reasons the fund manager was listed as a finalist in the category this year, according to Murray Brewer, T. Rowe Price director of Australia and New Zealand.
“We’ve continued to hire and build out that platform all the way through the global financial crisis, so the stability and the investment into that research platform is the foundation of considering managers for their quality,” he said.
The fund manager for global equity fund, Rob Gensler, is one of the best portfolio managers in the context of a global equity bull market, Brewer said.
“What he is looking for is industries that have got attractive structures conducive to sustainable growth, and then companies in those industries that have got strong growth prospects, compelling business models, and management teams that have got a very clear vision of where they see their company in that industry,” he said.
Generation Investment Management, the second finalist in the category, has delivered more than 19 per cent returns to investors over the last 12 months.
It has done this by investing in high quality businesses with strong management teams that are able to demonstrate processes that will sustain profits even through a challenging environment.
