Global Emerging Markets Smaller Companies
Schroders Global Emerging Markets Smaller Companies strategy seeks long-term capital appreciation.
The strategy provides diversified exposure to the smaller companies of emerging markets. Smaller companies within the emerging markets universe are typically under-researched, under-owned and often characterized by strong growth potential.
The fund is co-managed by two experienced investment teams with a track record of delivering consistent outperformance; the Emerging Markets Equity (EME) team and the Global Small Cap & Specialist Asia team. Final portfolio construction is the responsibility of Tom Wilson and James Gotto in the EME team and Matthew Dobbs and Richard Sennitt from the Global Small Cap team.
We believe that emerging stock markets are inefficient and provide strong potential for adding value through active fund management. This is especially the case for generally under-researched smaller companies. We believe that applying a systematic, disciplined approach, with a strong team culture increases our ability to add value.
Alpha generation is primarily driven by bottom up, fundamental stock selection. Final portfolio construction is the responsibility of James Gotto (EME team Global Fund Manager) and Richard Sennitt (Global Small Cap & Asia Fund Manager) who will work closely with the relevant analysts to identify their highest conviction views. They will also draw on discussions with other Schroders professionals and their own judgment. The strategy follows a rigorous approach to risk management. There is no systematic style bias although low quality stocks will tend to be avoided.
The investment process starts with the identification of a focus list of potential investment ideas. This is achieved by a preliminary qualitative assessment of potential small cap investments, together with liquidity, size and quality screens. A key source of idea generation is the extensive global network of analysts and portfolio managers within the Emerging Markets Equity and the relevant members of the Global Small Cap teams which are based in eight locations around the world.
Comprehensive fundamental research is carried out in-house for all the stocks on the focus list. This includes company visits to ensure a thorough understanding of the potential opportunities and risks inherent in a company’s business. We seek to identify higher quality companies offering above average and/or relatively visible earnings growth. Smaller emerging market companies tend to be inefficient and under-researched and we believe fundamental bottom up research has the potential to generate significant alpha over time.
- The strategy targets alpha generation primarily from bottom-up fundamental stock selection.
- Idea generation is driven by a combination of factor screens and our global network of analysts and portfolio managers. Stocks on the focus list are assessed and selected after a thorough assessment of their fundamentals and business model.
- The strategy follows a proactive approach to risk management. There is no systematic style bias although low quality stocks will tend to be avoided. The portfolio will typically invest in around 60-120 stocks.
- Mutual Fund
- Separate Accounts