Global Equities
It's time to rethink the global equity opportunityWhy go global?
Avoid geographic limitations to balance risk
US equities have long dominated the market, but focusing on a single market poses considerable risks. Regionally constrained managers are often forced to invest in “global themes” through “second-rate” businesses. The breadth of the universe of global equities provides exposure to worldwide-trends while also mitigating risk.
Respond to the valuation gap between the US and rest of the world
The valuation gap between US equities and the rest of the world is now at unprecedented levels. While US valuations appear stretched, the earnings and valuation opportunities are improving in other parts of the market.
Recognize global equities favor an active approach
Geopolitical and economic uncertainties demand a balanced and nimble approach to risk management. An active approach may capitalize on this potential by adapting to changing market conditions and interest rates.
Look beyond recent winners for return opportunities
The ongoing bull market has rendered US equities expensive, particularly the dominant 'Magnificent Seven' stocks, which may now present limited growth potential. Historically, peaking valuations have signaled a downturn. In contrast, smaller companies and markets outside the US could offer diversification and potential growth opportunities. We believe earnings will once again be the primary driver of stock valuations, and the beneficiaries will be companies that have growing, high-quality earnings.
Diversification is key in an uncertain geopolitical landscape
While geopolitical challenges have always been present, their frequency and scale have accelerated. A period of “higher for longer” interest rates will only add to the pressures equity markets face. In this environment, investors should start to shift their focus beyond US equities to mitigate both geopolitical and concentration risks.
Active management provides nimbleness in significant market shifts
Narrow market breadth and historically low volatility have typically favored passive, but active management may be poised to benefit in the new era. In today's complex environment, active managers can apply the selectivity and discernment that will be needed to identify investments that can both seize opportunities and mitigate risks. Further, those global managers with the flexibility to move across market capitalizations and apply any style – value, growth – can pursue the best opportunities, wherever they may be.
Explore our focus strategies
Why Schroders?
Our equities platform manages over US$300bn in assets*. Our 19 global equities portfolio managers and global equities sector specialists are backed by over 150 equity analysts worldwide. We specialize in decision-making under uncertainty, ensuring that portfolios are carefully balanced to manage risk effectively. Rather than focusing on short-term market sentiment, we employ intelligent portfolio construction based on innovative and forward-looking fundamental research to deliver the best outcomes for investors. *As of June 2024.
What makes our approach different?
Proven investment philosophy
We believe there is a strong positive relationship between earnings surprise and share price performance. Market participants consistently fail to correctly model companies delivering persistent long-term earnings growth. These observations are demonstrated through time, presenting a persistent source of alpha, if applied systematically. This holds true irrespective of the market environment.
Style-agnostic, blended, investment approach
A philosophy that stocks that deliver a positive surprise in revenues, cash flows and ultimately earnings are likely to perform well over time, irrespective of the market environment. This is an all-weather strategy, harnessing historical drivers of outperformance.
Proprietary fundamental risk framework
Our proprietary framework delivers a forward-looking and dynamic assessment of stock risk based on quantitative and qualitative aspects. This ensures we have a risk-adjusted return perspective when considering stock selection, as well as aiding stock position sizing in portfolios, which we believe contributes to improved downside protection and potential performance consistency.
"Our approach seeks to exploit market inefficiencies, by investing in companies with strong financial dynamics that are expected to positively surprise the market."
CIO Equities
Stay informed with personalized insights
Subscribe to our insights and stay informed with personalized emails on the topics that interest you, at your preferred frequency.
Past performance is no guarantee of future performance. The value of investments and the income from them can go down as well as up, and you (or your clients) might not get back what you originally invested.
For illustrative purposes only and does not constitute to any recommendations to invest in the above-mentioned security / sector / country.