Equities

Global equity portfolio managers have a very large universe of investments to choose from, which means it is vital to have an investment team with the background to identify opportunities with the most growth potential. We have decades of experience investing for clients across different sectors, geographies, and economic climates, and we can offer diversification via a range of strategies. 

Investing in companies with high revenue growth and sustainable profit margins has been recognised as one of the main sources of shareholder returns over the long run. These characteristics are supported by companies’ exposure to several long-term themes influencing the global economy. 

For more than 50 years, investors have identified and classified the common characteristics of companies that have delivered an identifiable and repeatable pattern of return – this is the essence of ‘factor investing’. Our multi-factor strategy blends proprietary quality, value, and momentum factors. 

Multi-factor investing seeks to smooth the volatility of return that may come from any one individual factor and provides exposure to an array of fundamental insights that are rewarded at different stages of the economic cycle.  

Why small cap / mid cap? 

Investing in smaller companies can be attractive for several reasons. This includes the potential of being nimble and agile enough to quickly position themselves to benefit from new trends without legacy infrastructure issues, and typically having greater exposure to their domestic economies. While the definition of ‘small’ varies from market to market, they tend to account for the bottom 25% of companies in a market or region by market capitalisation. They also tend to be less well covered by analysts so may be overlooked by other investors.  

Smaller companies have potential and can be more dynamic than their larger counterparts. They can have a lesser impact from the global macroeconomic events that affect larger multi-national businesses, so may offer diversification benefits for investors. They can also be higher risk – as smaller companies can be more vulnerable to shocks. 

Our strategy 

We have more than three decades of experience investing in small and mid-cap stocks. Our range of strategies offer investors exposure to global markets, including Europe, the UK and the US.    

Thematic investing – also called trend investing or mega-trend investing – is a broad term used to describe investment approaches which focus on certain economic, corporate, social or technological themes. 

In today’s highly disruptive world, these approaches are typically focussed around the two main drivers of long-term corporate behaviour – demographic shifts and technological changes.  

We provide strategies for thematic and sector investing that address the key themes that we believe will offer the best opportunities for long-term structural growth for equity investors. 

Why evolving trends? 

Evolving trends is about identifying companies and sectors that are tapping into multi-decade demographic and technological changes, regardless of their region or sector. 

The way that companies do business has changed dramatically over the last 20 years. However, the way that many investors approach equities has remained the same. These days, companies are increasingly global and multi-sector in their approach. 

We believe that the evolving economy gives investors access to potentially attractive opportunities with long-term structural growth, regardless of how companies are defined geographically or from a sector perspective. 

Our strategy 

Our evolving trends strategy offers investors a single point of access to high-quality companies benefiting from one or more of the five major growth themes within the evolving economy: ageing and lifestyle, connected consumer, automation, Clean Tech, and transitioning societies.  

Why ageing and lifestyle? 

As life expectancies rise across the globe, the way people live is rapidly changing. 

Many companies are having to rapidly adapt to the needs of this large and expanding demographic, with retiring and elderly generations representing a growing proportion of consumption growth.

Living longer also naturally incurs higher healthcare costs, with personal healthcare spending in developed markets expected to rise significantly with age.   

Our strategy 

We invest in companies operating across four areas associated with the financial implications of the longevity economy:  

• Wellness: Improving the length of peoples’ healthy lifespans by modifying unhealthy behaviours with more active and healthier lifestyles; aiming to prevent diseases through vaccinations; digital diagnostics; screening and monitoring. 
• Silver spending: The discretionary spend related to the ‘over 60s’ population represents a huge opportunity for businesses. This is especially significant considering an increasing spend on areas unrelated to healthcare. 
• Senior care: Focusing on the needs of an expanding senior population and supporting the increasing dependency of those aged 80 and over.  
• Treatment: Treating medical conditions that are caused by lifestyle factors or that primarily affect the over 60s; chronic conditions such as diabetes, heart disease, cancer, dementia and arthritis; and mobility conditions like joint replacement therapies. 

Why connected consumer? 

Widespread internet access means today's consumer is in a better position to make informed purchases – anytime, anywhere, on any platform.  
 
Smartphones have given people unprecedented access and choice when it comes to shopping. Digitally savvy companies now offer a broader selection of goods, faster delivery, secure payments, and 24/7 mobile access. Keeping pace with technological advancements should enable companies to engage their customers more deeply in an increasingly digital economy. 

Our strategy 

To help investors tap into multi-decade opportunities across the entire e-commerce value chain, our Digital Economy strategy focuses on the 4 Ds: 

• Discovery: Search engines, online advertising and social media are increasingly becoming the starting point when searching for and/or discovering products and services online. 
• Decisions: E-commerce, web portals and mobile apps provide consumers with convenient and reliable product choices. Companies involved in the decision-making process are dominated by online disruptive firms taking market share from traditional businesses. 
• Delivery: The proliferation of e-commerce has led to rapid growth within digital payments, and is also pushing companies to look for supply chain efficiencies to deliver goods everywhere within a specified timeframe – also known as ‘same-day’ or ‘next-day’ delivery. 
• Data & enablers: Such firms help not only companies that are digital natives, but also digital migrants who need to transform themselves to remain relevant. 

Why automation? 

Automation began life on the factory floor, but it's evolved to influence multiple aspects of how we live and work.  

While we're still in the early stages of this disruptive trend, the long-term potential of automation and robotics is becoming clear to a growing number of equity investors.  

Our strategy 

Our Robotech strategy focuses on four areas: 

• Industrial automation: Technological developments are helping to improve industrial processes outside of automotive, such as food processing, electronic products, logistics and general manufacturing. 
• Transportation: Driver-assist and autonomous vehicles, and enhanced vehicle safety, are creating opportunities for suppliers of automotive content.  
• Healthcare: Focused on the transition from traditional methods to advanced healthcare applications in the areas of robotic surgery and remote healthcare. 
• Technology enablers: The intelligent systems – sensors, software and semiconductors – that can help optimise and monitor automated applications. 

Why Clean Technology? 

Clean Technology – or clean tech - refers to companies whose products and services improve resource sustainability, support the energy transition (from fossil-based to zero-carbon energy production and storage), or address the issue of water scarcity.

The 2010s was the worst decade on record for economic losses from natural disasters, underscoring the urgency to manage carbon emissions and limit global warming⁴ . Awareness of the impact of pollution is being increasingly driven by governments, with strong regulatory support across Europe, the US and China. As concerns over the sustainability of human civilisation on earth deepen, consumers are demanding more of companies and governments.  

Our strategy 

Our Clean Economy strategy focuses on companies operating across four key areas which are providing innovative solutions to the energy transition and the finite amount of natural resources: 

• Low carbon transport: Innovation in battery technology and the electric powertrain market are driving the development of the electric vehicles market. 
• Smart energy: The increasing use of new innovative solutions such as static energy storage, smart grid and better building insulation, combined with a more attractive cost of renewable energy, are directly supporting the energy transition.  
• Agriculture & food industry: Agricultural technology solutions, and lab-grown or plant-based meat could support better use of land and limit the carbon emissions produced by the industry – as could solutions that reduce food waste.  
• Natural resource preservation: Businesses are increasingly developing technologies and creating solutions that improve recycling and reusing practices, as well as managing water supply and quality.  

Why transitioning societies? 

Transitioning societies represent the change in consumption patterns across frontier, emerging and developed markets.  

A major wealth shift is occurring over the next decade, as three billion people are forecast to move from poverty into the middle class by 2030⁵ . As a result, consumption patterns over time could likely transition from fulfilling basic needs to more aspirational purchases.  

Our strategy 

Our All China and Emerging Markets strategies look to invest in companies that broadly fit into one or more of the five major growth themes: ageing and lifestyle, connected consumer, automation, clean tech, and transitioning societies.  

We offer investors strategies designed with the purpose of supporting the transition to a more sustainable economy where investment decisions are guided by either environmental, social and governance (ESG) themes, or driven by a measurable/positive impact.

Why sustainable investing? 

Sustainable strategies are those where investment decisions are guided by ESG themes. They aim to promote environmental sustainability and minimise the negative impact of issues such as climate change, while also delivering financial returns. 

Companies are having to adapt to their customers’ higher expectations around sustainable practices, which is backed by governmental and regulatory support to incorporate sustainability measures into company information. We believe ESG factors are material to investment performance and a potential risk factor for issuers.

Our strategy 

Our Sustainable Europe, Eurozone and UK strategies comprise actively managed large-cap equities with a specific focus on climate change and/or robust companies’ ESG profiles. This is achieved through our responsible investment filter, proprietary ESG analysis and active engagement and voting.

Our Sustainable Equity QI strategy follows a factor-based investment approach – focused on low volatility and high quality factors – while actively investing in a sustainable way.

Invest in a specific geography, whether that's a continent like Europe, a region like emerging markets, or even a single country like the US or Japan. 

Our teams use local market and regional expertise to explore investment opportunities all over the world. From the biggest global economy and largest equity market in the US, to exciting opportunities in Europe, the UK, and future economic powerhouses in Asia and emerging markets. 

Why US equities? 

US equities can provide investors with exposure to some of the most internationally recognisable companies.    

The US stock market is one of the largest in the world, comprising both a continuous stream of new and disruptive companies as well as world-leading innovative companies in sectors such as technology, entertainment and healthcare. The US not only has the world’s largest consumer market, it also leads the way on research and development spending.   

Our strategy 

We offer a range of strategies with different risk and return profiles for investors seeking exposure to this dynamic equity market.  

Our quantitative strategies seek diversified exposure to companies that may be undervalued, have high earnings quality or superior earnings growth prospects 

Why EM / Asian equities? 

Emerging markets and Asian equities can offer investors access to companies in the world’s fastest-growing economies.   
 
Accounting for a significant proportion of the global population emerging markets may be bigger than developed markets over the long term.  Emerging markets offer investors access to many world-leading technology companies, as well those best-placed to access rapidly changes patterns of consumer spending.    

While these regions are developing rapidly and the pool of potential investment opportunities widens further, the markets remain deep.  

Our strategy 

We take a multi-cap approach to emerging markets and Asia, offering investors the chance to gain exposure to a diverse range of markets. This comprises of the potential of being involved in Chinese A-shares (the stock shares of mainland China-based companies) that trade on the main Chinese stock exchanges: the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE).