Seema Shah

📢 Schroders’ latest multi-asset investment views for September 2024 are out. The Multi-Asset Team continues to maintain a positive outlook on #equities, driven by robust underlying fundamentals. Read more: https://okt.to/xpePQy #MultiAsset #Equities #MarketViews

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📢 Schroders’ latest multi-asset investment views for September 2024 are out. The Multi-Asset Team continues to maintain a positive outlook on #equities, driven by robust underlying fundamentals. https://okt.to/cySrtP #MultiAsset #Equities #MarketViews

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It was great to see Portfolio Manager, Helen Mason and Kellie Wood, Head of #FixedIncome featured in the Financial Standard recently (https://okt.to/H7V5Sd). In the article, they discuss the forces at play in the Australian credit universe and the launch of the Schroder Australian High Yielding Credit Fund. If you would like to find out more about the Fund, please register for our upcoming webinar: https://okt.to/gdzGDm #Investing #Insights #Schroders #Credit

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In our latest LDI Alert, Amy Trainor explains why US corporate DB plans may have a rare and limited opportunity to derisk and offers suggested action steps. #LDI #CorporateDB #pensions Learn more: https://lnkd.in/g36ftgGt

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Closet Benchmarking Among UK Equity Funds? In the ever-evolving landscape of UK equity funds, it’s important to identify which funds are truly active versus those more aligned with the benchmark. Our latest research, visualized in the scatter chart below, sheds light on where funds fall on this spectrum, with the X-axis showing stock active share and the Y-axis displaying a blend of country and industry-level active share, compared to the FTSE All Share index. We observe a wide spread of results, showing the diversity in fund strategies, from highly independent stock-pickers to those with a more benchmark-aligned approach. We highlight 4 funds with the greatest independence from the benchmark: • Lindsell Train UK Equity • Finsbury Growth & Income Trust • Aviva UK Listed Equity • Castlebay UK Equity What do they have in common? Low to zero allocations to sectors like Energy, Health Care, and Materials - proving their differentiated approach from the FTSE All Share index. However, it's crucial to note that while 'closet benchmarking' can suggest a lack of transparency, that might not be the case here. Many of the funds with lower active shares fall into specific categories, such as ‘tilt,’ ‘enhanced index,’ or ‘beta plus’. These approaches are deliberate and part of a well-defined fund strategy to remain aligned to benchmark indices. In terms of performance, the inset chart shows that high active share funds have outperformed their lower active share peers over time. Since April 2012, high active share funds have returned 164% on average, compared to 131.6% for low active share, 126.2% for medium active share, and 134.5% for the benchmark FTSE All Share ETF. What do you think about active investing with benchmark constraints? Is true independence from the benchmark the key to success, or do defined strategies with low active share still have a place in the market? #UKEquity #ActiveManagement #FundResearch #Investing #PortfolioManagement #assetmanagement #stocks

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A great flow chart from the UK Investment Association for those who want to understand which fund share class to select as 'primary'. In contrast to how some data providers default to the oldest, legacy share class, it seems very clear that one should perhaps choose a share class that is 'unbundled', and 'freely available to all investors... '. For the Marlborough Multi Cap Income Fund, this is the 'P' share class! This also covers c.99% of all fund units in issue so most representative of the returns delivered to the wider investor base.

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This chart is important. Capital at risk. It shows the average rolling five-year performance relative to the index for all of Baillie Gifford’s UK-domiciled equity fund range. It illustrates that our funds have collectively outperformed over five-year periods for the vast majority of the time. For the 30-year available history, outperformance over five years has averaged +1.9% per annum (pa). The current situation is that having peaked at +9.8% pa in January 2021, the very sharp sell-off in growth equities has resulted in an underperformance of -1.9% pa for our equity fund range as a whole in the five years to the end of March 2024. We have seen such periods from January 1995 to June 1997 and September 2008 to November 2009. In both cases, strong performance recoveries followed over the next five years. There can be no guarantee that this will happen again, but we hope it will be informative for investors to see the long-term pattern of relative fund performance resulting from our investment style. It comes from this article by James Budden: https://lnkd.in/eXkRwCWw #LongTermInvesting #Cyclicality #Patience #TheLongView #ActualInvestors

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Joseph Wilkins and I recently spoke about 'factor tilted' or 'research enhanced' active ETFs that are blending active and passive styles. It was great to discuss our approach within the JM Finn multi-asset funds where we hold a similar philosophy but take a more targeted approach. In parts of the portfolio where opportunity for active outperformance exists (high market dispersion and low market efficiency) we seek to take advantage of it through active management. Where active outperformance has proven more challenging (low market dispersion or high market efficiency) we seek to gain beta exposure through a more passive approach. You can read more about this in Joe's recent Financial Times article, 'Do portfolio managers really want active ETFs?' https://lnkd.in/ePkuQHFa

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In the Strategy Snapshot this week, Daniel Cassidy and I break down the drivers behind the market volatility, explain our current investment outlook, and share guidance for positioning during these volatile conditions. Listen to the podcast for all the details. #shareubs https://lnkd.in/e6tdDHdA

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Please take a moment to read my latest blog considering an optimal portfolio construction in a new dynamic equity-bond correlation regime: https://lnkd.in/eh-7HmFN

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Please see CIFC’s latest edition of Portfolio Intelligence

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In the Strategy Snapshot this week, Daniel Cassidy and I review May market performance drivers. We then discuss what investors should be mindful of throughout the month of June, and into the summer. We also take the pulse of current investor consensus, and review our current allocation recommendations. Listen to the podcast for all the details. #shareubs https://lnkd.in/ektwe-6A  

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LGIM co-leads the Glasgow Financial Alliance for Net Zero (GFANZ) Index Investing workstream (with SGX Group and PKA); in this LGIM Blog post we summarise key points. The workstream is looking at producing voluntary guidance on how index investing can support real-economy decarbonisation. One important aspect is how investors can incorporate "transition-potential" companies/issuers in such indices, at least initially. The role of engagement, and the need for accessible, standardised, quality data, are important areas for discussion. The GFANZ paper and link to the consultation can be found here: https://lnkd.in/eZZ8T56m #climatechange #climatecrisis #netzero #responsibleinvesting #decarbonization #energytransition #sustainability

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Great to be part of this team and see how much progress has been made over the last 5 years in developing the impact framework and the publishing of this report. #impactinvesting

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Some thoughts on active strategies in the Core space - and a study on manager performance you may find helpful. https://lnkd.in/eZ4byPa6

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Natural capital research 📋 A new report highlights the growing appetite for #naturalcapital investments in institutional portfolios, with half of UK asset owners saying they already invest in natural capital or will do so within the next 18 months. Key findings include: 🌱 50% of UK asset owners are either already investing in natural capital or will do so within the next 18 months 🌧️ 73% of UK asset owners would invest in natural capital to support climate adaptation 📈 59% would allocate up to 3% of assets to natural capital The research, commissioned by Gresham House and carried out by the research division of @mallowstreet, a community for the #institutionalinvestment industry, shows strong backing for the asset class, as investors become increasingly aware of natural capital’s potential to deliver resilient, impactful returns. #forestry #sustainableagriculture #biodiversity https://lnkd.in/enxn9Mqb Ally (Albena) Georgieva Stuart Breyer

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We’re thrilled to share that the IFSL Blackfinch NextGen Infrastructure Fund has been recognised in Morningstar's latest report for August 2024. It ranked as the #1 best performing equity infrastructure fund and overall, the 5th best-performing fund in the UK out of 3,039 funds across all asset classes. Thank you to both Blackfinch Group and Marlborough teams for their ongoing support. At Blackfinch, we are choosing to do something different than our infrastructure sector peers, so there is no reason to expect results that align with the indices. At times we may underperform, and at times we may outperform, but at all times we will do our best to think and act independently. Over longer periods, we believe we will be rewarded for taking an unconventional approach to infrastructure investing and separating ourselves from the herd. We continue to believe that the companies we hold (such as the publicly disclosed positions GFL Environmental Inc., Clean Harbors, Grenergy Renovables, TransAlta, Macquarie Technology Group, Rai Way S.p.A., American Healthcare REIT) have better business models, more properly incentivised management partners, and greater future earnings potential than the average infrastructure company. Our strategy centres on buying high quality specialist infrastructure companies prioritising capital appreciation over income, supported by ‘next generation’ growth themes – such as the energy transition, digitalisation and sustainable urbanisation – that are trading at reasonable valuations and led by well-incentivised management teams. If our analysis is sound, with time we should benefit from the dual forces of improving business fundamentals and improving sentiment, which could help the fund achieve its return objective. Disclaimer: Capital at risk. Past performance not indicative of future results. This post does not constitute any form of solicitation to buy or sell units in the fund or the companies mentioned. For UK investors only. 

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In the Strategy Snapshot this week, Daniel Cassidy and I discuss how geopolitics, growth and inflation data that are exceeding expectations, and higher rates are impacting the outlook. We cover CIO's updated views on Fed rate cuts and what could cause the Fed to alter its course. Finally, we review the investment implications of all these factors and what investors should be doing in their portfolios. Listen to the podcast for all the details. #shareubs   https://lnkd.in/eetxAwS7

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