Investment

All our investment activities are managed within a single division and have a clear objective: to deliver performance which meets or exceeds our clients’ expectations. Our wide range of investment capabilities includes equities and fixed income, as well as alternative assets such as property, multi-asset products and funds of funds.

Equities

Equity investment is Schroders’ largest asset class, managing approximately £90 billion. While we have investment teams in twelve countries, more than half of our assets are managed in London. The floor is split primarily into geographic areas with some global sector analysts; however, everyone works closely to share ideas and research.

Stock selection lies at the heart of our investment process. We are long-term investors – establishing the fair value of a company’s shares takes the discipline to avoid being caught up in market fashions and the confidence to be contrarian when necessary. We focus on the ability of a business to generate sustainable value and earnings growth. We look at the quality, as well as quantity, of earnings potential and we meet company managers to ensure we fully understand their marketplace and business strategy.

Schroders strongly believes in independent research. As such, our analysts are given early responsibility and encouraged to provide different insights and angles for the fund managers. Due to Schroders’ size, analysts and fund managers have significant access to company management, and are able to meet chief executives to discuss their business in more detail.

Fixed income

We currently manage around £17 billion in fixed income assets, combining institutional, private client and retail funds. Our portfolio managers invest in all types of fixed income, including government bonds, investment grade corporates, high yield, mortgages, emerging markets and money markets. The portfolio managers are supported by a team of credit analysts who assess the credit ratings of investment propositions through company meetings and other sources of research.

We believe that we can exploit market inefficiencies through a diversified set of investment decisions over the long term. Again, fundamental analysis is key to this approach. We take frequent investment decisions across the widest possible range of uncorrelated opportunities, aiming to achieve outperformance from the different characteristics of fixed income product characteristics – such as duration, yield curve, and sector allocation.

Multi-asset

A multi-asset investment strategy allows clients to gain exposure to various sources of return, but within a framework that minimises the downside risk. This is mainly achieved through portfolio diversification and risk control.

The team is comprised of around 30 fund managers and analysts who spend time analysing various asset classes and looking at their return potential. Multi-asset is split into five broad areas:

• Asset allocation
  We assess what proportion of each asset class needs to be within the portfolio to achieve the clients’ required investment return needs.
  
  
• Multi-manager
  We cherry pick the best performing funds in the industry, which may or may not include Schroders funds.
  
  
• Liability driven investing
  We construct portfolios to provide a certain level of investment returns to the client which matches the liabilities they have to pass back to savers or shareholders. This strategy is commonly employed when managing pension funds, to ensure money is available to pay out at certain points in the future.
  
  
• Economists
  We research the macro-environment to identify current and future trends globally and at all stages of the economic cycle. These house views are then communicated internally and externally with comments on how each asset class (and therefore potential portfolio returns) will be affected.
  
  
• Structured products
  We take Schroders’ current product offering and design tailored, innovative investment solutions that meet our clients’ required investment returns.

Property

Our Property team represents an exciting alternative in Schroders’ product range and constitutes an important part of the Group’s strategy for expansion. We have 10 offices across the UK, Europe and Asia and manage in excess of £8 billion of gross property assets globally.

We offer over 20 different investment products which allow our clients to gain exposure to global property markets through a number of different channels. These include investing in property assets directly, through a fund of funds approach or via quoted property markets.