Schroders unveils multi-thematic fund in Hong Kong
The Schroder Global Multi-Asset Thematic Fund was launched on Friday and invests in growth sectors around the world, with a multi-asset portfolio to manage risk and generate income.
“The strategy is different from others by being both multi-thematic and multi-asset,” Patrick Brenner, head of multi-asset investments, Schroders, told our sister publication Fund Selector Asia.
The fund is domiciled in Hong Kong in order to help capture investors in the Greater Bay Area as the economic bloc further integrates, and to tap demand through the evolving Wealth Connection program linking the Mainland China and Hong Kong.
It is managed by the deputy director of multi-asset investments of Brenner and Schroders in Asia, Keiko Kondo.
Three main themes identified by Brenner shape the construction of the portfolio: innovative transformation, cities and lifestyle, and environment and sustainability.
First, “innovative technologies and social changes are reshaping our way of life and have introduced immense investment opportunities for investors,” he said.
He cited e-commerce as an example, noting that online sales volume has grown by more than 20% for five consecutive years in China, and that the widespread adoption of 5G will accelerate the development of the Internet of Things, creating a new ecosystem and providing dynamic growth to several sectors.
“For some companies, such disruptive changes have resulted in exceptional growth in revenues and profitability, thereby gaining more investor attention,” he said.
Second, “ordering food and groceries online has become a habit for many households, and the increase in sales volume has stimulated demand in various sectors along the supply chain, such as as payments, warehousing, logistics and transportation, ”said Brenner.
Finally, “after the adoption of the“ Paris Agreement ”at the United Nations Climate Change Conference in 2015, countries around the world have implemented measures to reduce greenhouse gas emissions. », Which stimulates industries such as electric vehicles.
A With all Schroders funds, “ESG is built into the investment process, and it’s one of the fund’s three themes, but it’s not an ESG fund,” Brenner said.
Portfolio allocation is determined by bottom-up analysis using the company’s global equity and fixed income teams to generate alpha. There is no benchmark, but the MSCI ACWI and the Barclays Bloomberg Global Aggregate are used as benchmarks.
The portfolio is made up of 50% equities, 40% bonds, 5% commodities, 5% cash. The equity portfolio is made up of 40% city and lifestyle stocks, 20% environmental stocks and 20% innovation stocks; 60% is allocated to the United States, 6% to Japan, 5% to South Korea and Taiwan, 4% to China and 3% to the United Kingdom.
“There is a trend towards growth, but the style is tempered by economic and business cycles,” said Brenner, “The fund will manage the current market preference for value sectors, through complementary tactical trades, such as financial allowances.
“However, by its very nature, the DNA of the strategy is geared towards growth, and it will never have a bent for value.”
The fixed income round is made up of investment grade government and credit bonds for “portfolio stability, but going forward it will target thematic credit,” Brenner added.
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