Rathbones Asset Management

A small, nimble team; one strategy. The lead fund manager believes that a small and nimble team that can make decisions quickly, rather than a committee approach, is optimal. This is the only strategy he manages, and the team will not change its investment process or style to follow the momentum of investor sentiment.

Businesses with a star quality. To be successful, businesses have to offer something that others can’t match. They must be easy to understand, different to their competitors, durable to change and difficult to imitate, with a plan to grow rapidly without running out of money or overstretching their resources.

A defensive bucket to reduce risk. To reduce risk, the fund holds a defensive bucket of companies with slow and steady growth that should be less sensitive to the economy.

Built without reference to a benchmark. The sub-fund is actively managed at the investment manager’s discretion without reference to any benchmark; portfolio construction is not influenced by index weightings.

A predominantly qualitative research process. Primary research and company contact are done internally, supported by a global network of external brokers and sell-side analysts. No quantitative screening is used to identify new ideas.

A core, all-weather emerging markets solution. A core equity strategy, unconstrained by style: a single, benchmark-aware solution for emerging markets covering all market caps, all markets and frontier-market exposure, with a risk-controlled approach diversified across all countries and sectors.

A long-tenured investment team. Managed by a long-tenured investment team that has worked together in emerging markets, having managed long, long/short and cross-asset strategies. Their experience is invaluable given the nuances of the asset class.

Two proprietary alpha drivers. Two proprietary alpha drivers using top-down and bottom-up methods, married together to create an alpha-repetitive equity strategy. The proprietary VMR (Value, Momentum, Risk) scorecard is an intra-asset-class indicator that aids timing, positioning, sizing and currency overlay.

A style-agnostic approach. Investing in high-quality companies at a discount, incorporating growth, value and yield, with proprietary top-down models allowing for the consideration of macro factors in allocation decisions.

Full ESG integration and engagement. Full ESG integration throughout the investment process, drawing on both proprietary internal and third-party research to identify risk and alpha opportunities, with corporate engagement to monitor and encourage improved sustainability practices.

Benchmark agnostic, high active share. The sub-fund is actively managed without reference to any benchmark. As a result of the benchmark-agnostic approach the strategy tends to have a high active share; the manager has significant freedom to deviate from the index.

A concentrated, high-conviction quality portfolio. Around 30 high-conviction holdings, with position size reflecting conviction and fair valuation incorporating a margin of safety. Companies are selected bottom-up for strong management teams, sound financial positions, good governance practices, a quality-growth and high-returns business model and constant innovation.

Risk as permanent loss of capital. Risk is assessed as the potential for permanent loss of capital. Alongside the focus on capital preservation, the manager seeks to minimise the portfolio’s absolute volatility and drawdown potential, with a long-term horizon of five to seven years.

Proprietary research, not reliant on the sell side. In-depth research at the industry, sector and company level, based on company engagement, site visits and primary data collection; sector materiality is assessed through a proprietary, customised business sustainability analysis rather than third-party ESG ratings, and governance structure is analysed in detail.