Investment Process

With many decades of investment experience, we have continually refined our investment process to unravel the complexity of world markets and achieve consistent performance in changing economic and market conditions. Our process is built on independent and in-depth research.

Selecting equities

Stock selection lies at the heart of our process. The greatest price inefficiencies lie at the stock level and an information advantage exists for the investor who researches the fundamentals.

We are long-term investors: establishing the fair value of a security 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 and we meet company managers and ensure that we fully understand their marketplace and business strategy. We believe that, over time, the mis-pricing of stocks versus fair value will be recognised by the market, and that our long-term approach to research will lead to long-term outperformance.

Selecting bonds

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 small and frequent investment decisions across the widest possible range of uncorrelated opportunities, aiming to extract a proportion of outperformance from duration, yield curve, sector allocation and security selection. This broadens the investible universe and is designed to deliver our clients an optimal combination of risk and return.

Asset allocation

Asset allocation recommendations are made by a team of our most senior investment professionals, representing each asset class. The Team considers the outlook for financial markets and sets load differences to a global balanced benchmark, which forms our ‘house view’.

Global research network

Schroders has a global network of experienced analysts, who identify the fair value of companies in a disciplined and all-encompassing way. Regular contact with company managers, enabled by the scale of our global network, is critical to this research.

The relationship between analysts and fund managers is one of partnership: strong interaction and open discussion among all our investment professionals is core to our process. Research is conducted in specialist teams, with clearly defined areas of expertise and accountability, but shared widely around the group to enable fund managers and analysts to compare markets and monitor industry trends. Analysts bring their local expertise to global sector teams, and we have developed a proprietary software tool – the Global Research Investment Database - to efficiently distribute in-house and external research to all investment professionals.