Schroder Australian Equity

Investment Objective

Aims to outperform the S&P/ASX 200 Accumulation Index over rolling three-to-five-year periods by investing in a broad range of companies from Australia and New Zealand.

Investment Approach

Schroders is a bottom-up, fundamental, active manager of Australian equities, with an emphasis on stocks that are able to grow shareholder value in the long term. The investment process focuses on the long-term quality of the business and the average returns achieved through a full business cycle, not the near-term earnings momentum. This long-term focus normally results in a relatively low momentum bias in either direction as the process is largely ambivalent to short-term earnings direction.
The portfolio seeks to provide economically diversified exposure to a range of listed businesses in Australia/New Zealand. The portfolio is structured on a relatively diversified basis rather than unduly concentrating. This is a necessarily subjective choice. The investment manager believes in structuring a portfolio which favours longer holding periods (lower portfolio turnover and better tax efficiency) and provides resilience against variability in macroeconomic conditions. Interest rates, inflation, indebtedness, government policy and a range of other variables impact businesses differently and are inherently difficult to forecast. Diversification across businesses with differing economic exposures offers protection against this variability.