Mark Dampier: Schroders fund makes the world your shop window

The Analyst

Globalisation has changed many aspects of our lives including the way we consider investments. With companies increasingly competing on an international stage it is becoming less relevant where they are based, so setting geographical boundaries is not necessarily helpful to investors. Instead, a global perspective is now important to understand businesses and to discover where the best opportunities lie.

Similarly, investors focusing solely on the performance of a particular market index risk missing profitable underlying trends. For example, the US Dow Jones made virtually no ground between 1966 and 1982, but some firms prospered during this period and enjoyed strong share price gains. To capture these less visible trends we need to look for key structural changes that have a significant impact on companies' operations. Such changes are often long term and are frequently ignored by investors until they become more obvious, by which time it's too late because share prices have already risen.

A fund aiming to identify and capture these important changes is the new Schroder Global Alpha Plus, which has the freedom to shop around for the best 30 companies from all over the world. It would be wrong to think of this fund as simply a thematic investment though. It examines how wider trends and developments will affect companies, but the managers will also look for quality businesses, and only invest at an attractive price.

The fund's approach of a small number of "best ideas" does increase risk, but it also means every holding should have a big impact. So the fund certainly has the potential to deliver excellent long-term returns if the fund managers, Virginie Maisonneuve and Jonathan Armitage, make the right decisions. Together they have over 40 years' experience and an extensive knowledge of company management, having visited thousands of companies over their careers. Virginie is a French native and can speak not only fluent English but also Mandarin, quite an advantage when meeting Chinese businesses.

One important theme the managers consider is climate change. Whatever your personal views, it seems the increasing political consensus will have far-reaching consequences. Virginie Maisonneuve believes that to meet emissions targets $20 trillion worth of investment in energy infrastructure is required by 2030. The impact of this is poorly understood and will have considerable consequences for some companies, and create significant opportunities for others.

Tied in closely with this theme is the supply of essential resources, which are in increasing demand, particularly from emerging markets whose populations are rising. Globally, an estimated $32 trillion of investment is required by 2030 for energy, water, transport, and communications infrastructure. And it is not just growth in population to consider. Many nations are experiencing an ageing society. For instance, it is estimated that the world will have twice as many over 65s by 2020, which will have an impact on many areas, such as healthcare spending. In 2012 the first baby boomers start to retire in the UK, which will put huge constraints on the health system. Despite the rhetoric in this election campaign, I doubt the NHS budget will be sacrosanct for any party. The promises the politicians have made simply do not add up. Demographics are a classic slow burn trend with enormous implications for economic growth as well as patterns of consumer spending.

By considering the impact of each of these factors, the managers will look to construct a portfolio well placed to adapt from the changing economic landscape. One example is British Gas, a company that stands to benefit from more than one of these themes. Increasing demand for energy means that gas should become a more valuable commodity, plus it has lower carbon intensity compared to other fossil fuels so is considered a "cleaner" source of energy. Ultimately, these factors should translate into growing demand and increased profits.

In my view this is a fascinating forward-looking fund from an experienced fund management team. There are genuinely long term structural changes likely to affect investments for the next 20 years or more, so perhaps this is an ideal fund to have in your pension plan as a really long-term holding.

Mark Dampier is head of research at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more details about the funds included in this column, visit www.h-l.co.uk/independent

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Suggested Topics
News
peopleJonathan Ross has got a left-field suggestion to replace Clarkson
News
Andy Davidhazy at the beginning (left) and end (right) of his hike
video
Arts and Entertainment
The teaser trailer has provoked more questions than answers
filmBut what is Bond's 'secret' that Moneypenny is talking about?
News
Johnny Depp is perhaps best known for his role as Jack Sparrow in Pirates of the Caribbean
peopleBut how did he break it?
Sport
Lewis Hamilton secured his second straight pole of the season
f1Vettel beats Rosberg into third after thunderstorm delays qualifying
Arts and Entertainment
Written protest: Julia Donaldson, author of The Gruffalo, has sent an open letter to the Culture Secretary
books
Travel
travel Dreamland Margate, Britain’s oldest amusement park, is set to reopen
News
news
News
Founders James Brown and Tim Southwell with a mock-up of the first ever ‘Loaded’ magazine in 1994
media
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Retirement Coordinator - Financial Services

    Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

    Recruitment Genius: Annuities / Pensions Administrator

    Negotiable: Recruitment Genius: You will be the first point of contact for all...

    Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

    £18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

    Ashdown Group: Learning and Development Programme Manager

    £35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

    Day In a Page

    The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

    The saffron censorship that governs India

    Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
    Prince Charles' 'black spider' letters to be published 'within weeks'

    Prince Charles' 'black spider' letters to be published 'within weeks'

    Supreme Court rules Dominic Grieve's ministerial veto was invalid
    Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

    How did fandom get so dark?

    Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
    The galaxy collisions that shed light on unseen parallel Universe

    The cosmic collisions that have shed light on unseen parallel Universe

    Dark matter study gives scientists insight into mystery of space
    The Swedes are adding a gender-neutral pronoun to their dictionary

    Swedes introduce gender-neutral pronoun

    Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
    Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

    Disney's mega money-making formula

    'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
    Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

    Lobster has gone mainstream

    Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
    Easter 2015: 14 best decorations

    14 best Easter decorations

    Get into the Easter spirit with our pick of accessories, ornaments and tableware
    Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

    Paul Scholes column

    Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
    Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

    The future of GM

    The greenhouses where Monsanto 'plays God' with the future of the planet
    Britain's mild winters could be numbered: why global warming is leaving UK chillier

    Britain's mild winters could be numbered

    Gulf Stream is slowing down faster than ever, scientists say
    Government gives £250,000 to Independent appeal

    Government gives £250,000 to Independent appeal

    Donation brings total raised by Homeless Veterans campaign to at least £1.25m
    Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

    The most borrowed book at Bank of England library? Oh dear

    The book's fifth edition is used for Edexcel exams
    Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

    Cowslips vs honeysuckle

    It's the hunt for UK’s favourite wildflower
    Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

    Did a botched blackmail attempt help Cyril Smith escape justice?

    A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss