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; request a free guide on NISAs from Hargreaves Lansdown

Suggested Topics
Arts and Entertainment
books
News
Dr Alice Roberts in front of a
people
Voices
Nigel Farage arrives for a hustings event at The Oddfellows Hall in Ramsgate on Tuesday
voicesA defection that shows who has the most to fear from the rise of Ukip
Arts and Entertainment
The Doctor and the Dalek meet
tvReview: Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
PROMOTED VIDEO
Sport
Diego Costa
footballEverton 3 Chelsea 6: Diego Costa double has manager purring
Arts and Entertainment
The 'three chords and the truth gal' performing at the Cornbury Music Festival, Oxford, earlier this summer
music... so how did she become country music's hottest new star?
Life and Style
The spy mistress-general: A lecturer in nutritional therapy in her modern life, Heather Rosa favours a Byzantine look topped off with a squid and a schooner
fashionEurope's biggest steampunk convention heads to Lincoln
Voices
Caustic she may be, but Joan Rivers is a feminist hero, whether she likes it or not
voicesShe's an inspiration, whether she likes it or not, says Ellen E Jones
News
i100
Arts and Entertainment
Star turns: Montacute House
tv
News
i100Steve Carell selling chicken, Tina Fey selling saving accounts and Steve Colbert selling, um...
Arts and Entertainment
Unsettling perspective: Iraq gave Turner a subject and a voice (stock photo)
booksBrian Turner's new book goes back to the bloody battles he fought in Iraq
News
i100
Arts and Entertainment
Some of the key words and phrases to remember
booksA user's guide to weasel words
Life and Style
Brave step: A live collection from Alexander McQueen whose internet show crashed because of high demand
fashionAs the collections start, Alexander Fury finds video and the internet are proving more attractive
Finacial products from our partners
Property search
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

    Law Costs

    Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...

    Network Engineer (CCNP, CCNA, Linux, OSPF, BGP, Multicast, WAN)

    £35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...

    DevOps Engineer (Systems Administration, Linux, Shell, Bash)

    £50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...

    Data Scientist (SQL, PHP, RSPSS, CPLEX, SARS, AI) - London

    £60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...

    Day In a Page

    The other Mugabe who is lining up for the Zimbabwean presidency

    The other Mugabe who is lining up for the Zimbabwean presidency

    Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
    The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

    The model for a gadget launch

    Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
    Alice Roberts: She's done pretty well, for a boffin without a beard

    She's done pretty well, for a boffin without a beard

    Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
    Get well soon, Joan Rivers - an inspiration, whether she likes it or not

    Get well soon, Joan Rivers

    She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
    Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

    A fresh take on an old foe

    Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
    Fashion walks away from the celebrity runway show

    Fashion walks away from the celebrity runway show

    As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
    Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

    Meet the stars of TV's Wolf Hall...

    ... and it's not the cast of the Tudor trilogy
    Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

    Europe's biggest steampunk convention

    Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
    Don't swallow the tripe – a user's guide to weasel words

    Don't swallow the tripe – a user's guide to weasel words

    Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
    Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

    Daddy, who was Richard Attenborough?

    The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor
    She's dark, sarcastic, and bashes life in Nowheresville ... so how did Kacey Musgraves become country music's hottest new star?

    Kacey Musgraves: Nashville's hottest new star

    The singer has two Grammys for her first album under her belt and her celebrity fans include Willie Nelson, Ryan Adams and Katy Perry
    American soldier-poet Brian Turner reveals the enduring turmoil that inspired his memoir

    Soldier-poet Brian Turner on his new memoir

    James Kidd meets the prize-winning writer, whose new memoir takes him back to the bloody battles he fought in Iraq
    Aston Villa vs Hull match preview: Villa were not surprised that Ron Vlaar was a World Cup star

    Villa were not surprised that Vlaar was a World Cup star

    Andi Weimann reveals just how good his Dutch teammate really is
    Bill Granger recipes: Our chef ekes out his holiday in Italy with divine, simple salads

    Bill Granger's simple Italian salads

    Our chef presents his own version of Italian dishes, taking in the flavours and produce that inspired him while he was in the country
    The Last Word: Tumbleweed through deserted stands and suites at Wembley

    The Last Word: Tumbleweed through deserted stands and suites at Wembley

    If supporters begin to close bank accounts, switch broadband suppliers or shun satellite sales, their voices will be heard. It’s time for revolution