HEAD-TO-HEAD: Miton versus Schroders

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Investment approach 

Both the Miton and Schroders funds invest in US equities. However, there are a number of differences between the two strategies, according to McDermott.

The Miton fund is a multi-cap strategy, while the Schroders fund is a mid-cap fund.

Source: Morningstar

In addition, the Miton product is more concentrated with around 35 stocks, while the Schroders fund is diversified with around 101 names. McDermott added that the Miton fund is benchmark agnostic and doesn’t have a benchmark index, while the Schroders fund has a benchmark – the Russell 2500 Index.

The types of companies that both products invest in are also different. The Miton fund has a growth tilt and has a bias towards companies with domestically-focused revenues. McDermott added that the invested companies are labelled high quality, meaning they are believed to have sustainable franchises or are leaders in their respective industries.

Meanwhile, the Schroders product is more valuation conscious. Between 50%-70% contains companies with mispriced growth.

“These companies are essentially growth-at-a-reasonable-price (GARP) stocks,” McDermott said.

The Schroders manager also invests in two other buckets. “Steady eddies”, or companies that have a balanced growth profile but are not broadly sensitive to a macro backdrop, make up 20%-50% of the portfolio, while turnaround companies with strong upside potential usually take up around 10%.

As a reflection of the strategies, both products have different companies in their top 10 holdings.

Top 10 holdings

Source: Fund factsheet

Sector allocations are also different, according to data from Morningstar Direct.

Sector allocation (%)

Source: Morningstar Direct

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