HEAD-TO-HEAD: Ninety One versus Schroders

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INVESTMENT PROCESS

The Ninety One and Schroders funds both look at the Asia (ex-Japan) investment universe. While both funds have a bottom-up approach to investing, they employ different processes, according to Poole.

The Ninety One fund is a quantitative-based product, while the Schroders fund is a traditional quality growth fund.

The Ninety One Asian Equity offering makes use of the “4Factor” model, which has been used for “a very long time” by the fund’s team, according to Poole. The factors in the model include value, quality/strategy, earnings momentum and share momentum.

The stocks are screened on a weekly basis, with each factor graded 1 to 4, with 4 being the highest.

While the fund makes use of a quant model, there is a qualitative overlay added to the investment process, Poole noted. The overlay includes various aspects of a company, such as management quality and competitive advantages.

The fund also has a “clear integration” of ESG factors into the fund’s investment process, he added.

Turning to Schroder ISF Asian Opportunities Fund, Poole said that its investment team identifies opportunities in quality growth companies. The team looks at barriers to entry and competitive advantages, and like the Ninety One offering, has a “very formal” integration of ESG factors.

“There may be a little bit of similarity to the qualitative overlay employed by the Ninety One fund, but the Schroders fund is not model-driven,” Poole said.

Poole believes that both offerings have clear processes and have been consistent with their approach.

“They have been doing it for a long time, and it’s well reflected in the portfolio construction.”

The differences in their investment processes are reflected in their portfolio holdings.

“For example, the Schroders fund is overweight developed Asia, particularly in Hong Kong, and is underweight China. That is reversed in the Ninety One strategy,” Poole said.

Geographic allocation

Source: Fund factsheets, as of end-December 2020.

Top 10 holdings

Source: Fund factsheets. As of end-December 2020.

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