Schroder US Mid Cap

Run out of New York by Bob Kaynor, Schroder US Mid Cap has a focus on small and medium-sized companies, with a diversified set of return drivers, in order to dampen the risk of the overall portfolio. The investment process is underpinned by in-depth company analysis, which has led to superior stock selection over time.

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Our Opinion
Fund Manager
Key Facts
Fund Performance
Risk
Company Description
Investment process
ESG

Our Opinion

In a market as difficult to beat as the US, we like that good stock-picking, as opposed to sector allocation, has formed the foundation of this fund's success. Schroder US Mid Cap is set up quite cautiously, with a three-bucket approach, and consequently tends to hold up well in tough markets.

Fund Manager

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Fund Manager

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Robert "Bob" Kaynor, CFA, is a Portfolio Manager for the Hartford Schroders US Small Cap Opportunities Fund and the Hartford Schroders US MidCap Opportunities Fund. He joined Schroders in 2013 as a Senior Equity Analyst and became Research Director in 2014. Prior to Schroders, Bob was the Chief Investment Officer at Ballast Capital Group (2010-2013), a Managing Director at Ramius Capital Group (2003-2010), and a Partner/Analyst at Barbary Coast Capital Management (2000-2003). He began his career in 1994 at RCM Capital Management. Bob holds a BSc in Economics with Financial Applications from Southern Methodist University.

Robert "Bob" Kaynor, CFA, is a Portfolio Manager for the Hartford Schroders US Small Cap Opportunities Fund and the Hartford Schroders US MidCap Opportunities Fund. He joined Schroders in 2013 as a Senior Equity Analyst and became Research Director in 2014. Prior to Schroders, Bob was the Chief Investment Officer at Ballast Capital Group (2010-2013), a Managing Director at Ramius Capital Group (2003-2010), and a Partner/Analyst at Barbary Coast Capital Management (2000-2003). He began his career in 1994 at RCM Capital Management. Bob holds a BSc in Economics with Financial Applications from Southern Methodist University.

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Key Facts

Asset type Equity

Annual Income (Historic) -

Sector North America

Gearing-

Fund Size-

Fund Manager Start Date 10 January 2018

Ongoing Charges Figure (OCF) -

Payment Date(s) Jun

Annual Management Charge (AMC) -

Fund Performance

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Risk

Smaller and medium-sized companies can be less liquid than investments in larger companies. However, the manager is cognisant of this fact and usually invests around 5-10% in assets that he can buy or sell more quickly. As a result, Schroder US Mid Cap fund is typically less volatile than its index.

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Risk: 7

Company Description

Founded in London in 1804, today Schroders operates in more than 25 countries, employing more than 5,000 people, close to the markets in which they invest. Schroders is listed on the London Stock Exchange and invests in a range of asset classes including equity, fixed income, multi-asset and alternatives. The group was awarded the Elite Equities Provider Rating in 2015, 2016 and 2017.

Fund Performance

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Risk

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Smaller and medium-sized companies can be less liquid than investments in larger companies. However, the manager is cognisant of this fact and usually invests around 5-10% in assets that he can buy or sell more quickly. As a result, Schroder US Mid Cap fund is typically less volatile than its index.

Quote from the Fund Manager

When investing in US equities, we don’t “go big or go home”, but instead “go mid and do not overbid”.

Bob Kaynor

Lead Manager

Investment process

Stock selection is driven by fundamental analysis by Bob and his team of sector specialists. To diversify the portfolio, the team has three sources of stock returns. 'Steady eddies' or less cyclically-sensitive stocks act as ballast in the portfolio. 'Mispriced growth' are stocks where Bob feels the market has not fully understood the company's earnings potential. The last, and smallest bucket, is ‘recovery-type’ situations. A strict sell discipline is in place, with the setting of price targets.

Risk

Smaller and medium-sized companies can be less liquid than investments in larger companies. However, the manager is cognisant of this fact and usually invests around 5-10% in assets that he can buy or sell more quickly. As a result, Schroder US Mid Cap fund is typically less volatile than its index.

ESG

ESG - Integrated
ESG factors are integrated throughout the investment process for the whole of the Schroders fund range. Initial research focuses on the nature and sustainability of a company’s business model. For those warranting further investigation ESG factors are assessed on a company by company basis.

The process begins with the ‘SustainEx’ tool which has been developed in-house by a 25-strong central ESG team. SustainEx quantifies the positive and negative impacts companies have on society. It has won a number of awards and continues to be upgraded all the time. Most approaches measure impact relative to a benchmark, whereas SustainEx calculates a quantifiable overall impact. There are over 45 positive and negative externalities which have been drawn from over 400 academic studies and are applied to 9,000 global companies. The tool helps fund managers to identify previously unaccounted for ESG risks and helps them to build these risks into their valuation framework. Each individual strategy has its own ESG specialist on the team. In addition to SustainEx, analysts also use the Context tool which allows them to add their own input. It is also used in the valuation process, with higher discount rates applied to weak ESG companies. Some companies’ ESG will be so weak that they are considered uninvestable. ESG also helps shape portfolio construction: those stocks with a higher ESG risk may have a reduced weight in the portfolio, or if the risk is high enough, no position at all.

Related Insights

The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.