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She oversees equity teams mainly for international ex-US mandates, which engage in bottom-up, fundamental stock picking based on the growth-at-a-reasonable-price model. But stock picking occurs within the context of big-picture trends that determine what companies are going to offer value.
Until recently these would have been the internet, resources and China. This didnÆt mean Schroders simply bought dotcoms, mining stocks and H-shares. But it did mean there were fundamental drivers that shaped the world, and that those companies positioned to benefit from them, in any sector or country, would enjoy superior earnings growth.
Maisonneuve believes the overriding trends are changing. She identifies three structural trends that will have the most widespread impact on companies over the next 10-15 years. ôHow you frame your investment discussions determines how to find companies with superior and sustainable earnings growth,ö she says.
First is climate change. For a portfolio manager, this is not only about being ægreenÆ or buying that wind-power company. It means realising that companies need sustainable resources and those positioning themselves to deal with things like rising oil prices can fare better.
ôThere will be migration and adaptation,ö she says, noting some companies are innovating in food production, transport, ægreenÆ construction and other areas to better utilise energy and resources. She says the world needs to spend $20 trillion in infrastructure by 2030 to deal with problems such as rising sea levels. Governments will introduce energy-saving regulations. Consumers will pay increasing attention to companiesÆ carbon footprints.
Second is demographics: the aging industrial countries, followed quickly by aging Asian societies, but with very young populations in Southeast Asia, India, the Middle East and Africa. Governments in the first bloc must deal with longevity, shrinking labour forces and falling tax revenues; capital accumulation will give way to spending, particularly on healthcare, and inheritances will become a thing of the past.
At the same time, young people in emerging markets need to migrate to industrialized countries for employment; their workforces are growing, supporting economic expansion, but in an increasingly urbanized setting, with huge stresses on infrastructure and space.
This suggests companies in areas such as logistics, services and healthcare have the opportunity to position themselves, while those in utilities (including telecommunications) and certain consumer products must find creative ways to get around a falling user base.
The third factor is a æsupercycleÆ of growth in big emerging markets such as China and India, as well as Brazil, Russia and elsewhere. With equity markets in China and India down 30-40% this year, Maisonneuve believes these offer great buying opportunities for investors with a 5-10 year time horizon.
She is also investing in companies that can take advantage of combinations of these three structural trends, such as financial companies that successfully disintermediate Western capital to emerging markets. Other areas of potential gains include pharmaceuticals, warfare for managing population pressure, companies providing access to resources, or those boosting energy efficiency.
ôRight now the markets are not looking at these stories,ö she says. ôThey are too focused on what happens in the next month.ö
Investors still favour private equity assets for their higher growth, better governance structures, and diversification potential.
The recent focus on greenwashing has put bond issues under greater scrutiny. However, some market participants believe this risks paralysis by analysis.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.