Schroder US Smaller Companies Z

Investment Process

The investment universe comprises around 1800 stocks with a market cap between US$200m and US$2bn at the time of purchase, essentially those in the Russell 2000 benchmark but excluding the less liquid names. The portfolio is built primarily on a bottom-up basis by Jones and her team of analysts and includes three types of companies: - Mispriced growth (50-60% of portfolio) – companies where sustainable change is occurring that will lead to higher earnings, revenues, cashflows or margins over 2-3 years. - Steady eddies (20-30%) – companies growing consistently, though generally at lower rates than the mispriced growth stocks. - Turnarounds (0-20%) – companies whose growth engine has broken, but where the manager sees a catalyst for a return to growth. The overall portfolio typically displays a bias to both growth and value factors - a growth at a reasonable price style.