River and Mercantile have launched a European equity fund, managed by new hire James Sym – well known for his distinctive investment style.
At his previous employer, Schroders, Mr Sym used a business-cycle approach to stock selection, focusing on identifying companies that should perform best during a given point in the economic cycle.
Mr Sym will also use his experience of income investing and the fund will target an income with the emphasis on a growing yield.
Given what markets have gone through in 2020, the focus on a growing income is pragmatic and makes a lot of sense as many companies have rebased their dividends. The fund is likely to avoid the popular and more expensive growth stocks.
Starting with a top-down business cycle view over the portfolio is a differentiator to many fund managers who often solely look at fundamentals. This is coupled with a contrarian style.
The new fund will continue to use Mr Sym’s experience in this space, which is always reassuring as seeing a fund manager change their style is usually a warning sign. The fund will be concentrated and unconstrained, giving the manager the freedom to express his views.
The fund will also have a strong emphasis on environmental, social and governance investing – only investing in companies that can make a positive contribution to their customers and society.
As a new fund launch it has given Mr Sym and the team an opportunity to incorporate ESG at the heart of the process.
Overall, it is an attractive proposition from an experienced manager in a new home. Fees are competitive at 0.75 per cent annual management charge for the most expensive B class, falling to 0.6 per cent for the S class.
Adrian Lowcock is head of personal investing at Willis Owen