The RWC Global Horizon Fund has achieved a return of almost 19 per cent in the past three years, with manager Louise Keeling using a long-term global perspective to maximise the opportunities from companies around the globe.
Keeling (pictured), whose fund has returned 18.8 per cent over the period versus the benchmark return of 12.0 per cent, has concentrated on buying undervalued businesses, believing investors with shorter time horizons may not have the ability to see latent value in such stocks. As a result, the fund has a high active share and a below-average turnover of just 14 per cent per annum.
This approach has allowed the fund to outperform not only the index but also its peers: the fund is rated by Lipper as top five percentile since inception.
“We use a long-term global perspective to maximise opportunities, rather than as a basis for allocating resources,” Keeling says. “Allowing stock selection to drive asset allocation can lead to different outcomes versus approaches with a CIO function which may determine whether index constituents of a country are in aggregate cheap or expensive.”
The Global Horizon strategy is pure “bottom-up” and agnostic to the geographic base of companies, with Keeling arguing there is often little correlation between the domicile and operational exposure of a company. “It is therefore reassuring that stock selection effect has driven the vast majority of the fund’s outperformance,” she says.
The manager also believes strongly in alignment of interests throughout the investment process: a philosophy of “owning” rather than “renting” companies means that the fund’s objectives are more closely matched with those of end investors.
“We aim not only to align ourselves with our clients by having a fee structure which shares performance risk, but also an investment approach which emphasises whether investee company management are incentivised to be effective capital allocators,” Keeling says.