River and Mercantile will launch an unconstrained European ex-UK equity fund for new hire James Sym on Wednesday 30 September 2020.
Designed to be a core client portfolio holding, the high-conviction ES R&M European Fund will hold 30-50 stocks with no restrictions on sector weightings.
The fund, the first for Sym since he joined River and Mercantile from Schroders earlier this year, will be driven primarily by a bottom-up stock selection process but will offer the manager the flexibility to make top-down calls when advantageous, particularly during turns in the business cycle when he identifies opportunities to make an outsized return.
Bolstering R&M’s equities propositions, the fund will have strong ESG credentials, with only companies contributing in a positive way to their customers and society considered for inclusion in the portfolio.
The fund will aim to provide a sustainable yield (as a consequence of the investment process rather than a ‘reach for yield’) derived from activities with good ESG credentials. The intention is to grow the yield whenever appropriate from a business cycle perspective.
James Sym says: “There is a great opportunity in Europe today. The region has gone through four massive crises in the last ten years which has created many attractive investment opportunities. Additionally, we see Europe’s response to the pandemic as the genesis of a brighter future for the region. The strategy will offer investors a great chance to take part in a European stock market resurgence. It’s also very important to me that I can explain to my investors why they can be proud of investing in every single holding, and as such how they are contributing to positive change in society.”
Simon Smith, Head of UK Wholesale at River and Mercantile, says: “The dominance of quality and growth stocks over the last decade has led to a very narrow European fund sector where investors have often found it difficult to diversify. The ES R&M European Fund will offer something different that will help investors construct more resilient portfolios with a sound ESG underpinning.
“At a time when Europe has new-found significant structural tailwinds to recovery and growth, we are excited to launch a fund so well placed to navigate the region’s diverse markets as we continue to grow our active equity proposition with the aim of meeting clients’ evolving needs.”