Generation next with Rob Strachan: ‘Be curious’

The Evenlode analyst discusses translating life experience and a study of the ‘loose forces’ of history into a holistic investment philosophy

Rob Strachan
2 minutes

Q: Which asset classes, sectors or strategies are attracting your attention and why?

Consumer goods and healthcare are catching our eye. While currently out of favour they remain attractive for us as long-term investors. They also happen to be the most defensive sectors, which speaks to what is happening in the market. Though there are some short-term headwinds for these companies, there is a selection that are structurally set up to handle those risks and emerge strongly, with the bonus of being priced at a discount. Over the long term we believe our approach will achieve strong risk-adjusted compounding.

Q: How do you see sustainable and ESG-oriented investing evolving from here?

As long-term investors, we consider stewardship an important part of our philosophy and engage actively with the companies in which the Evenlode funds are invested. Environmental change and management incentivisation are risks that all companies face, and these have a real impact on returns and profits.

We use the market to invest in companies rather than use the existence of companies to play in the market. As such our thinking has always been centred on the real, physical world, beyond the scope of a financial data provider. Taking a holistic view is part of being responsible, and effective, stewards of capital – and this should not be isolated from the central principles of risk management.

Over time we will see companies responding to these risks through their operations and legislation. For us, it will continue to be a core part of the Evenlode process, including actively engaging with companies, voting independently and doing our own emissions analysis.

Q: What will be different about the investment sector a decade from now?

This is the big question about big trends; active versus passive, technology and market concentration to name a few. A decade is a long time, too far to try and predict. If I think about my own world of influence, so much has changed in the past five years which makes me think much will be different in another five, let alone 10.

They say we underestimate the impact of a new technology in the long term and overestimate it in the short term, so maybe in 10 years investing will have given way to a grand AI that is yet to be invented, and we will have fundamentally changed our central philosophical model for society.

However, investing is about risk, and the nature of risk will never change. It will always make sense to invest in companies that are structurally advantaged to manage the downside, capture the upside and ride the wave of compounding.

Read the rest of this article in the January issue of Portfolio Adviser magazine