Jenny Jones retires from Schroders with alpha intact

US equities manager has an investment career spanning almost four decades

Jenny Jones’ ability to generate alpha has been strong right to the end as the well-known fund manager prepares to retire from Schroders.

Jones will continue as fund manager and head of the head of US small cap and SMID equities team until 31 March, Schroders confirmed on Friday afternoon. Responsibilities will be handed over to Bob Kaynor, co-portfolio manager of the US Small and SMID Cap Equities strategies, in the period leading up to that date.

Fundcalibre managing director Darius McDermott described Jones as well-known to retail buyers and said her long-term alpha generation remains competitive as she prepares to retire, despite several of her funds facing recent downgrades.

In 2018, Jones’ £2.5bn Schroder ISF US Small & Mid Cap Equity and £349.5m ISF US Smaller Companies funds were downgraded by Morningstar due to high fees and her US Mid Cap fell from an FE four-crown rating to a one-crown rating as it underperformed its peers in the IA North America sector. In October, the US Mid Cap and US Smaller Companies funds were removed from FE’s buy list.

But Fundcalibre retained its Elite Rating for the US Mid Cap fund. McDermott highlighted that her value-orientated style had been out of favour, particularly in the US stock market. “We measured her alpha generation not only against the US market or the mid-cap market but against the value indice and found the alpha generation was still there.”

Her longer-term performance has been more impressive.

The US Mid Cap fund has returned 401.7% since she took over in April 2005 compared to 347.4% in the Russell 2500 (GBP) and 261.4% in the IA North America sector, according to FE Analytics. The US Smaller Companies fund, which she has managed since December 2002, has returned 548.8% over that period while the Russell 2000 has returned 454.4% and the IA North America Smaller Companies sector has returned 456.9%.

Handover to Bob Kaynor

Jones, who has an investment career spanning four decades, will remain in an advisory capacity for several months.

She said: “I am very proud of my tenure at Schroders over 16 years and have always been focused on my fiduciary responsibility as an investor with our clients’ objectives in mind.

“In planning for a successor to my role that was a critical component as I wanted to ensure consistency in our process and approach. I am pleased that Bob shares that passion and is supported by a strong team that will aim to continue delivering strong risk adjusted returns to our clients over time.”

Kaynor became US Small and SMID Cap Equities co-portfolio manager in January 2018. He was previously director of Small and SMID Cap Research, a position he held since 2014. His investment career spans over 20 years, of which six years have been at Schroders.

McDermott said Jones built a strong team around her with a distinctive investment style, but said the succession planning had been well-telegraphed and didn’t think there was reason for investors to worry about the changes.

Schroders global head of equities Nicky Richards said: “At Schroders we have great strength and depth of experience within our US Small Cap and US Small and Mid Cap (SMID) Equities team.

“Jenny has built a team of experienced investment professionals who have worked together within the same investment process for many years and generated strong risk adjusted returns for our clients. Bob’s investment track record and leadership skills tell us he is the right person for the job.”

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