River & Mercantile has released details about its debut European equity fund to be launched by Schroders hire James Sym.
Launching this Wednesday, the ES R&M European fund will be a “high conviction” strategy with 30 to 50 stocks and no restrictions on sector weightings.
Sym (pictured), who joined the fund group from Schroders in June, will primarily use a bottom-up stock selection strategy but will have the flexibility to make top-down calls “when advantageous”.
ESG credentials will form a key part of Sym’s strategy with only companies “contributing in a positive way to their customers and society” being considered for inclusion in the portfolio.
The ES R&M European fund marks River & Mercantile’s first foray into European funds and is the first in a suite of funds to be spearheaded by Sym.
Sym is no stranger to boutique life
AJ Bell head of active portfolios Ryan Hughes doesn’t expect Sym to stray far from his value-based roots with the new strategy.
Sym managed over £1.5bn of assets at Schroders as lead manager on the European Alpha Income and European Alpha Plus funds and co-managing the European Alpha Focus and European Opportunities funds.
But “something to bear in mind” is Sym will have fewer resources at boutique firm River & Mercantile than he did at Schroders where he benefited from a massive European equities desk filled with analysts, Hughes said.
Chelsea Financial Services managing director Darius McDermott points out that Sym is no stranger to working at a boutique investment firm, having worked at Cazenove for many years before it was acquired by Schroders in 2013.
“Clearly, there was a different analyst contribution at Schroders then he will have at River & Mercantile,” McDermott said. “But he will have greater input into what the analysts look at as opposed to maybe being directed in a lot of different ways at a bigger organisation.”
Having spoken with Sym last week McDermott said he had been making use of River & Mercantile’s potential, valuation, timing (PVT) quant system to look at stocks through a fresh lens.
ESG focus unsurprising
Hughes said Sym’s focus on ESG, another differentiator from his Schroders funds, is not surprising.
“Not a fund launch or a day goes by without ESG being mentioned by somebody,” said Hughes. “So, it makes sense that there’s an element of ESG incorporated into the investment process now”.
Speaking about the fund launch Sym said it was very important for him to be able to explain to investors “why they can be proud of investing in every single holding, and as such how they are contributing to positive change in society”.
He added that the strategy would allow investors to take part in the “European stock market resurgence”.
“The region has gone through four massive crises in the last ten years which has created many attractive investment opportunities,” Sym said. “Additionally, we see Europe’s response to the pandemic as the genesis of a brighter future for the region.”
