The group has decided to ditch geographical desk heads for a more specialist team approach
Martin Currie has completed the reorganisation of its investment management team with the abolition of geographic desk heads.
The group is in the process of unveiling the new structure to its US institutional clients later this week. While individual managers will remain in charge of named products, such as Jeff Saunders on the UK growth fund, most have been put into global sector teams, each under a sector specialist. Each of the nine teams follows a sector within the MSCI World Index.
As a result, the Martin Currie International Growth unit trust, run by Tom Walker, is now looking to allocate assets by sector rather than geography.
James Fairweather, chief investment officer at Martin Currie, said its benchmark will remain the FTSE World Index as investors want to see relative outperformance of the index.
But, he stressed, despite this relative performance measure, the group will be actively monitoring the portfolio internally against global sectors. Traditional geographic asset allocation no longer adds significant value due to the growing correlation within sectors in the developed world, said Fairweather.
Japan and the emerging markets are seen as exceptions to this rule by Martin Currie. As a result, Michael Thomas remains as head of Japan and Jean de Bolle as head of emerging markets. Fairweather said Japan has totally different influences on its market from the rest of the world, hence its low correlation.
He stressed that where there is global correlation, in particular for tech and telecom stocks, the Japan team will be using input from the sector specialists. Equally, the emerging markets team will keep in close contact with the materials sector specialists as many of these companies are domiciled within this area.
The group has also established Saunders as head of UK growth and Tom Maxwell as head of UK income. Fairweather said sector specialists look at stocks with a market cap as low as $4bn but Saunders often picks stocks within the FTSE 350 that are smaller than this. The UK income role has been established because, while income investing is important for UK investors, it is not a requirement of Martin Currie's overseas clients.
Sector specialists are expected to produce theme and stock-picking ideas that can then be put into a portfolio. Fairweather said Martin Currie does not want to create a team of in-house analysts and intends to continue purchasing broker analysis from outside. The nine sector specialists heading up the teams include Liz Flockart on consumer discretionaries, Rachel Nimmo on consumer staples, Andrew Dykes on pharmaceuticals, Grant Wilson on financials and Wendy Anderson on energy. The other four are Douglas Wight on telecoms, John Monnelly on technology, Chris Butler on industrials and Slim Feriani on materials.
Martin Currie International Growth has returned -3.61% over three years to 1 April, offer-to-bid with net income reinvested. This ranks it 61 out of 128 in its sector.
For a full interview with Fairweather and analysis of its changing investment process, see the next issue of Investment Week's monthly sister publication Fund Strategies, which comes out this week.
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