Barings Asset Management has rebranded its global equity fund, now investing in ‘global leaders’ such as coffee giant Starbucks and Sony.
The team rebranded the Global Select fund to the Global Leaders fund in January and is now looking for companies showing “industry excellence, superior returns and a long growth path” with no size or geography limitations.
The $49.5m fund seeks to invest in companies with a compound annual growth rate of at least 10 to 20 per cent on a five-year investment horizon.
The Baring Global Leaders fund, which currently has 58 holdings, has stocks such as Taiwan Semiconductor, Mediclinic and Alimentation Couche-Tard.
The objective of the fund has remained the same after the rebrand, but reflects the transition Barings’ equity portfolios have undergone through the quality Growth At A Reasonable Price (GARP) process, says Baring Asset Management head of global equity Jean-Louis Scandella.
Scandella tells Fund Strategy: “Our approach encompasses all the regional funds we have in the company and all those ideas into one. We look at the best ideas from all corners of the world within our quality GARP universe.”
Susan O’Brien, investment manager in the international and world equity team at the asset manager, says: “We look at companies with three main features; brand, expertise and technology. Most of our stocks have at least two of these features.”
She says the team also looks at stocks not well known for their brand, such as Canadian convenience store operator Alimentation Couche-Tard, which has positive growth margins and is “well set for a long growth path”. The stock is the top holding in the fund with a 2.5 per cent exposure.
Another favourite stock is Sony, says Barings’ head of international and world equities David Bertocchi, which makes 2.2 per cent of the fund.
Bertocchi says: “Sony has very exciting long-term prospects ahead, especially in its gaming and music business in terms of profitability.”
Well-run younger and smaller companies can be ‘global leaders’ as well, the team say.
Scandella says: “We prefer global leaders in their infancy, including some mid-caps stocks. We look at pioneers and early stage firms, which have the potential to become global leaders.”
As for any Brexit impact on investment decisions for the fund, Scandella says he doesn’t see any immediate “dramatic change” in the fund’s investments because of the long-term horizon and the bottom-up approach of the team.
He says: “It’d be a waste of our efforts to try and see when the situation will change. Even on markets it is difficult to make an assessment at the moment.”