Jenny Jones follows a unique approach when it comes to picking stocks for her Schroder US Mid Cap Fund. She divides opportunities into three categories: mispriced growth stocks, steady eddies, and turnarounds. Jones then “blends the best ideas from each of these categories”, says Rob Morgan of Hargreaves Lansdown.
It’s a strategy that’s served Jones well. The Schroder US Mid Cap Fund has risen 50.1% since she took the helm in April 2005. More than 20 years’ experience of fund management at Schroders and Morgan Stanley have no doubt helped.
One of her best ‘mispriced growth stocks’ has been Ross Stores. The national retailer of surplus clothing stock has benefited from a rise in demand from price-conscious consumers.
In the ‘steady eddie’ category she favours packaging manufacturer Crown Cork. Rising commodity prices temporarily increased the costs of the raw materials the firm uses and dented profits. But the subsequent share price drop allowed Jones to build up her stake in the company and since then profits have picked up again.
Interpublic stands out as a ‘turnaround’. The advertising agency’s high levels of debt may have put off other investors but a strong market position in an evolving industry persuaded Jones to buy. It’s now restructured its debt and other investors have returned, driving up the share price.
Given the quality and experience of Jones and her team, Morgan believes the “fund is capable of long-term outperformance of the US market”.
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Schroder US Mid Cap Fund top ten holdings
| Name of holding | % of assets |
|---|---|
| Republic Services Inc | 2.7 |
| Amdocs | 2.4 |
| NBTY Inc | 2.3 |
| Crown Holdings Inc | 2.3 |
| Berkley (WR) Corp | 2.3 |
| Burger King Holdings | 2.0 |
| HCC Insurance Holdings | 2.0 |
| Verisign | 1.8 |
| Omnicare Inc | 1.8 |
| Devry Inc | 1.8 |