World Stars seeks quality over quantity
ALTHOUGH the Stern family’s connections with banking and the provision of financial services across Europe can be traced back more than 200 years, it is only in the last year that it has delved into the world of fund management on behalf of private investors.
The result is J Stern World Stars Global Equity, an £83 million fund managed out of J Stern & Co’s offices in London by Christopher Rossbach.
J Stern& Co–with the J standing for founder Jerome–was set up in St James’s, Central London, nine years ago to manage a mix of family money and the investment portfolios of seriously rich clients. In total, it manages £575 million of assets from both London and Zurich.
As the name alludes to, World Stars Global Equity invests in some of the world’s biggest and most successful listed companies – 26 of them. Holdings include technology giants – Amazon and Alphabet – as well as strong consumer brands ( luxury goods manufacturer LVMH, drinks producer Pernod Rica rd) and leading healthcare companies (Roche and Thermo Fisher Scientific).
Quality, says Rossbach, is the underlying investment theme. He says: ‘The thrust of the fund is to invest in quality companies for the long term – businesses operating in growing industries that have a competitive advantage, and are supported by balance sheets strong enough to withstand any adversity. These are businesses we believe that will prosper long into the future.’
It’s an approach that has seen the investment fund bear up remarkably well to the global stock market shake-up. Over the past three months, it has recorded losses of 2.1 per cent, compared to a 19 per cent fall in the FTSE All-Share Index.
Despite the emphasis on the long-term, Rossbach has not been frightened to make portfolio changes. In February, when he saw that coronavirus would have a massive adverse impact on international travel, he sold the fund’s stake in US-listed Booking Holdings. He used the proceeds to invest in Swiss companies Givaudan (a manufacturer of flavours and fragrances) and Alcon – a specialist in eye care products. Companies, he believes, that will thrive as the world economy emerges from lockdown.
Rossbach reckons the pandemic has accentuated the ‘disruptive’ impact of technology- focused companies such as Amazon and Alphabet. He also says it has put a focus on the need for robust healthcare infrastructures around the world.
Yet, he is confident that strong consumer brands will do well as economies emerge from lockdown and people start spending again. ‘ We’re confident about the future ,’ Ross bach says. ‘ Quality companies will emerge stronger than ever.’
Although the fund is barely a year old, Rossbach has been running private client portfolios built on the same investment strategy underpinning World Stars since 2012. So he is convinced the approach works well. He is supported by three in-house analysts who sc our markets for new investment opportunities.
The fund is not designed for income-seekers. Rossbach prefers to invest in companies that use the revenues they generate to reinvest in their businesses – or to fund acquisitions – rather than divert it to shareholders through dividends. The fund’s total annual charges are 1.2 per cent.
Given the fund is relatively young and J Stern & Co is a new player in the funds market, not all wealth platforms have yet to make World Stars available to clients. Those that have include AJ Bell and Seven Investment Management.