In Search of Global Trends

By age 11, she'd had her mother find a school where she could study Mandarin. During her Paris MBA studies, Maisonneuve hoped to set up an education exchange with a Chinese counterpart. The idea didn't pan out, but her time spent living in China and three dozen trips back helped her keep her finger on the pulse of its evolution into an economic superpower.

Meanwhile, she's parlayed her fascination with China into a high-flying career, most recently as head of global and international equities at Britain's Schroder Investment Management. Having witnessed Mao-suit-wearing Chinese citizens cycling a half-hour to place phone calls, led her to invest early in shares of China-oriented retailing, mobile-phone and automotive stocks.

Maisonneuve's mandate at Schroder isn't China-specific — although China figures prominently on her investment horizon: From London, the 43-year-old money manager monitors investment trends to ferret out the best stock-investing ideas in every industry in all parts of the globe for the $22 billion in assets she and her team oversee.

That includes a hefty chunk of cash from Vanguard Investments, which has entrusted management of 52% of its Vanguard International Growth Fund (a $19.6 billion multi-manager product that trades under the ticker VWIGX) to Maisonneuve and her colleagues. And she finds that the process of identifying companies that offer both growth at a reasonable price and a sustainable competitive advantage keeps taking her back to China-related themes.

"I believe that every 10 years or so, there are three things that really impact the world of investing," she says, citing China, natural resources and the Internet over the past decade. Looking forward, Maisonneuve predicts that the key factors will be climate change, demographic change and what she calls "Chindia" — a word she uses to connote all the emerging markets, not just China and India.

Based on purchasing-power parity, she argues, the combined gross domestic product of the BRIC nations (Brazil, Russia, India and China) already equals that of the U.S.

"These countries have been successful in engineering domestic demand; they are not just exporters any more," she says. Already, she notes, their impact can be seen in world commodity markets, where the rate of increase in China's demand for crude is closely tied to the rate at which oil's price has soared.

But rapid economic development in emerging and heavily-populated nations like China and India will have a dramatic impact on global warming. Maisonneuve is seeking investments that may benefit as the world grapples with climate change.

"There are calculations that perhaps some $20 trillion of investment will be made in trying to mitigate or address climate change over the next 25 years," she says. "But I think the actual sum will be higher, as we try to build new dams, construct energy-efficient buildings. In Holland, there is discussion about constructing buildings on floating foundations" as water levels rise around the world.

One stock she favors is Syngenta (SYT), a Swiss biotech that, through sales of seeds and crop-protection products such as herbicides, fungicides and insecticides, tries to boost yields from the diminishing supply of arable land. "Because of climate change — and because of the increasing global population — we believe that companies in this business will have superior pricing power," Maisonneuve says.

Like most of the investment ideas that end up in her clients' portfolios, Syngenta came to her attention as a result of local research done by one of Schroder's dozen global-research offices.

Those recommendations are the first step in the ongoing effort to winnow a 2,900-stock universe to what she considers to be a manageable list of a few hundred, from which she and her colleagues will select names to be added to the Vanguard fund. A team of global sector specialists takes a second look at those recommendations from a broader basis, reducing the 1,300 or so highly-rated stocks down to some 500. "But only a few of those will be really attractive," says Maisonneuve. "We also want to see that management has vision, that there are barriers to new competitors, that the company has the potential to increase its market share."