UK- Shropshire County Council’s £630m pension fund has dropped Schroder Investment Management and appointed F&C Management to run a £30m (e47m) global emerging markets equity mandate.

Jeff Chowdhry, joint head of emerging markets, and Casper Romer, a director at F&C, will manage the fund actively against the MSCI emerging market free index. Tracking error is likely to hover between 5% and 6%.

Shropshire’s appointment takes F&C’s emerging market assets to e4.1bn.

Philip Guy, pension and treasury manager at the Shropshire fund, says the change was the upshot of a manager review it carries out every three years.

Schroders was deemed to have underperformed on the £20m emerging market equities and dropped. Shropshire subsequently increased its emerging market share to bring it in line with a strategic allocation of 5% of total assets.

Derek Woodvine, chairman of the pensions committee at Shropshire council, said: “emerging markets is an important asset class and F&C’s excellent track record and length of experience in managing emerging market equities was a crucial factor in our decision.”

Schroders will continue to manage Japanese equity and Pacific basin ex-Japan equity mandates.

Emerging markets have outperformed developed markets in the last twelve months and are up 11% against a 14% decline in the MSCI World Index.

“We expect the rally in emerging markets to continue over the next 12 months, led by three primary drivers- stable interest rates, strong underlying fundamentals and cheap valuations,” says Jeff Chowdhry.