Schroder
Global Equity Income Fund
Final Report and Accounts
July 2016
Contents
Schroder
Global Equity Income Fund
Fund Information1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Investment objective and policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Financial highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Fund information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Ongoing charges figure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Review of Investment Activities1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Risk Profile1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Risk and reward indicator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Specific risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Statement of the Manager’s Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . .7
Report of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Independent Auditors’ Report to the Unitholders
of Schroder Global Equity Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Comparative Tables1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Portfolio Statement1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Summary of Portfolio Transactions1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Largest purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Largest sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Statement of Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Statement of Change in Net Assets Attributable to Unitholders . . . . . . . .23
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Notes to the Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
1 Accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
2 Net capital gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
3 Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
5 Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
6 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
7 Fair value hierarchy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
8 Debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
9 Cash and bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
10 Other creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
11 Contingent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
12 Related party transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
13 Unit classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
14 Derivative and other financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . .31
15 Direct transaction costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
16 Units in issue reconciliation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
17 Post balance sheet events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Distribution Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Interim distribution for the six months ended 15 January 2016 . . . . . . . . . . . . . .40
Final distribution for the six months ended 15 July 2016 . . . . . . . . . . . . . . . . . . .41
Corporate unitholders (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Equalisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
General Information1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Authorisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Other information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
1 Collectively these comprise the Authorised Fund Manager’s report.
Schroder Global Equity Income Fund
Fund Information
Investment objective
and policy
The fund’s investment objective is to provide income and capital growth for
investors over the long term primarily through investment in equity and equity
related securities of companies worldwide which offer attractive yields and
sustainable dividend payments.
Investment will be in directly held transferable securities. The fund may also
invest in collective investment schemes, warrants and money market
instruments.
On 23 October 2015 Appendix II (Investment Powers and Restrictions) of the
Prospectus was amended to draw attention to the Manager’s general power
under Chapter 5 of the Collective Investment Schemes sourcebook (COLL) to
enter into underwriting or sub-underwriting agreements.
Financial
highlights
Dealing price
15.7.16
15.7.15
% change
A Income units
57.68p
54.31p
6.21
A Accumulation units
79.96p
72.96p
9.59
L Income units
63.96p
59.72p
7.10
L Accumulation units
68.34p
61.84p
10.51
Z Income units
78.77p
73.60p
7.02
10.43
Z Accumulation units
Final distribution per
Z Income unit
Fund information
89.78p
81.30p
15.9.16
15.9.15
1.6313p
1.3722p
Launch date
18 May 2007
Launch price
50.00p per A Income unit
50.00p per A Accumulation unit
Launch date
8 November 2011
Launch price
50.00p per Z Income unit
50.00p per Z Accumulation unit
Launch date
1 October 2013
Launch price
50.00p per L Income unit
50.00p per L Accumulation unit
Accounting dates
Revenue allocation dates
Interim
Final
15 January
15 July
15 March
15 September
3
Schroder Global Equity Income Fund
Fund Information (continued)
Ongoing charges
figure
4
For the year
to 15.7.16
For the year
to 15.7.15
A Income units
1.70%
1.71%
A Accumulation units
1.70%
1.71%
L Income units
0.87%
0.88%
L Accumulation units
0.87%
0.88%
Z Income units
0.95%
0.96%
Z Accumulation units
0.95%
0.96%
Schroder Global Equity Income Fund
Review of Investment Activities
From 15 July 2015 to 15 July 2016, the price of A Accumulation units on a
dealing price to dealing price basis rose 9.59%. In comparison, the MSCI
World Index generated a net total return of 15.84%1 in sterling terms.
1 Source: Thomson Reuters Datastream.
Our complete income strategy delivers returns from two sources: firstly, the
income the companies generate through paying dividends; and secondly, the
capital returns generated by lowly valued underperforming companies improving.
The period under review was difficult for value investors as value underperformed
growth, largely due to investors seeking stability in the uncertain economic
environment.
The leading contributor was US electronic component manufacturer Vishay
Intertechnology, a recent addition to the fund. Its business is geographically
diversified, it consistently generates free cash flow and its balance sheet is
robust. Luxury goods businesses Michael Kors Holdings and Coach performed
well as both announced results that were better than the market’s low
expectations.
The main detractor was US office supplier Staples after its proposed merger with
Office Depot was halted by regulators. We believe Staples offers significant
potential for capital and dividend growth. Another detractor was UK supermarket
group Tesco: results indicated that investment would suppress profits in the
short term, but the long term management turnaround remains on track and the
balance sheet is stronger.
There is growing evidence to suggest a primary consideration for investors since
the credit crisis has been avoiding volatility. This only enhances what we might
term the ‘bond proxy paradox’ – the hunt for supposedly safe and stable stocks,
pushing up valuations to a point where they can really no longer be considered
either safe or stable. Indeed, the premium paid for the perceived safety of many
traditionally defensive stocks – such as food & beverages – has increased. Such
things tend to move in cycles and what was once considered an advantage will,
after a critical point is reached, become a disadvantage. There is no such thing
as an asset that is always safe or always risky – risk is determined by the price
you pay.
Fund Manager:
Ian Kelly
Fund manager of Schroder Global Equity
Income Fund, Schroder ISF Global Equity
Yield and Schroder ISF Global Dividend
Maximiser
Also Fund manager of Schroder ISF
European Equity Yield and the co-manager
of Schroder ISF European Dividend
Maximiser
Joined Schroders in May 2007 as an
analyst specialising in European insurance
and automobiles
Ian completed a PhD in Biophysics at
Newcastle University and a Masters Degree
in Investment Management at Cass
Business School, London
Chartered Financial Analyst (CFA) charter
holder
As of April 2016, and Jamie Long’s departure, Ian Kelly has been the sole
manager of the fund.
Please remember that past performance is not a guide to future performance
and it might not be repeated. The value of investments and the revenue from
them may go down as well as up and investors may not get back the amount
originally invested. Because of this, you are not certain to make a profit on your
investments and you may lose money.
5
Schroder Global Equity Income Fund
Risk Profile
Risk and reward
indicator
Lower risk
Potentially lower reward
1
2
Higher risk
Potentially higher reward
3
4
55
6
7
The risk category was calculated using historical performance data and may not
be a reliable indicator of the fund’s future risk profile.
The fund is in this category because it can take higher risks in search of higher
rewards and its price may rise and fall accordingly.
The fund’s risk category is not guaranteed to remain fixed and may change over
time.
A fund in the lowest category does not mean a risk free investment.
Specific risks
The fund invests in assets which are exposed to currencies other than sterling.
Exchange rates may cause the value of overseas investments and the revenue
from them to rise or fall.
The fund invests in emerging markets and the Far East. This involves a high
degree of risk and should be seen as long term in nature.
The fund invests in a smaller number of stocks. This carries more risk than funds
spread across a larger number of companies.
The fund may use derivatives for specific investment purposes. This involves a
higher degree of risk and may lead to a higher volatility in the unit prices of the
fund.
As a result of the expenses being charged wholly to capital, the distributable
revenue of the fund may be higher, but the capital value of the fund may be
eroded which may affect future performance.
For these reasons, the purchase of units should not normally be regarded as a
short term investment.
6
Schroder Global Equity Income Fund
Statement of the Manager’s Responsibilities
The Financial Conduct Authority’s Collective (FCA’s) COLL requires the Manager
to prepare accounts for each annual and half yearly accounting period, in
accordance with United Kingdom Generally Accepted Accounting Practice,
which give a true and fair view of the financial position of the fund and of its net
revenue and the net capital gains on the property of the fund for the year. In
preparing the accounts the Manager is required to:
– select suitable accounting policies and then apply them consistently;
– comply with the disclosure requirements of the Statement of Recommended
Practice (SORP) for UK Authorised Funds issued by the Investment
Management Association (IMA (now the Investment Association (IA))) in
May 2014;
– follow generally accepted accounting principles and applicable accounting
standards;
– prepare the accounts on the basis that the fund will continue in operation
unless it is inappropriate to do so;
– keep proper accounting records which enable it to demonstrate that the
accounts as prepared comply with the above requirements;
– make judgements and estimates that are prudent and reasonable.
The Manager is responsible for the management of the fund in accordance
with its Trust Deed, the Prospectus and the COLL and for taking reasonable
steps for the prevention and detection of fraud, error and non-compliance
with law or regulations.
The Manager’s report and accounts for the year ended 15 July 2016
were signed on 1 September 2016 on behalf of the Manager by:
J.A. Walker-Hazell
Directors
P. Chislett
7
Schroder Global Equity Income Fund
Report of the Trustee
Statement of the Trustee’s responsibilities in relation to the accounts
of the Scheme
The Trustee is responsible for the safekeeping of all of the property of the
Scheme (other than tangible moveable property) which is entrusted to it and for
the collection of revenue that arises from that property.
It is the duty of the Trustee to take reasonable care to ensure that the Scheme
is managed by the Authorised Fund Manager in accordance with the Financial
Conduct Authority’s Collective Investment Schemes Sourcebook (COLL) and
the Scheme’s Trust Deed and Prospectus, as appropriate, in relation to the
pricing of, and dealings in, units in the Scheme; the application of revenue
of the Scheme; and the investment and borrowing powers of the Scheme.
Report of the Trustee for the accounting period from 16 July 2015 to
15 July 2016
Schroder Global Equity Income Fund (“the Scheme”)
Having carried out such procedures as we consider necessary to discharge
our responsibilities as Trustee of the Scheme, it is our opinion, based on the
information available to us and the explanations provided, that in all material
respects the Authorised Fund Manager:
(i) has carried out the issue, sale, redemption and cancellation, and calculation
of the price of the Scheme’s units and the application of the Scheme’s
revenue in accordance with the COLL as appropriate, and, where
applicable, the Scheme’s Trust Deed and Prospectus; and
(ii) has observed the investment and borrowing powers and restrictions
applicable to the Scheme.
J.P. Morgan Europe Limited
Trustee
Bournemouth
1 August 2016
8
Schroder Global Equity Income Fund
Independent Auditors’ Report to the
Unitholders of Schroder Global Equity
Income Fund
Report on the financial statements
Our opinion
In our opinion, Schroder Global Equity Income Fund’s financial statements, (the
“financial statements”):
– give a true and fair view of the financial position of the fund at 15 July 2016
and of the net revenue and the net capital gains of its scheme property for the
year then ended; and
– have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice, the Statement of Recommended Practice for
UK Authorised Funds, the Collective Investment Schemes sourcebook and
the Trust Deed.
What we have audited
The financial statements of the Schroder Global Equity Income Fund (the “fund”),
which are prepared by Schroder Unit Trusts Limited (the “Authorised Fund
Manager”), comprise:
– the balance sheet of the fund as at 15 July 2016;
– the statement of total return of the fund for the year then ended;
– the statement of change in net assets attributable to unitholders of the fund
for the year then ended;
– the notes to the fund’s financial statements, which include a summary of
significant accounting policies and other explanatory information; and
– the distribution table.
The financial reporting framework that has been applied in the preparation of the
financial statements is United Kingdom Accounting Standards, comprising
FRS 102 “The Financial Reporting Standard applicable in the UK and Republic
of Ireland”, and applicable law (United Kingdom Generally Accepted Accounting
Practice), the Statement of Recommended Practice ‘Financial Statements of
UK Authorised Funds’ issued by the Investment Management Association
(the “Statement of Recommended Practice for Authorised Funds”), the Collective
Investment Schemes sourcebook and the Trust Deed.
In applying the financial reporting framework, the Authorised Fund Manager has
made judgements where appropriate, for example in respect of substantive
accounting estimates. In preparing such estimates, they have considered future
events and related assumptions.
9
Schroder Global Equity Income Fund
Independent Auditors’ Report to the
Unitholders of Schroder Global Equity
Income Fund (continued)
Opinions on matters prescribed by the
Collective Investment Schemes sourcebook
In our opinion:
– we have obtained all the information and explanations we consider necessary
for the purposes of the audit; and
– the information given in the Authorised Fund Manager’s Report for the financial
year for which the financial statements are prepared is consistent with the
financial statements.
Other matters on which we are required
to report by exception
Propriety of accounting records and information and explanations
received
Under the Collective Investment Schemes sourcebook we are required to report
to you if, in our opinion:
– proper accounting records have not been kept; or
– the financial statements are not in agreement with the accounting records and
returns.
We have no exceptions to report arising from this responsibility.
Responsibilities for the financial statements
and the audit
Our responsibilities and those of the Authorised Fund Manager
As explained more fully in the Authorised Fund Manager’s Responsibilities
Statement set out on page 7, the Authorised Fund Manager is responsible for
the preparation of the financial statements and for being satisfied that they give a
true and fair view.
Our responsibility is to audit and express an opinion on the financial statements
in accordance with applicable law and ISAs (UK & Ireland). Those standards
require us to comply with the Auditing Practices Board’s Ethical Standards for
Auditors.
This report, including the opinions, has been prepared for and only for the fund’s
unitholders as a body in accordance with paragraph 4.5.12 of the Collective
Investment Schemes sourcebook and for no other purpose.
We do not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
10
Schroder Global Equity Income Fund
Independent Auditors’ Report to the
Unitholders of Schroder Global Equity
Income Fund (continued)
What an audit of financial statements involves
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) (ISAs (UK & Ireland)). An audit involves obtaining evidence about
the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an assessment of:
– whether the accounting policies are appropriate to the fund’s circumstances
and have been consistently applied and adequately disclosed;
– the reasonableness of significant accounting estimates made by the
Authorised Fund Manager; and
– the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the Authorised Fund
Manager’s judgements against available evidence, forming our own judgements,
and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques,
to the extent we consider necessary to provide a reasonable basis for us to draw
conclusions. We obtain audit evidence through testing the effectiveness of
controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Final
Report and Accounts (the “Annual Report”) to identify material inconsistencies
with the audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent with, the
knowledge acquired by us in the course of performing the audit. If we become
aware of any apparent material misstatements or inconsistencies we consider
the implications for our report.
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Edinburgh
1 September 2016
(a) The maintenance and integrity of the Schroders website is the responsibility
of the Authorised Fund Manager; the work carried out by the auditors does
not involve consideration of these matters and, accordingly, the auditors
accept no responsibility for any changes that may have occurred to the
financial statements since they were initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
11
Schroder Global Equity Income Fund
Comparative Tables
A Income units
Financial year to 15 July
2016
p per unit
2015
p per unit
2014
p per unit
Change in net asset value
Opening net asset value
53.35
48.42
48.44
Return before operating charges
6.21
7.38
2.27
Operating charges
(0.87)
(0.91)
(0.82)
Return after operating charges*
5.34
6.47
1.45
1
Distributions
Closing net asset value
*after direct transaction costs of
(1.81)
(1.54)
(1.47)
56.88
53.35
48.42
(0.05)
(0.08)
(0.06)
10.01
13.36
2.99
Performance
Return after charges (%)
Other information
Closing net asset value (£000’s)
6,411
13,226
18,243
11,270,365
24,793,354
37,679,677
Operating charges (%)
1.70
1.71
1.70
Direct transaction costs (%)**
0.09
0.15
0.12
Highest dealing price (p)
58.38
59.39
50.63
Lowest dealing price (p)
46.53
47.23
46.18
Closing number of units
Prices
12
Schroder Global Equity Income Fund
Comparative Tables (continued)
A Accumulation units
Financial year to 15 July
2016
p per unit
2015
p per unit
2014
p per unit
Change in net asset value
Opening net asset value
73.02
64.40
62.52
Return before operating charges
8.69
9.84
2.95
Operating charges
(1.20)
(1.22)
(1.07)
Return after operating charges*
7.49
8.62
1.88
Closing net asset value
80.51
73.02
64.40
Retained distributions1
2.50
2.06
1.91
*after direct transaction costs of
(0.06)
(0.11)
(0.08)
10.26
13.39
3.01
Performance
Return after charges (%)
Other information
Closing net asset value (£000’s)
25,839
40,839
46,771
32,093,323
55,925,802
72,622,595
Operating charges (%)
1.70
1.71
1.70
Direct transaction costs (%)**
0.09
0.15
0.12
Highest dealing price (p)
80.93
79.77
65.98
Lowest dealing price (p)
64.51
62.83
59.61
Closing number of units
Prices
13
Schroder Global Equity Income Fund
Comparative Tables (continued)
L Income units
Financial year to 15 July
2016
p per unit
2015
p per unit
2014
p per unit
Change in net asset value
Opening net asset value
58.66
52.79
50.00
Return before operating charges
6.92
8.09
4.54
Operating charges
(0.50)
(0.53)
(0.40)
Return after operating charges*
6.42
7.56
4.14
1
Distributions
Closing net asset value
*after direct transaction costs of
(2.00)
(1.69)
(1.35)
63.08
58.66
52.79
(0.05)
(0.09)
(0.07)
10.94
14.32
8.28
Performance
Return after charges (%)
Other information
Closing net asset value (£000’s)
16,368
2,438
711
25,949,097
4,158,360
1,346,118
Operating charges (%)
0.87
0.88
0.73
Direct transaction costs (%)**
0.09
0.15
0.12
Highest dealing price (p)
64.74
65.16
55.42
Lowest dealing price (p)
51.42
51.62
50.00
Closing number of units
Prices
The unit class was launched on 1 October 2013.
14
Schroder Global Equity Income Fund
Comparative Tables (continued)
L Accumulation units
Financial year to 15 July
2016
p per unit
2015
p per unit
2014
p per unit
Change in net asset value
Opening net asset value
61.90
54.14
50.00
Return before operating charges
7.44
8.31
4.54
Operating charges
(0.53)
(0.55)
(0.40)
Return after operating charges*
6.91
7.76
4.14
Closing net asset value
68.81
61.90
54.14
Retained distributions1
2.13
1.74
1.35
*after direct transaction costs of
(0.05)
(0.09)
(0.07)
11.16
14.33
8.28
Performance
Return after charges (%)
Other information
Closing net asset value (£000’s)
20,638
10,618
1,850
29,991,556
17,153,945
3,417,182
Operating charges (%)
0.87
0.88
0.73
Direct transaction costs (%)**
0.09
0.15
0.12
Highest dealing price (p)
69.17
67.48
55.42
Lowest dealing price (p)
54.94
52.93
50.00
Closing number of units
Prices
The unit class was launched on 1 October 2013.
15
Schroder Global Equity Income Fund
Comparative Tables (continued)
Z Income units
Financial year to 15 July
2016
p per unit
2015
p per unit
2014
p per unit
Change in net asset value
Opening net asset value
72.30
65.12
64.65
Return before operating charges
8.51
9.96
3.07
Operating charges
(0.66)
(0.70)
(0.62)
Return after operating charges*
7.85
9.26
2.45
1
Distributions
Closing net asset value
*after direct transaction costs of
(2.47)
(2.08)
(1.98)
77.68
72.30
65.12
(0.06)
(0.11)
(0.08)
10.86
14.22
3.79
Performance
Return after charges (%)
Other information
Closing net asset value (£000’s)
45,689
32,083
9,965
58,817,065
44,376,381
15,305,374
Operating charges (%)
0.95
0.96
0.95
Direct transaction costs (%)**
0.09
0.15
0.12
Highest dealing price (p)
79.73
80.33
68.04
Lowest dealing price (p)
63.34
63.65
61.70
Closing number of units
Prices
16
Schroder Global Equity Income Fund
Comparative Tables (continued)
Z Accumulation units
Financial year to 15 July
2016
p per unit
2015
p per unit
2014
p per unit
Change in net asset value
Opening net asset value
81.38
71.23
68.63
Return before operating charges
9.77
10.92
3.26
Operating charges
(0.75)
(0.77)
(0.66)
Return after operating charges*
9.02
10.15
2.60
Closing net asset value
90.40
81.38
71.23
Retained distributions1
2.80
2.29
2.11
*after direct transaction costs of
(0.07)
(0.12)
(0.08)
11.08
14.25
3.79
Performance
Return after charges (%)
Other information
Closing net asset value (£000’s)
34,051
25,127
11,040
37,664,791
30,876,666
15,497,820
Operating charges (%)
0.95
0.96
0.95
Direct transaction costs (%)**
0.09
0.15
0.12
Highest dealing price (p)
90.88
88.73
72.92
Lowest dealing price (p)
72.20
69.62
65.50
Closing number of units
Prices
1 These figures have been rounded to 2 decimal places.
** Direct transaction costs have been stated after deducting the proportion of
the amounts collected from dilution adjustments.
Please remember that past performance is not a guide to future performance
and it might not be repeated. The value of investments and the revenue from
them may go down as well as up and investors may not get back the amount
originally invested. Because of this, you are not certain to make a profit on your
investments and you may lose money.
17
Schroder Global Equity Income Fund
Portfolio Statement
Holding at Market Value
15.7.16
£000’s
% of net
assets
Asia
Hong Kong 5.34%
(2015 – 5.38%)
CNOOC
2,522,000
2,416
1.62
Luk Fook Holdings International
1,143,000
2,114
1.42
NWS Holdings
2,706,000
3,359
2.25
SJM Holdings
144,000
67
0.05
7,956
5.34
2,122
1.42
2,122
1.42
6,011
4.03
6,011
4.03
3,136
2.11
3,136
2.11
6,512
4.37
6,512
4.37
3,450
2.32
3,450
2.32
Japan 1.42%
(2015 – 0.00%)
Fuji Media Holdings
223,400
Singapore 0.00%
(2015 – 1.56%)
South Korea 4.03%
(2015 – 1.85%)
Samsung Electronics Preference
7,357
United Arab Emirates 2.11%
(2015 – 0.00%)
Aldar Properties
5,603,298
Europe
Belgium 4.37%
(2015 – 5.04%)
Ageas
255,797
Finland 2.32%
(2015 – 0.00%)
Fortum
18
275,669
Schroder Global Equity Income Fund
Portfolio Statement (continued)
Holding at Market Value
15.7.16
£000’s
% of net
assets
France 5.02%
(2015 – 8.55%)
Alstom
95,292
1,745
1.17
BNP Paribas
42,405
1,518
1.02
Cie de Saint-Gobain
82,044
2,488
1.67
Sanofi
27,368
1,731
1.16
7,482
5.02
29,377
1,435
0.96
309,951
4,007
2.69
5,442
3.65
3,117
2.09
3,117
2.09
2,498
1.68
2,498
1.68
Germany 3.65%
(2015 – 4.66%)
Daimler
Deutsche Telekom
Italy 2.09%
(2015 – 1.76%)
Eni
253,296
Netherlands 1.68%
(2015 – 3.24%)
Wolters Kluwer
79,902
Norway 1.50%
(2015 – 1.78%)
DNB
265,795
2,229
1.50
2,229
1.50
4,278
2.87
4,278
2.87
1,939,858
4,567
3.07
177,922
2,935
1.97
996,360
4,775
3.20
1,156,092
2,180
1.46
Spain 2.87%
(2015 – 3.89%)
Endesa
281,235
United Kingdom 15.76%
(2015 – 19.30%)
Centrica
GlaxoSmithKline
HSBC Holdings
Legal & General Group
19
Schroder Global Equity Income Fund
Portfolio Statement (continued)
Holding at Market Value
15.7.16
£000’s
% of net
assets
United Kingdom (continued)
Pearson
Tesco
466,228
2,739,943
4,483
3.01
4,544
3.05
23,484
15.76
3,988
1,585
1.07
257,200
2,015
1.35
3,600
2.42
North America
Canada 2.42%
(2015 – 3.52%)
Fairfax Financial Holdings
Fairfax India Holdings
United States 40.80%
(2015 – 34.25%)
American International Group
96,723
3,965
2.66
Apollo Education Group
365,094
2,499
1.68
BGC Partners
381,751
2,550
1.71
Cisco Systems
311,491
6,984
4.69
Gap
138,234
2,424
1.63
6,770
2,593
1.74
Guess?
112,660
1,306
0.88
Intel
239,484
6,325
4.24
Graham Holdings
International Business Machines
20,273
2,438
1.64
JPMorgan Chase
105,262
5,064
3.40
Kulicke & Soffa Industries
283,115
2,689
1.80
Leucadia National
109,694
1,469
0.99
Michael Kors Holdings
58,263
2,271
1.52
105,070
4,233
2.84
68,907
1,910
1.28
Staples
700,228
4,767
3.20
Symantec
115,766
1,831
1.23
Time
129,113
1,590
1.07
Vishay Intertechnology
242,059
2,301
1.54
44,265
1,588
1.06
60,797
40.80
1,872
1.26
1,872
1.26
Microsoft
Pfizer
Wells Fargo
South America
Brazil 1.26%
(2015 – 1.00%)
AES Tiete Energia
20
519,005
Schroder Global Equity Income Fund
Portfolio Statement (continued)
Holding at Market Value
15.7.16
£000’s
% of net
assets
US Dollar Denominated Derivatives 0.78%
(2015 – 0.37%)
Forward to buy US$22,267,192
for €19,621,000
US$22,267,192
273
0.18
Forward to buy US$15,611,939
for £10,777,000
US$15,611,939
893
0.60
1,166
0.78
145,152
97.42
3,844
2.58
148,996
100.00
Portfolio of investments
Net other assets
Net assets attributable to unitholders
Unless otherwise stated the above securities are ordinary shares or common
stock and admitted to official stock exchange listings.
21
Schroder Global Equity Income Fund
Summary of Portfolio Transactions
Largest purchases
Largest sales
22
For the year ended 15 July 2016
Cost
£000’s
Pearson
4,005
Fortum
2,846
Samsung Electronics Preference
2,686
SJM Holdings
2,490
Aldar Properties
2,417
BGC Partners
2,406
Gap
2,293
International Business Machines
2,012
Fuji Media Holdings
1,782
Cisco Systems
1,716
For the year ended 15 July 2016
Proceeds
£000’s
Direct Line Insurance Group
4,754
Coach
2,783
Fairfax Financial Holdings
2,608
Philip Morris International
2,586
Vinci
2,383
Deutsche Telekom
2,264
Microsoft
1,983
Pfizer
1,834
Alstom
1,776
SJM Holdings
1,770
Schroder Global Equity Income Fund
Statement of Total Return
For the year ended 15 July 2016
Restated1
2015
2016
Notes
£000’s
£000’s
£000’s
£000’s
Income
Net capital gains
2
Revenue
3
4,823
3,348
4
(1,484)
(1,441)
3,339
1,907
(333)
(280)
Expenses
Net revenue before taxation
Taxation
5
12,202
Net revenue after taxation
Total return before
distributions
Distributions
6
Change in net assets
attributable to unitholders
from investment activities
10,486
3,006
1,627
15,208
12,113
(4,487)
(3,065)
10,721
9,048
Statement of Change in Net Assets
Attributable to Unitholders
For the year ended 15 July 2016
Restated2
2015
2016
£000’s
Opening net assets
attributable to unitholders
£000’s
124,331
Amounts receivable
on issue of units
31,825
Amounts payable on
cancellation of units
(20,519)
Closing net assets
attributable to unitholders
88,580
(19,788)
11,306
24,641
24
16
0
(1)
10,721
9,048
2,614
2,047
148,996
124,331
Stamp duty reserve tax
Retained distribution on
Accumulation units
£000’s
44,429
Dilution adjustment
Change in net assets
attributable to unitholders
from investment activities
£000’s
1 Refer to the Notes to the Accounts on page 25.
2 Refer to the Notes to the Accounts on page 26.
23
Schroder Global Equity Income Fund
Balance Sheet
As at 15 July 2016
Notes
2016
2015
£000’s
£000’s
145,152
119,548
Assets
Investments
Current assets
Debtors
8
1,422
4,745
Cash and bank balances
9
4,723
2,353
151,297
126,646
Total assets
Liabilities
Creditors
Distributions payable
Other creditors
Total liabilities
Net assets attributable
to unitholders
24
10
(1,438)
(907)
(863)
(1,408)
(2,301)
(2,315)
148,996
124,331
Schroder Global Equity Income Fund
Notes to the Accounts
1 Accounting
policies
Basis of preparation
The accounts have been prepared under the historical cost basis, as
modified by the revaluation of investments, and in accordance with
the SORP for UK Authorised Funds issued by the IMA in May 2014
(SORP 2014), which supersedes the SORP issued by the IMA in
October 2010 (SORP 2010) and in accordance with United Kingdom
Generally Accepted Accounting Practice, including Financial Reporting
Standard 102 (The Financial Reporting Standard Applicable in the UK and
Republic of Ireland (FRS 102)). Both of which became effective for the
accounting periods commencing on or after 1 January 2015.
There have been no changes to the financial position or financial performance of
the fund as a result of the above, however, as a result of the above changes certain
comparative items have been restated in the Report and Accounts.
Statement of Total Return
For the years ended 15 July 2016 and 15 July 2015 Interest payable of £2,500
and £1,852, respectively, is now included within Expenses, under SORP 2010 it
was disclosed under Finance costs: Interest now renamed Distributions under
SORP 2014.
Revenue
Dividends receivable from equity investments are recognised net of attributable
tax credits and are credited to revenue when they are first quoted ex-dividend.
Interest receivable from bank balances and is accounted for on an accruals
basis.
Special dividends
Special dividends are treated as revenue or capital depending on the facts of
each particular case.
Expenses
Stamp duty reserve tax and costs associated with the purchase and sale of
investments are allocated to the capital of the fund. All other expenses are initially
charged to revenue but ultimately borne by the capital of the fund.
Taxation
Corporation tax is provided for on the revenue liable to corporation tax less
deductible expenses. The tax effect of different items of revenue or expenses is
allocated between revenue and capital using the marginal basis.
25
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
Deferred taxation is provided for on all timing differences that have originated but
not reversed by the balance sheet date, other than those differences regarded as
permanent. Any liability to deferred taxation is provided for at the average rate of
taxation expected to apply. Deferred tax assets and liabilities are not discounted
to reflect the time value of money.
Distributions
The revenue available for distribution is the total revenue earned by the fund,
less deductible expenses and taxation charged to revenue. This revenue is
distributed annually on 15 September to Income unitholders. An interim
distribution, based on available revenue at the half year, is distributed on
15 March to Income unitholders. For Accumulation units this revenue is not
distributed but automatically reinvested in the fund and is reflected in the value of
these units.
Dilution adjustment
In certain circumstances the Manager may apply a dilution adjustment on
subscriptions redemptions of units. If applied, the dilution adjustment is paid
to the fund. See Prospectus for further details.
For the years ended 15 July 2016 and 15 July 2015 the Dilution adjustments of
£23,947 and £16,125, respectively, are shown separately in the Statement of
Change in Net Assets Attributable to Unitholders, previously they were included
within Amounts receivable on issue of units and Amounts payable on
cancellation of units in the Statement of Change in Net Assets Attributable to
Unitholders. This is a change in presentation, there have been no changes to the
financial position or financial performance of the fund as a result of the above.
Valuation
Listed investments of the fund have been valued at market value at 18:00 on
the balance sheet date. Market value is defined by the SORP as fair value which
generally is the bid value of each security and offer value for short positions.
Forward foreign exchange contracts
Open forward foreign exchange contracts are shown in the Portfolio Statement
at market value and the net gains are reflected under Net capital gains in the
Notes to the Accounts.
Foreign currencies
Transactions in foreign currencies are translated into sterling at the exchange rate
prevailing on the date of the transaction. Assets and liabilities valued in foreign
currencies have been translated into sterling at the exchange rates prevailing at
the balance sheet date and the net gains/(losses) are reflected under Net capital
gains in the Notes to the Accounts.
26
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
2 Net capital gains
The net capital gains during the year comprise:
Non-derivative securities
Forward foreign exchange contracts
Foreign currency gains/(losses)
2016
£000’s
2015
£000’s
10,565
6,440
1,274
4,151
373
(95)
(10)
(10)
12,202
10,486
2016
£000’s
2015
£000’s
UK dividends
1,026
723
Overseas dividends
3,788
2,615
9
10
4,823
3,348
Transaction costs
Net capital gains
3 Revenue
Bank interest
Total revenue
4 Expenses
2016
£000’s
Restated*
2015
£000’s
Payable to the Manager, associates of the
Manager and agents of either of them:
Annual management charge
1,243
1,227
192
156
1,435
1,383
Trustee’s fees
14
11
Safe custody fees
10
7
Administration charge
Payable to the Trustee, associates of the
Trustee and agents of either of them:
Interest payable
2
2
26
20
12
11
Other expenses:
Audit fee
Professional fee
Total expenses
11
27
23
38
1,484
1,441
27
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
5 Taxation
(a) Analysis of the tax charge for the year
2016
£000’s
2015
£000’s
Overseas withholding tax
333
280
Total current tax (Note 5(b))
333
280
Corporation tax has not been provided for as expenses exceed the revenue
liable to corporation tax.
(b) Factors affecting the current tax charge for the year
The tax assessed for the year is different from that calculated when the standard
rate of corporation tax for authorised unit trusts of 20% (2015 – 20%) is applied
to the net revenue before taxation. The differences are explained below.
Net revenue before taxation
Net revenue for the year before taxation multiplied
by the standard rate of corporation tax
2016
£000’s
2015
£000’s
3,339
1,907
668
381
(963)
(667)
2
4
293
282
Effects of:
Revenue not subject to corporation tax
Expenses not deductible for tax purposes
Movement in excess management expenses
Irrecoverable overseas withholding tax
333
280
Current tax charge for the year (Note 5(a))
333
280
(c) Factors that may affect future tax charges
At the balance sheet date, there is a potential deferred tax asset of £1,556,314
(2015 – £1,263,447) in respect of unutilised management expenses. It is unlikely
the fund will generate sufficient taxable profits in the future to utilise this amount
and therefore no deferred tax asset has been recognised in the year or prior year.
28
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
6 Distributions
Distributions
The distributions take account of revenue received on the issue of units and
revenue deducted on the cancellation of units, and comprise:
2016
£000’s
Restated*
2015
£000’s
Interim Dividend distribution
1,554
1,009
Final Dividend distribution
3,095
2,335
4,649
3,344
Add: Revenue deducted on cancellation of units
199
114
Deduct: Revenue received on issue of units
(361)
(393)
Distributions
4,487
3,065
Net revenue after taxation
3,006
1,627
Expenses taken to capital
1,482
1,439
Tax on capital items
Distributions
(1)
(1)
4,487
3,065
Details of the distributions per unit are set out in the Distribution Table on
pages 40 and 41.
7 Fair value
hierarchy
Valuation technique
Quoted prices for identical instruments in active markets
Valuation techniques using observable market data
Total
8 Debtors
2016
Assets
£000’s
2015
Assets
£000’s
143,986
119,091
1,166
457
145,152
119,548
2016
£000’s
2015
£000’s
Amounts receivable for issue of units
163
981
Sales awaiting settlement
735
3,093
Accrued overseas dividends
149
368
Overseas withholding tax recoverable
375
303
1,422
4,745
Total debtors
29
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
9 Cash and bank
balances
2016
£000’s
2015
£000’s
4,723
2,352
0
1
4,723
2,353
Cash and bank balances
Amounts held at futures clearing houses and brokers
Total cash and bank balances
10 Other creditors
2016
£000’s
2015
£000’s
£000’s
£000’s
Amounts payable for cancellation of units
444
143
Purchases awaiting settlement
223
1,193
Accrued expenses
Manager and Agents
Annual management charge
Administration charge
152
49
26
7
178
56
Trustee and Agents
Trustee’s fees
2
2
Safe custody fees
3
1
Transaction costs
1
2
Other accrued expenses
Total other creditors
6
5
12
11
863
1,408
11 Contingent
liabilities
There were no contingent liabilities at the balance sheet date (2015 – Nil).
12 Related party
transactions
The Manager exercises control over the fund and is therefore a related party by
virtue of its controlling influence.
Amounts paid during the year or due to the Manager at the balance sheet date
are disclosed under Expenses and Other creditors in the Notes to the Accounts.
The Manager acts as principal on all transactions of units in the fund. The
aggregate monies received through the issue and cancellation of units are
disclosed in the Statement of Change in Net Assets Attributable to
Unitholders and Distributions in the Notes to the Accounts. Amounts due from or
to the Manager in respect of unit transactions at the balance sheet date are
disclosed under Debtors and Other creditors in the Notes to the Accounts.
30
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
Units held or managed by the Manager or associates of the Manager as a
percentage of the fund’s net asset value at the balance sheet date were 9.96%
(2015 – 1.66%).
13 Unit classes
The fund currently has six unit classes: A Income units, A Accumulation units,
L Income units, L Accumulation units, Z Income units and Z Accumulation units.
The annual management charge is based on the average value of the fund,
calculated on a daily basis, and covers the remuneration of the Manager, the
Investment Adviser and their overhead expenses and for each unit class is as
follows:
A Income units
A Accumulation units
L Income units
L Accumulation units
Z Income units
Z Accumulation units
1.50%
1.50%
0.675%
0.675%
0.75%
0.75%
The closing net asset value of each unit class, the closing net asset value per
unit and the closing number of units in issue are given in the Comparative Tables
on pages 12 to 17. The distributions per unit class are given in the Distribution
Table on pages 40 to 41. All classes have the same rights on winding up.
14 Derivative and
other financial
instruments
In accordance with the investment objective, the fund may hold certain financial
instruments. These comprise:
– securities held in accordance with the investment objective and policy;
– cash and short term debtors and creditors arising directly from operations.
Under normal circumstances, the Manager would expect substantially all of
the assets of the fund to be invested in securities appropriate to the fund’s
investment objective. Cash and near cash may only be held in order to assist in
the redemption of units, the efficient management of the fund or purposes
regarded as ancillary to the fund.
The fund has little exposure to credit risk. The main risks arising from the fund’s
financial instruments are market price, foreign currency, liquidity and interest rate
risks. The Manager’s policies for managing these risks are summarised below
and have been applied throughout the year and the prior year.
31
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
Market price risk
The fund’s investment portfolio is exposed to market price fluctuations which are
monitored by the Manager in pursuance of the investment objective and policy.
Adherence to investment guidelines and to investment and borrowing powers set
out in the Trust Deed, the Prospectus and in the COLL mitigates the risk of
excessive exposure to any particular type of security or issuer.
Foreign currency risk
The fund invests in overseas securities and the balance sheet can be significantly
affected by movements in foreign exchange rates. The Manager seeks to manage
exposure to currency movements by using forward foreign exchange contracts.
Revenue received in other currencies is translated to sterling on or near the date
of receipt. The fund does not hedge or otherwise seek to avoid currency
movement risk on accrued revenue.
Currency risk profile
The currency risk profile of the fund’s net assets and liabilities at the balance
sheet date was as follows:
Monetary
exposure
£000’s
Non-monetary
exposure
£000’s
Total
£000’s
2016
0
3,136
3,136
2015
0
0
0
2016
0
1,872
1,872
2015
0
1,239
1,239
2016
0
1,585
1,585
2015
0
2,866
2,866
2016
(15,970)
32,779
16,809
2015
23,125
33,756
56,881
Currency
United Arab Emirates dirham
Brazilian real
Canadian dollar
Euro
Hong Kong dollar
2016
52
7,956
8,008
2015
0
6,687
6,687
2016
0
2,122
2,122
2015
0
0
0
Japanese yen
32
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
Monetary
exposure
£000’s
Non-monetary
exposure
£000’s
Total
£000’s
2016
14
2,229
2,243
2015
0
2,214
2,214
2016
0
0
0
2015
0
1,945
1,945
2016
0
6,011
6,011
2015
(38)
2,298
2,260
2016
(12,600)
23,484
10,884
2015
854
23,996
24,850
2016
4
0
4
2015
6
0
6
2016
0
0
0
2015
21
0
21
2016
33,510
62,812
96,322
2015
(18,728)
44,090
25,362
Currency
Norwegian krone
Singapore dollar
South Korean won
Sterling
Swedish krona
Swiss franc
US dollar
Liquidity risk
The primary source of this risk to the fund is the liability to unitholders for any
cancellation of units. This risk is minimised by holding cash, readily realisable
securities and access to overdraft facilities up to the amount prescribed by the
COLL.
Interest rate risk
Interest receivable on bank balances and receivable or payable on amounts held
or overdrawn at futures clearing houses and brokers will be affected by
fluctuations in interest rates.
33
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
Interest rate risk profile of financial assets and financial liabilities
The interest rate risk profile of financial assets and liabilities at the balance sheet
date was as follows:
Floating rate
financial assets
£000’s
Financial assets
not carrying
interest
£000’s
Total
£000’s
2016
0
3,136
3,136
2015
0
0
0
2016
0
1,872
1,872
2015
0
1,239
1,239
2016
0
1,585
1,585
2015
0
2,866
2,866
2016
43
33,138
33,181
2015
9
59,514
59,523
2016
0
8,068
8,068
2015
273
6,687
6,960
2016
223
2,122
2,345
2015
0
0
0
2016
0
2,243
2,243
2015
0
2,214
2,214
2016
0
0
0
2015
138
1,945
2,083
2016
0
6,559
6,559
2015
0
2,299
2,299
2016
93
23,645
23,738
2015
1,053
25,310
26,363
2016
0
4
4
2015
0
6
6
2016
0
0
0
2015
0
21
21
Currency
United Arab Emirates dirham
Brazilian real
Canadian dollar
Euro
Hong Kong dollar
Japanese yen
Norwegian krone
Singapore dollar
South Korean won
Sterling
Swedish krona
Swiss franc
34
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
Floating rate
financial assets
£000’s
Financial assets
not carrying
interest
£000’s
Total
£000’s
2016
4,972
91,350
96,322
2015
3,489
47,091
50,580
Floating rate
financial
liabilities
£000’s
Financial
liabilities not
carrying interest
£000’s
Total
£000’s
2016
0
16,372
16,372
2015
2,598
44
2,642
2016
60
0
60
2015
0
273
273
2016
0
223
223
2015
0
0
0
Currency
US dollar
Currency
Euro
Hong Kong dollar
Japanese yen
Singapore dollar
2016
0
0
0
2015
2
136
138
2016
548
0
548
2015
0
39
39
2016
0
12,854
12,854
2015
0
1,513
1,513
2016
0
0
0
2015
9
25,209
25,218
South Korean won
Sterling
US dollar
There are no material amounts of non-interest bearing financial assets, other
than equities, which do not have a maturity date.
Floating rate financial assets and financial liabilities
Sterling denominated bank balances bear interest at rates based on the Sterling
Overnight Index Average rate. Foreign currency bank balances bear interest at
rates based on the London Interbank Offer Rate or its international equivalent.
35
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
Fair value of financial assets and financial liabilities
There is no material difference between the value of the financial assets and
liabilities, as shown in the balance sheet, and their fair value.
Derivatives
During the year the fund entered into derivative contracts for the efficient
management of the fund. The aim of any derivative or forward used for such
reasons is not to materially alter the risk profile of the fund, rather their use is to
assist the Manager in meeting the investment objective of the fund.
Leverage
Information on the limit usage and level of leverage
The level of leverage is an indication of the derivative usage and of any leverage
generated by the reinvestment of cash received as collateral when using efficient
portfolio management techniques. It does not take into account other physical
assets directly held in the portfolio of the fund. The figure is not representative of
the maximum amount that a fund could lose, as it includes the derivatives used
to protect the Net Asset Value of a fund as well as the derivatives backed by risk
free assets and derivatives which do not generate any financial exposure,
leverage or market risk from an economic perspective. The reported leverage
figure is therefore not a true representation of the economic leverage1 in the fund.
The level of leverage disclosed is based on the total notional value2 of all
derivative instruments held by a fund and is expressed as a percentage of the
fund’s Net Asset Value. For the purpose of this calculation the holdings and offset
derivative positions (long and short positions) do not cancel each other out and
the figure is a sum of the total holdings (excepts for forwards used for currency
hedging purposes).
Leverage
Lowest
Highest
Average
Leverage
at 15.7.16
13.15%
25.69%
19.62%
19.31%
2016
1 Where economic leverage is the sum of derivative commitments (calculated in
line with ESMA (European Securities and Markets Authority) 10/788) and
excludes derivatives used within hedging arrangements, derivatives whose
commitments is covered by risk free assets and derivatives which are not
considered to generate any incremental exposure and leverage or market risk.
2 Delta adjusted in line with ESMA 10/788 when appropriate.
3 Average leverage is calculated as the sum of the net asset value and the
incremental exposure generated through the use of derivatives (calculated in
accordance with the commitment approach (CESR/10-788)) divided by the
net asset value.
36
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
15 Direct
transaction
costs
In the case of shares, broker commissions and transfer taxes/stamp duty are paid
by the fund on each transaction. In addition, there is a dealing spread between
buying and selling prices of the underlying investments. Unlike shares, other types
of investments (such as bonds, money market instruments, derivatives)
have no separately identifiable transaction costs; these costs form part of the
dealing spread. Dealing spreads vary considerably depending on the transaction
value and market sentiment.
2016
Principal Commissions
£000’s
£000’s
Taxes
£000’s
Total cost
£000’s
Commissions
% of
principal
Taxes
% of
principal
0.06
0.10
(0.06)
(0.02)
Purchases
Equities
56,141
34
55
56,230
56,141
34
55
56,230
41,773
(23)
(8)
41,742
41,773
(23)
(8)
41,742
0.04
0.05
Principal Commissions
£000’s
£000’s
Taxes
£000’s
Total cost
£000’s
Commissions
% of
principal
Taxes
% of
principal
0.05
0.12
(0.05)
(0.00)
Sales
Equities
Total cost of the
fund’s average
net asset value (%)
2015
Purchases
Equities
74,480
40
86
74,606
74,480
40
86
74,606
45,799
(24)
(1)
45,774
45,799
(24)
(1)
45,774
0.07
0.08
Sales
Equities
Total cost of the
fund’s average
net asset value (%)
Average portfolio dealing spread
As at the balance sheet date the average portfolio dealing spread was 0.17%
(2015 – 0.10%, based on close of business prices).
This spread represents the difference between the values determined
respectively by reference to the bid and offer prices of investments expressed as
a percentage of the value determined by reference to the offer price.
37
Schroder Global Equity Income Fund
Notes to the Accounts (continued)
Number
of units
in issue as
at 15.7.15
16 Units in issue
reconciliation
Number
of units
issued
Number
of units
cancelled
Number
of units
converted
Number
of units
in issue as
at 15.7.16
A Income units
24,793,354
1,140,291 (2,996,434) (11,666,846) 11,270,365
A Accumulation units
55,925,802
2,399,022 (6,942,589) (19,288,912) 32,093,323
L Income units
L Accumulation units
4,158,360 22,614,426 (1,343,571)
17,153,945
519,882 25,949,097
5,423,655 (6,550,728) 13,964,684 29,991,556
Z Income units
44,376,381 10,069,205 (3,870,593) 8,242,072 58,817,065
Z Accumulation units
30,876,666
8,499,066 (8,263,482) 6,552,541 37,664,791
* Refer to the Notes to the Accounts on page 25.
17 Post balance
sheet events
As a result of the Brexit vote on 23 June 2016, it is anticipated that there will be
some uncertainty and potential volatility in the markets. This may affect the
performance of the unit classes.
At the date of signing of the Report and Accounts, the prices of the unit classes
have not been significantly impacted.
38
Schroder Global Equity Income Fund
Remuneration
Quantitative Remuneration Disclosures
Quantitative remuneration disclosures required under the UCITS Directive will be
available from Q1 2018, following the conclusion of this performance period, as
prior to that date the information available will not provide materially relevant and
clear information to investors about how the remuneration policy of Schroder
Unit Trusts Limited (the Manager) operates in line with the requirements of the
UCITS Directive.
39
Schroder Global Equity Income Fund
Distribution Table
Interim distribution
for the six
months ended
15 January 2016
Group 1 Units purchased prior to 16 July 2015
Group 2 Units purchased on or after 16 July 2015
Net
revenue
2016
p per unit
Equalisation
2016
p per unit
Distribution
paid
15.3.16
p per unit
Distribution
paid
15.3.15
p per unit
Group 1
0.6126
–
0.6126
0.5257
Group 2
0.1888
0.4238
0.6126
0.5257
Group 1
0.8422
–
0.8422
0.6980
Group 2
0.4232
0.4190
0.8422
0.6980
Group 1
0.6787
–
0.6787
0.5763
Group 2
0.3148
0.3639
0.6787
0.5763
A Income units
A Accumulation units
L Income units
L Accumulation units
Group 1
0.7173
–
0.7173
0.5906
Group 2
0.3201
0.3972
0.7173
0.5906
Group 1
0.8367
–
0.8367
0.7099
Group 2
0.3683
0.4684
0.8367
0.7099
Group 1
0.9442
–
0.9442
0.7761
Group 2
0.4516
0.4926
0.9442
0.7761
Z Income units
Z Accumulation units
40
Schroder Global Equity Income Fund
Distribution Table (continued)
Final distribution
for the six months
ended 15 July 2016
Group 1 Units purchased prior to 16 January 2016
Group 2 Units purchased on or after 16 January 2016
Net
revenue
2016
p per unit
Equalisation
2016
p per unit
Distribution
payable
15.9.16
p per unit
Distribution
paid
15.9.15
p per unit
Group 1
1.1965
–
1.1965
1.0144
Group 2
0.4998
0.6967
1.1965
1.0144
Group 1
1.6588
–
1.6588
1.3626
Group 2
0.9790
0.6798
1.6588
1.3626
Group 1
1.3245
–
1.3245
1.1132
Group 2
0.2849
1.0396
1.3245
1.1132
A Income units
A Accumulation units
L Income units
L Accumulation units
Group 1
1.4152
–
1.4152
1.1527
Group 2
0.6753
0.7399
1.4152
1.1527
Group 1
1.6313
–
1.6313
1.3722
Group 2
1.0669
0.5644
1.6313
1.3722
Group 1
1.8595
–
1.8595
1.5158
Group 2
1.2110
0.6485
1.8595
1.5158
Z Income units
Z Accumulation units
Corporate
unitholders
(unaudited)
Equalisation
Corporate unitholders receive the dividend distribution payments as detailed below:
100.00%
of the total distribution is received as franked investment income.
Equalisation applies to units purchased during the distribution period (Group 2
units). It is the average amount of revenue included in the purchase price of
Group 2 units and is refunded to the holders of these units as a return of capital.
Being capital it is not liable to income tax but must be deducted from the cost of
units for capital gains tax purposes.
41
Schroder Global Equity Income Fund
General Information
Manager
Schroder Unit Trusts Limited
31 Gresham Street
London EC2V 7QA
Authorised and regulated by
the Financial Conduct Authority
Registrar1
International Financial Data Services Limited
IFDS House
St Nicholas Lane
Basildon
Essex SS15 5FS
Investment Adviser
Schroder Investment Management Limited
31 Gresham Street
London EC2V 7QA
Authorised and regulated by
the Financial Conduct Authority
Administration Details
Schroders
FREEPOST
RLTZ-CHSY-HBUT
PO Box 1102
Chelmsford
Essex CM99 2XX
Investor Services
0800 718 777
[email protected]
Dealing 0800 718 788
Fax 0870 043 4080
Trustee
J.P. Morgan Europe Limited
Chaseside
Bournemouth BH7 7DA
Authorised by the Prudential
Regulation Authority and regulated
by the Financial Conduct Authority
and Prudential Regulation Authority
Independent Auditors
PricewaterhouseCoopers LLP
Atria One
144 Morrison Street
Edinburgh EH3 8EX
1 The Manager has delegated the function of Registrar to International Financial Data Services Limited.
Authorisation
The fund is an authorised unit trust and is constituted pursuant to the COLL
and is structured as a trust. The fund is a UCITS scheme for the purpose of the
categorisation of the COLL.
Other information
The Prospectus, the Key Investor Information Document and details of
investment charges and costs are available on request or can be downloaded
from our website www.schroders.co.uk.
42
For further literature please contact Schroder Investor Services
on 0800 718 777 or at [email protected], or visit
our website at www.schroders.co.uk.
Issued in September 2016 by Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA.
Registered No: 04191730 England. Authorised and regulated by the Financial Conduct Authority. w34377