Schroder
Global Equity Income Fund
Interim Short Report
16 July 2015 to 15 January 2016
Schroder Global Equity
Income Fund
Review of Investment Activities
From 15 July 2015 to 15 January 2016, the price of
A Accumulation units on a dealing price to dealing price basis fell
7.72%. In comparison, the MSCI World Index generated a
negative net total return of 5.36%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. By its nature, this is a long term approach and
performance should not be appraised over short time periods. The
period under review was a difficult one for value investors as value
continued to underperform growth, largely due to investors seeking
stability in the uncertain economic environment.
Office supplier Staples was a notable detractor from fund performance
over the six months. In December 2015, the US Federal Trade
Commission challenged the proposed merger with Office Depot. Our
investment case is not predicated on the deal taking place, although the
removal of a competitor would be beneficial. As a reminder, our
investment in Staples is driven by the view that the group offers
significant potential for capital and dividend growth on the basis of its
attractive valuation, robust balance sheet and strong cash generation.
We still see long term value in the firm. UK supermarket group Tesco
was another detractor amid signs of lacklustre trading early in the period,
although the group’s Christmas trading statement suggested that
management’s turnaround plan is starting to bear fruit. On the positive
side, some of our insurance holdings – such as Ageas and Direct Line
Insurance Group – have performed strongly.
The major strength of value investing is the disciplined focus on buying
attractively valued, out of favour companies at all stages in the
investment cycle. We seek to apply our approach consistently and whilst
an unemotional, valuation driven philosophy will not always be in favour,
over longer time periods this investment style has generated exceptional
returns.
Co-Fund
Manager:
Co-Fund
Manager:
Ian
Kelly
Jamie
Lowry
Schroder Global Equity Income Fund
Fund Information
Interim
Final
15 January
15 July
15 March
15 September
For the period
to 15.1.16
For the year
to 15.7.15
A Income units
1.69%1
1.71%
A Accumulation units
1.69%1
1.71%
L Income units
0.86%1
0.88%
L Accumulation units
0.86%1
0.88%
Z Income units
0.94%1
0.96%
Z Accumulation units
0.94%1
0.96%
Accounting dates
Revenue allocation dates
Ongoing charges figure
1 The Ongoing charges figure is annualised based on the fees incurred during the accounting period.
Performance Record
Net Asset
Value as at
15.1.16
pence per unit
Net Asset
Value as at
15.7.15
pence per unit
Net Asset
Value
% change
A Income units
47.88
53.35
(10.25)
A Accumulation units
66.39
73.02
(9.08)
L Income units
52.88
58.66
(9.85)
L Accumulation units
56.51
61.90
(8.71)
Z Income units
65.14
72.30
(9.90)
Z Accumulation units
74.27
81.38
(8.74)
Fund performance
3 months
6 months
5 years
Schroder Global Equity
Income Fund
(2.81)%
(7.72)%
38.14%
MSCI World Index
(1.57)%
(5.36)%
43.14%
Fund Source: A Accumulation units on a dealing price to dealing price basis to 15.1.16.
Index Source: Thomson Reuters Datastream, net total return in sterling terms to 15.1.16.
1 With effect from 1 January 2011, the benchmark changed to the MSCI World Index. Prior to this date the
benchmark was the MSCI All Country World Index. The full track record of the previous index has been kept and
chain linked to the new one.
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.
Schroder Global Equity Income Fund
Performance Record (continued)
Unit price range
Financial year to 15 July
A Income units
Lowest
Highest
dealing
dealing
p
p
A Accumulation units
Highest
Lowest
dealing
dealing
p
p
2013
50.38
39.50
63.71
49.52
2014
50.63
46.18
65.98
59.61
2015
59.39
47.23
79.77
62.83
Financial period to
15 January 2016
53.90
47.76
73.71
65.38
Financial year to 15 July
L Income units
Highest
Lowest
dealing
dealing
p
p
L Accumulation units
Highest
Lowest
dealing
dealing
p
p
2013
–
–
–
–
2014
55.42
50.00
55.42
50.00
2015
65.16
51.62
67.48
52.93
Financial period to
15 January 2016
59.27
52.57
62.48
55.47
Financial year to 15 July
Z Income units
Highest
Lowest
dealing
dealing
p
p
Z Accumulation units
Highest
Lowest
dealing
dealing
p
p
2013
67.16
52.37
69.86
53.99
2014
68.04
61.70
72.92
65.50
2015
80.33
63.65
88.73
69.62
Financial period to
15 January 2016
73.05
64.78
82.15
72.92
Performance Record (continued)
Net revenue
Financial year to 15 July
A Income units
pence per unit
A Accumulation units
pence per unit
2013
1.4054
1.7732
2014
1.4738
1.9147
2015
1.5401
2.0606
Financial period to 15 January 2016
0.6126
0.8422
L Income units
pence per unit
L Accumulation units
pence per unit
Financial year to 15 July
2013
–
–
2014
1.3465
1.3464
2015
1.6895
1.7433
Financial period to 15 January 2016
0.6787
0.7173
Z Income units
pence per unit
Z Accumulation units
pence per unit
2013
1.8691
1.9376
2014
1.9762
2.1139
2015
2.0821
2.2919
Financial period to 15 January 2016
0.8367
0.9442
Financial year to 15 July
Schroder Global Equity Income Fund
Portfolio Information
% of net
assets
as at
15.1.16
Spread of investments
% of net
assets
as at
15.7.15
Hong Kong
6.04
5.38
Japan
1.10
0.00
Singapore
0.00
1.56
South Korea
3.36
1.85
United Arab Emirates
1.45
0.00
Belgium
5.52
5.04
France
6.36
8.55
Germany
4.88
4.66
Italy
1.66
1.76
Netherlands
1.23
3.24
Norway
1.38
1.78
Spain
2.53
3.89
16.95
19.30
United Kingdom
Canada
United States
3.79
3.52
39.15
34.25
Brazil
0.68
1.00
US Dollar Denominated Derivatives
0.46
0.37
Net other assets
3.46
3.85
Major holdings
% of net
assets
as at
15.1.16
% of net
assets
as at
15.7.15
Ageas
5.52
Ageas
5.04
Cisco Systems
4.27
Staples
4.32
Microsoft
4.07
Cisco Systems
4.23
Deutsche Telekom
3.89
Tesco
3.68
Intel
3.41
Deutsche Telekom
3.56
Samsung Electronics Preference
3.36
Legal & General Group
3.40
HSBC Holdings
3.30
Direct Line Insurance Group
3.36
Tesco
3.07
Centrica
3.16
Staples
2.97
Microsoft
3.04
JPMorgan Chase
2.84
HSBC Holdings
3.01
Schroder Global Equity Income Fund
Investment Objective & 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
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.
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.
Schroder Global Equity Income Fund
Report & Accounts
This document is a short report for the Schroder Global Equity Income Fund
for the period ended 15 January 2016. The long form Report & Accounts for
the fund are available on our website www.schroders.co.uk or upon written
request to Schroders, FREEPOST, RLTZ-CHSY-HBUT, PO Box 1102,
Chelmsford, Essex CM99 2XX.
Other information
The information contained in this report is designed to enable unitholders to
make an informed judgement on the activities of the fund during the period it
covers and the results of those activities at the end of the period. For more
information about the activities and performance of the fund during this and
previous periods, please contact the Manager.
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.
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.
For investors’ security, calls to Schroder Investor Services may be recorded. Manager: Schroder Unit Trusts Limited,
31 Gresham Street, London EC2V 7QA. Authorised and regulated by the Financial Conduct Authority. Investment
Adviser: Schroder Investment Management Limited, 31 Gresham Street, London EC2V 7QA. Authorised and
regulated by the Financial Conduct Authority. 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.
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 March 2016 by Schroder Unit Trusts Limited, 31 Gresham Street,
London EC2V 7QA. Registered No: 04191730 England. Authorised
and regulated by the Financial Conduct Authority. w35659 MR111BI16