Schroder UK Alpha Plus A Accumulation Units 
HL comment
Our view on this Fund
As we move into 2012 UK government and consumer finances remain squeezed. Certain sectors and companies could struggle in this environment. Retailers and supermarkets experienced mixed fortunes over Christmas, for example. Yet Richard Buxton, manager of the Schroder UK Alpha Plus fund, believes the long-term prospects for some remain robust. Take Burberry, the high-end fashion retailer. Healthy demand from Asian consumers is benefiting the company, helping it maintain growth.
Certain goods and services will always be in demand, regardless of prevailing economic conditions. Medical and healthcare products, sold by the likes of GlaxoSmithKline, are a classic example, as are the food products and ingredients sold by Tate & Lyle. Both companies feature among Richard Buxton's largest holdings.
Few areas currently split opinion as much as banks. Some investors worry about their funding requirements and increased regulation, but Richard Buxton believes they can work through their losses, so holding banks such as Lloyds could pay off in future, although short-term volatility is likely.
Similarly, mining and energy companies endured a tough 2011. While commodity prices are subject to fluctuations many commodities are finite resources for which demand could remain robust over the longer term. Richard Buxton suggests this could stand companies searching for and extracting commodities, such as Rio Tinto and Xstrata, in good stead.
This is a concentrated and higher risk portfolio, focusing mainly on larger UK companies. Exposure to more economically sensitive companies hurt performance in 2011, but he remains positive on these companies on a long-term view. Recently, he has used share price falls as a chance to top up holdings, including technology company Misys which he views as in a strong financial position with good prospects.
We hold Richard Buxton in high regard, believing him capable of recovering from a disappointing 2011 and achieving attractive long-term returns. Please remember past performance is not a guide to the future and any investment can fall as well as rise in value. We are pleased to retain this fund on the Wealth 150 list of our favourite funds in each sector.
17-01-2012
Information from the fund manager
Simplified prospectus/Key Investor Information
Document
Please note: The information in this box has been provided by, and is issued by, the fund manager and not Hargreaves Lansdown. Hargreaves Lansdown accepts no liability for the reliability or accuracy of the data provided by third parties.
HL sector comment: UK All Companies
Our view on this sector
The UK economy grew 0.5% in the third quarter of 2011, better than many expected, but still anaemic. Continuing woes in the euro zone, one of the UK's biggest trading partners, have weighed on the economy. The Bank of England's Monetary Policy Committee recently announced a further £75bn of quantitative easing in an effort to stimulate the economy, but it remains to be seen whether it will be effective. On a positive note UK companies look in good shape; dividends have been increasing and many are sitting on large cash reserves. Corporate prospects remain strong and investors could benefit from the experience of some talented UK fund managers in this sector.
13-12-2011