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Schroder Core UK Equity Fund - a brief update

Richard Troue | Wed 20 May 2015

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.

In recent weeks the FTSE 100 has hovered around its all-time high, just over 7,000 points. David Docherty, manager of the Schroder Core UK Equity Fund, is positive on the outlook for growth in the UK, as well as the prospect for rising company earnings and dividends. He therefore believes share prices could rise further.

Over the past year he has retained a preference for companies which have tended to perform better when the economy is stronger. This includes mining and commodity companies, particularly those where he believes share prices don't fully reflect the value of a company's assets. He also suggests many are making strides towards improving returns for shareholders, having cut excess costs, for example. Rio Tinto and Glencore are two core investments for the fund in this sector.

In contrast, David Docherty is less positive on companies which have tended to have more reliable earnings and therefore performed better during more challenging economic times. After a strong period of performance for such companies he feels share prices have risen too high and can't be justified based on the current outlook for earnings growth. For this reason he has maintained less exposure to companies such as Unilever and Reckitt Benckiser in the consumer goods sector.

Over the past year the overall positioning of the portfolio has not paid off. Investors have, on the whole, continued to appreciate the steady earnings and dividends of less economically sensitive companies. On the other hand, commodities and resources companies have struggled against a backdrop of falling demand in commodity-intensive countries such as China, and falling commodity prices generally.

Over the past year the fund has fallen by 0.1%* compared with a rise of 7.7% for the average fund in the IA UK All Companies Sector and 7.4% for the FTSE All Share Index, with dividends reinvested. Please remember past performance is not a guide to the future.

Schroder Core UK Equity Fund performance over the past year

Past performance is not a guide to the future. Source: Lipper IM* to 01.05.2015

Annual percentage growth
May 10 -
May 11
May 11 -
May 12
May 12 -
May 13
May 13 -
May 14
May 14 -
May 15
Schroder Core UK Equity 14.6% -5.4% 18.9% 12.7% -0.1%
IA UK All Companies 15.6% -2.6% 18.4% 13.8% 7.7%
FTSE All Share 16.8% -1.0% 16.9% 10.5% 7.4%

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Our view on this fund

2014 was a difficult year for the fund, particularly relative to the FTSE All Share Index. Since taking over in January 2009 David Docherty has underperformed this benchmark and overall we do not believe his track record is strong enough to merit a place on the Wealth 150 list of our favourite funds across the major sectors.

Find out more about this fund including how to invest

Please read the key features/key investor information document in addition to the information above.

The value of investments can go down as well as up, this means you could get back less than you invested. Therefore all investments should be regarded with a long term view. No news or research item is a personal recommendation to deal. If you are unsure about the suitability of an investment please contact us for advice.
Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.


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