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Schroder Global Alpha Plus Fund research update

Richard Troue | Thu 04 June 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.

The Schroder Global Alpha Plus Fund is a high-conviction portfolio comprising around 30 of Simon Webber and Charles Somers' best ideas. Such concentration allows each investment to contribute significantly to performance, but also increases risk.

The managers suggest global economic growth is likely to be positive, if unspectacular, over the coming year, while company earnings will grow modestly. They believe they can identify companies capable of performing significantly better than this, though there are no guarantees.

Current portfolio themes

  • Japanese companies - improving shareholder returns

A preference for holding surplus cash has left many companies in good financial health, but reduced investment and dividends. This could be changing with companies being encouraged by new governance standards to use cash more effectively. The managers have therefore invested in companies they see generating sustainable profits and improving shareholder returns, including Sumitomo Mitsui Financial Group, Bridgestone (car and truck parts) and Sekisui House (house builder).

  • Increasing internet connectivity

Internet-enabled devices are taking an ever more prominent role in everyday life as we go online for entertainment, shopping and to socialise. This could continue to create opportunities for a range of companies and the managers expect the likes of Google, Amazon, Nokia and Apple to benefit.

  • Lower commodity prices - a tax cut for consumers

Simon Webber and Charles Somers believe the beneficial effects of lower commodity prices are being underestimated. They reduce transport and energy costs, which can feed through to falling goods and services prices and put more money in consumers' pockets. They believe this is creating opportunities for travel and leisure companies, such as Hilton and for retail companies such as Kering (owner of Alexander McQueen, Gucci, Puma and Volcom) and Diageo (owner of Guinness and Johnnie Walker whisky).

Performance overview

Simon Webber assumed responsibility for this fund in October 2013, since which point the fund has grown by 19.9% compared with 16.7%* for the average fund in the IA Global sector. The chart below shows performance over the past year, but please remember this is not a guide to the future. Charles Somers joined as co-manager in January 2015.

Please remember past performance is not a guide to the future. Source: Lipper IM* to 01/06/15

Annual percentage growth
May 10 -
May 11
May 11 -
May 12
May 12 -
May 13
May 13 -
May 14
May 14 -
May 15
Schroder Global Alpha Plus 10.01% -7.04% 14.0% 6.03% 20.09%
IA Global 9.8% -5.5% 18.3% 6.03% 16.08%

Investors should note this fund can also invest in smaller companies, use derivatives to enhance returns, and some of the holdings are based in emerging countries, making this a higher-risk, adventurous fund.

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Our view on this fund

Simon Webber has delivered respectable performance since taking over this fund, but we would like to see him build a longer track record working with Charles Somers before considering the fund for inclusion 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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