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Schroder UK Dynamic Absolute Return Inclusive - Class P1 - Accumulation (GBP)

Sell:166.10p Buy:166.10p Change: 1.00p (0.61%)
Prices as at 25 September 2020
Change: 1.00p (0.61%)
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
Prices as at 25 September 2020
Change: 1.00p (0.61%)
Prices as at 25 September 2020
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

Our view on this Fund

This fund does not feature on the Wealth Shortlist of funds our analysts believe have the potential to outperform their peers over the long term. This is not a recommendation to sell; however, if you are thinking of adding to your investments, we believe the Wealth Shortlist is a good place to start. View funds on the Wealth Shortlist »

This is a relatively aggressive 'absolute return' fund run by an experienced and knowledgeable UK smaller companies specialist we regard highly. It focuses primarily on medium-sized and smaller companies. While its returns are likely to be less volatile than the UK stockmarket more generally, investors need to be prepared to accept short-term losses. It has a relatively unattractive fee structure but the manager's record so far makes it less unpalatable than others.

Following Schroders' acquisition of Cazenove Capital, this fund was renamed from the Cazenove UK Absolute Dynamic Fund in March 2014. Investors should also note that from April 2015 dealing in this fund takes place on a weekly (previously daily) basis.

Our view on the sector

Funds in this sector generally try to make a positive return in any market condition. But they go about it in different ways. Some focus on one type of asset, such as shares or bonds, while others invest in a variety of different assets. Some stick to one geographical area, like the UK or Europe, while others invest globally. Some also take 'short' positions, which can allow the fund to benefit from falling prices. It can be difficult to compare funds in this sector because they're so different, so each one should be considered on its own merits. Some have been more volatile than others, some have sheltered investors' money well but not done as well when markets have risen, while others have performed poorly. Like any investment, there's still a degree of risk and they're not guaranteed to make money.

Performance Analysis

The fund has delivered excellent returns while sheltering investors from the worst of the UK stock market's downside since its launch. The fund has at times suffered losses in the region of 10%, however, hinting at the risk attached to this 'Targeted Absolute Return' fund. In recent years the fund has caught part of the market's upside while mostly avoiding losses on investors' capital. However, 2014 was a tough year for the fund as a number of investments performed poorly at the same time. Performance has since improved again and we continue to believe Paul Marriage will do a good job for long-term investors.

Investment Philosophy

The manager looks to identify small and medium-sized companies where the true value of the business is not currently reflected in the share price. The manager can search across the whole UK stock market and is free to back his favourite stocks with high conviction. Little attention is paid to the wider economic environment.

Process and Portfolio Construction

The fund has a bias towards higher risk smaller and medium-sized companies, including those listed on FTSE AIM (the junior market of the London Stock Exchange). The focus is on stockpicking and the fund tends to hold 40-60 stocks in both its 'long' and 'short' portfolios (the long positions aim to benefit from share price rises while the short positions aim to benefit from falls in share prices). Normal stock positions will be less than 7.5% of the portfolio. Typically, the portfolio might hold 100 stocks (60 long and 40 short).

The key source of information is one-on-one meetings between the fund manager and the management of companies.

The fund will have exposure to the general direction of the stockmarket, but a combination of long and short positions means the fund is not fully exposed to stock market movements. It could be expected to have up to 75% of the full market exposure, although 40% could be considered a more normal level.

question mark Manager Track Record Based on HL Quantitative Research

This information is currently unavailable.

Fund Track Record

25/09/15 to 25/09/16 25/09/16 to 25/09/17 25/09/17 to 25/09/18 25/09/18 to 25/09/19 25/09/19 to 25/09/20
Annual return -1.08% 12.76% 2.79% -1.99% -6.26%

Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.

Fund Management Group Comment

Schroders is a member of the FTSE 100 Index and it focuses almost entirely on asset management for institutional, retail and private clients. Schroder funds incorporate all asset classes, including equities, fixed income and alternative investments. Schroder's fund managers draw on the detailed stock analysis from the group's analysts worldwide. The company has developed under stable ownership for over 200 years and long-term thinking governs its approach to investing, building client relationships and growing their business. In 2013 Schroders merged with Cazenove Capital Management to create one of the UK's largest private banking and wealth management houses.

Information about the fund

Fund manager biography

manager photo
Manager Name: Paul Marriage
Manager start date: 7 September 2009
Manager located in: London UK

Paul Marriage is a member of the pan-European equity team. He joined from Insight Investment where he was head of UK Small Cap investments. Paul graduated from University College, Oxford with a degree in Modern History. He is a member of ASIP and has 15 years' investment experience.

manager photo
Manager Name: John Warren
Manager start date: 6 September 2010
Manager located in: London

John Warren is a member of the pan-European equity team. He has over 12 years' investment experience, having previously been at UBS and Investec Bank. John graduated from Loughborough University with a degree in Economics and Accountancy. He holds the ACA and SFA qualifications.

Data policy - All information should be used for indicative purposes only. You should independently check data before making any investment decision. HL cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used. Benchmark data provided subject to this disclaimer.
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account