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Schroder UK Mid 250 Fund research update

Heather Ferguson | Mon 28 July 2014

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.

Andy Brough, manager of the Schroder UK Mid 250 Fund, predicts consumers will become more cautious in the lead up to the referendum on Scottish independence and the UK election - causing a knock on effect to companies that rely on consumer spending. To provide an element of shelter from these uncertainties, the manager is focusing on businesses with healthy cash flows and strong balance sheets.

Andy Brough views the flurry of companies listing their shares on the stock market in 2014 as a sign the stock market is becoming overheated. He avoided many of the new listings as he felt most were overpriced, however, a position was initiated in Pets At Home. The manager believes it to be a quality company with few competitors and, unlike other UK retailers, less affected by the wider economy - demand for pet services has a low correlation to disposable incomes. The company also has good growth prospects as they expand into veterinary services and grooming parlours.

The manager has begun growing the fund's weighting to financial companies, increasing the position held in asset manager, Investec. As one of the few banks that did not require additional capital in the aftermath of the financial crisis, the manager is expecting a rising return on investment in their banking division.

The manager had gradually been reducing the fund's long-standing position in Sports Direct on the back of strong performance, selling the last of his holding in March. Sports Direct contributed to the fund's performance, returning 91% over the past year (to beginning of March).

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Our view on this fund

Andy Brough has managed the fund since its inception in 1999. During his tenure, the fund has returned 356.9% in comparison to the FTSE Mid 250 (excluding investment trusts) Index at 327.6*%. Remember though, past performance is not a guide to future returns. The fund focuses on small and medium-sized companies which can be more volatile than their larger counterparts.

This fund does not currently feature on the Wealth 150 list of our favourite funds across the major sectors. Our analysis indicates stock picking has been strong since November 2011, which is reflected in the fund's 17.9% outperformance of its benchmark over this period. However, the fund had struggled to outperform its benchmark for several years prior to this. As this improvement has only been over a relatively short period, we would like to see more sustained improvement before considering the fund for inclusion to the Wealth 150.

Annual percentage growth
July 09 -
July 10
July 10 -
July 11
July 11 -
July 12
July 12 -
July 13
July 13 -
July 14
Schroder UK Mid 250 19.92% 27.86% -6.68% 42.80% 18.75%
FTSE 250 Mid (ex Investment Trusts) 25.65% 36.58% -4.59% 32.55% 16.63%

Past performance is not a guide to future returns. Source: Lipper IM* to 01/07/2014

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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