Schroder Managed Balanced: October 2025 Fund Update

• The fund taps into the expertise of several experienced managers at Schroders

• It provides a high level of diversification in one convenient investment

• It’s focussed on shares, with some other investments in bonds and alternatives

• This fund features on the Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The Schroder Managed Balanced fund mainly invests in funds run by other managers at Schroders and provides investments in a broad range of assets including global shares and bonds. The use of other funds at Schroders means that investors in this fund benefit from the experience and skill of many managers from the business. It also means the fund is very diversified.

We think this fund could form the core of a broader portfolio aiming to deliver long-term growth with fewer ups and downs compared to a portfolio that is only invested in shares.

Manager

This fund is managed with a team-based approach, with Remi Olu-Pitan and Nick Pearson serving as fund managers.

Johanna Kyrklund was also previously a manager of the fund but stepped back from this role on 31 March 2025 following her promotion to group Chief Investment Officer (CIO) in September 2024. It’s a shame that Kyrklund is no longer a manager given her significant experience as a multi-asset investor, however she continues to provide challenge to the remaining managers in her role as group CIO.

Olu-Pitan is Head of Multi-Asset Growth and Income. She started her career in 2006 when she joined Schroders. She has a greater input on high level decisions about what types of asset the fund should invest in, and from what region.

Pearson has managed the fund since October 2022 and has worked at Schroders since 2015, including implementing trades on behalf of the managers for this fund. As his role has developed, he’s taken on more responsibility and now focuses on the day-to-day management of the fund. He works closely with Olu-Pitan to decide what the fund invests in and what size each investment should be.

The managers show a passion for multi-asset investing and it’s clear that Pearson has integrated well into the team.

While Olu-Pitan is involved in a number of different funds in her role as Head of Multi-Asset Growth and Income, we think the pair have enough time and resource to manage this fund effectively.

Process

This is a 'fund of funds'. The managers primarily invest in funds run by other talented Schroders fund managers, although they can also invest outside of the Schroders range where necessary. Collectively those managers invest in hundreds of different companies and bonds. This means the portfolio offers plenty of diversification.

Schroders' Global Asset Allocation committee meet regularly to decide how much to invest in different areas and assets. In forming their views, this committee leverage analysis and insight from a number of specialist in-house teams.

They tend to favour shares when their economic environment is positive. But in times of stress, they shift to more diversified assets, such as bonds and cash, aiming to minimise losses.

Once the Asset Allocation Committee has recommended where and how much to invest, the managers seek to identify several different funds that reflect those views. Every fund must be expected to enhance returns or reduce risk to justify its place in the portfolio.

Over the 12 months to the end of September, the managers have reduced the amount invested in company shares and increased investments in bonds. Within the shares part of the fund, the managers have increased investments in global equity funds and UK specific equity funds, largely in favour of reducing investments in specialist thematic funds and the US stock market.

Within the fixed interest part of the fund, the managers have increased their investments in government bonds. They’ve also reduced the amount in investment grade bonds issued by companies.

At the end of September 2025, the fund had 69.5% invested in shares and 21.3% invested in bonds, compared to 71.2% and 15.9% respectively at the end of September 2024.

Please note that the managers' freedom to invest in high yield bonds, emerging markets and derivatives adds risk.

Culture

Schroders is a multinational asset management company that employs hundreds of investment professionals across the globe. The managers of this fund can tap into that experience and local knowledge to help them make investment decisions. Schroders is home to many high calibre fund managers, so Olu-Pitan and Pearson have plenty of good funds to choose from.

Olu-Pitan has remained loyal to the company for well over a decade, and the broader team has remained stable too. Pearson also already has 10 years with the company. They're all incentivised in a way we think aligns their interests with those of long-term investors.

ESG Integration

Schroders has invested significantly in Environment, Social and Governance (ESG) resources and tools in recent years. Each investment desk has access to a variety of data sources that have been brought together into a proprietary platform called SustainEx, which allows investment teams to quantify a company’s positive and negative contributions to society. All Schroders funds were required to pass the firm’s inhouse ESG accreditation process by the end of 2020. All new funds must also be ESG accredited, and investment teams must reapply for accreditation on an ongoing basis.

The ESG accreditation process is managed by the Sustainable Investment team. They sit on the investment desk and are objective in their approach. There is a set list of criteria that funds must meet to become accredited, and the process is substantial – no fund has ever gained accreditation on the first attempt. Fund managers are also expected to demonstrate improved levels of ESG integration over time.

The Schroders Sustainable Investment team acts as a focal point for ESG, proxy voting, and engagement. When it comes to proxy voting, Schroders has structured policies in place and is transparent on the reasons proposals have been voted against. On the ESG engagement side, the firm’s activities and outcomes are monitored, tracked and reported in its quarterly Sustainable Investment reports and annual Sustainability reports. There are also a range of ESG-related insight and thought leadership articles available on the firm’s website.

While ESG is integrated across the firm, this fund is not a specialist responsible or sustainably invested fund.

Cost

This fund has an ongoing charge of 0.93%. But through Hargreaves Lansdown you can secure an ongoing saving of 0.61%. This means you’ll pay an ongoing charge of 0.32%. We think the fund is attractively priced compared to its peers in the IA Mixed Investment 40-85% Shares sector.

The fund discount is achieved through a loyalty bonus, which could be subject to tax if held outside of an ISA or SIPP. The HL platform fee of up to 0.45% per year also applies, except in the HL Junior ISA, where no platform fee applies.

Performance

The managers aim to deliver performance that doesn’t stray too far from the broader IA Mixed Investment 40-85% Shares sector. Overall, the fund's outperformed the sector since Olu-Pitan became a manager in March 2011. It’s returned 148.99%* over this period compared to the sector average return of 136.51%. There are no guarantees that this will continue though, and there have been periods where performance has varied significantly from the benchmark.

The fund has outperformed its peers in the IA Mixed Investment 40-85% Shares sector over the past year, gaining 11.46% compared to 9.32%. Shares have contributed most to fund performance over the period, in particular emerging markets and the US. The UK stock market had mixed fortunes, with their UK value style fund providing a lot of positive performance. That said, another fund more focused on quality companies in the UK has lagged its benchmark and peers and been one of the worst performing investments.

Bonds and alternatives also contributed positively to performance, but the smaller amount invested in them means the overall impact has been lower than that of the shares in the fund.

Past performance is not a guide to the future.

This fund is highly diversified which means that individual stock or bond selection is unlikely to have a meaningful impact on performance compared to peers. Instead, decisions around how much to invest in different assets, such as shares and bonds, are more likely to have a bigger impact on performance. Similarly, decisions about which areas within shares and bonds to invest in are also important. Overall, we expect the fund to perform similarly to peers over the short-term, resulting in outperformance over longer time periods.