Marketing material. A guide to multi-manager investing

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1 Marketing material A guide to multi-manager investing

2 What is multi-manager investing? Multi-manager funds invest in a selection of individual funds to form a complete portfolio in one package. They re designed to take the worry out of deciding how and where to invest as the manager picks a range of funds in different regions and asset types to suit that particular climate. Diversifying your investments Diversification is based on the idea that you shouldn t put all your eggs in one basket. Different types of investments will move differently at different times of an economic cycle and some will be riskier than others. The idea is that diversifying your investment portfolio can help spread some of the risk across a number of baskets so when one investment falls, the other investments should stay intact. Diversification cannot guarantee investment returns or remove the possibility of loss, but it is a widely-used tool that could be used to help manage risk. What is the Diversity range? The Diversity range at Schroders has been created to fit with a range of investment goals and risk profiles. As the name implies, the range invests in a number of hand-picked funds selected from across the entire market. Each fund has a different target and aims to deliver returns with less volatility than other funds in the market, although this is not guaranteed. What are the risks? All investments contain some element of risk and no investment can be said to be risk free you need to be aware of the potential risks and rewards before you invest. Always bear in mind that the value of investments can go down as well as up and you may not get back the amount you originally invest. A financial adviser can help you determine your attitude to risk by going through a risk questionnaire. From there, you can start to form a portfolio of investments that you re comfortable with. For a more detailed explanation of the risks associated with investing in individual funds, please see pages 4-5, or refer to the funds Key Investor Information Documents (KIIDs) and Prospectuses. Multi manager funds access a wide range of investments, including equities, bonds and property 1 A guide to multi-manager investing

3 Achieving the right mix Different asset classes will perform differently as the market changes today s winner may be tomorrow s loser. The table below shows the performance of individual asset classes over the last decade. To take one of the most volatile examples, offered a gain of 3 in one year (2016) and a loss of - the next. A skilled multi-manager will monitor the external environment and adapt the portfolio to suit. They hope to achieve the optimal mix of assets for the economic environment, all at the right level of risk. Best % % 27% 24% 24% 1 8% % US 30% 2 US 14% 3 3 US % 7% 2 14% US 7% % US US 2 30% 14% US - UK 30% UK 2 24% -17% 17% UK 1 UK 2 UK - 17% - US -2 1 UK - US 1 4% UK 17% -2 US UK 1-8% -24% % 9% - UK 0% 4% UK -30% 8% - 0% - 9% -3 7% -1 0% -37% % Worst -48% % -29% - Source: Datastream, as at 31 December Returns in GBP. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. The sectors mentioned are for illustrative purposes only and not a recommendation to buy or sell shares. A guide to multi-manager investing 2

4 Lower risk Lower potential reward H i g h e r r i s k Higher potential reward About the fund Schroder MM Diversity Fund Schroder MM Diversity Income Fund Schroder MM Diversity Balanced Fund The asset class breakdown is % Fixed income & cash 40% Fixed income & cash Fixed income & cash 33. Alternatives Alternatives 2 Alternatives The fund and manager have been awarded... AA A Past Performance is not a guide to future performance and may not be repeated. A The types of investments the manager can choose from are UK and overseas shares, government and corporate bonds, other fixed interest securities and alternative investments UK and overseas shares, government and corporate bonds, other fixed interest securities and alternative investments Shares, government and corporate bonds and cash, both in the UK and in overseas markets. The fund invests at least 50% in funds that buy shares The fund... Aims to deliver a consistent long-term capital growth in excess of inflation with lower risk than more traditional approaches to investment management Aims to provide an income whilst preserving capital, in line or above inflation, from a portfolio invested across a wide range of asset classes Aims to achieve a moderate income with smooth and consistent returns in all market conditions Although not guaranteed, the fund targets 4% p.a. over inflation (as measured by the Consumer Price Index) over the medium term Growth in its unit price in line with, or above, the UK Consumer Price Index while also making an average income payment of 4% per annum Outperformance of its benchmark a composite that represents different benchmarks of stocks and shares, bonds and alternative investments The fund is measured against [Benchmark] The Consumer Price Index (CPI) a measure of inflation The Consumer Price Index (CPI) a measure of inflation A composite benchmark of the following indices and weights: FTSE All Share index (50%), FTSE All World ex UK (1), FTSE UK Govt All Stocks (), HFRI (), IPD () and GSCI () Performance Fund Benchmark Q Q % 2.9% 1.7% 2.9% 3.7% 2.9% Q Q % % Q Q % 0. Q Q % % 0. Q Q % % % 18.7% Past Performance is not a guide to future performance. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Source of performance: FE Analytics, bid to bid with net income reinvested to 31 December 2017, Z Acc share class, net of fees in GBP. Risks The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses. High yield bonds (normally lower rated or unrated) generally carry greater market, credit and liquidity risk. A rise in interest rates generally causes bond prices to fall. A decline in the financial health of an issuer could cause the value of its bonds to fall or become worthless. A failure of a deposit institution or an issuer of a money market instrument could create losses. Equity prices fluctuate daily, based on many factors including general, economic, industry or company news. In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares. Failures at service providers could lead to disruptions of fund operations or losses. The counterparty to a derivative or other contractual agreement or synthetic financial product could become unable to honour its commitments to the fund, potentially creating a partial or total loss for the fund. A derivative may not perform as expected, and may create losses greater than the cost of the derivative. The fund uses derivatives for leverage, which makes it more sensitive to certain market or interest rate movements and may cause aboveaverage volatility and risk of loss. The fund was launched on 1 September December April 2012 Ongoing charge (the amount you ll pay over a year related to the costs of running the fund) 1.80% (A units) 1.30% (Z units) 1.7 (A units) 1.2 (Z units) 1.8 (A units) 1.3 (Z units) Minimum investment 1000 or monthly instalments of 50 (A units) 3 A guide to multi-manager investing

5 Lower risk Lower potential reward H i g h e r r i s k Higher potential reward Schroder MM Diversity Tactical Fund Schroder MM UK Growth Fund Schroder MM International Fund The asset class breakdown is... 80% Fixed income & cash 100% 100% 1 Alternatives The fund and manager have been awarded... A Past Performance is not a guide to future performance and may not be repeated. The types of investments the manager can choose from are A diverse range of asset types in global markets, including shares, bonds, fixed interest, cash and any other permitted assets deemed appropriate to meet the investment objective Funds invested predominantly in UK shares across all economic sectors Funds invested in any and all geographic areas of the world The fund Aims to provide capital growth in its unit price mainly through investment in global markets Aims to provide capital growth through investment in a diversified portfolio of UK shares Aims to provide capital growth through investment in global share markets and in all economic sectors. The fund has no geographic or sector limits Although not guaranteed, the fund targets Outperformance of its benchmark a composite that represents different benchmarks of stocks and shares, bonds and alternative investments Outperformance of its benchmark, the FTSE All Share index Outperformance of its benchmark, the FTSE All World (ex UK) index over the medium term The fund is measured against [Benchmark] A composite benchmark of the following indices and weights: FTSE All Share index (50%), FTSE All World ex UK (30%), FTSE UK Govt All Stocks (), The FTSE All Share index an index designed to represent the performance of all eligible companies listed on the London Stock Exchange s main market The FTSE World (ex UK) index an index designed to represent the performance of international investments outside the UK Performance Fund Benchmark Q Q % Q Q % 16.8% 16.8% 27.9% 30.4% Q Q % % 6.0% 4.8% Q Q % 4.9% 0.0% Q Q % 27.7% 22.7% Past Performance is not a guide to future performance. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Source of performance: FE Analytics, bid to bid with net income reinvested to 31 December 2017, Z Acc share class, net of fees in GBP. Risks The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses. High yield bonds (normally lower rated or unrated) generally carry greater market, credit and liquidity risk. A rise in interest rates generally causes bond prices to fall. A decline in the financial health of an issuer could cause the value of its bonds to fall or become worthless. A failure of a deposit institution or an issuer of a money market instrument could create losses. Equity prices fluctuate daily, based on many factors including general, economic, industry or company news. In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares. Failures at service providers could lead to disruptions of fund operations or losses. The counterparty to a derivative or other contractual agreement or synthetic financial product could become unable to honour its commitments to the fund, potentially creating a partial or total loss for the fund. A derivative may not perform as expected, and may create losses greater than the cost of the derivative. The fund uses derivatives for leverage, which makes it more sensitive to certain market or interest rate movements and may cause above-average volatility and risk of loss. The fund was launched on 22 May May May 2002 Ongoing charge (the amount you ll pay over a year related to the costs of running the fund) 1.84% (A units) 1.34% (Z units) 1.9 (A units) 1.4 (Z units) 1.9 (A units) 1.4 (Z units) Minimum investment 1000 or monthly instalments of 50 (A units) 1,000,000 (Z units) A guide to multi-manager investing 4

6 Packaging your portfolio more efficiently Multi-manager investing could be more cost efficient than if you were to buy the same funds individually, and (depending on your tax ) you could enjoy certain tax benefits, especially if you use a tax efficient wrapper such as an ISA. Your financial adviser can go through your individual tax implications with you. The tax rules for ISAs may change in the future. Why choose the Diversity team? The Diversity team has a long-standing reputation within the investment community and collectively bring over 60 years of investment experience. They have been with Schroders since 2013, having joined as part of the integration with Cazenove Capital Management. The team pays close attention to what s happening in the market. Their starting point is always deciding on their view of the world: where it is going, what different economic outcomes may emerge and what assets will work in different scenarios. Only then do they move onto selecting funds. Led by Marcus Brookes, the team actively manages the range to ensure the right blend of funds is working to achieve investor goals. How to invest The Diversity range is available to buy through a number of fund supermarkets and investment platforms but if you re unsure, it s important to get the right advice before you invest. Find a financial adviser or Find out more For further information, including Key Investor Information Documents and Prospectuses, visit or phone Investor Services on (for your security, calls will be recorded). Marcus Brookes Head of Multi-Manager Robin McDonald Fund Manager Joe Le Jehan Fund Manager Joe Tennant Product Specialist 5 A guide to multi-manager investing

7 At Schroders, asset management is our business and our goals are completely aligned with those of our clients the creation of long-term value. We manage 430.3billion ( 488.3billion/US$577.3 billion) on behalf of institutional and retail investors, financial institutions and high net worth clients from around the world, invested in a broad range of asset classes across equities, fixed income, multi-asset and alternatives. We employ over 4100 talented people worldwide operating from 41 offices in 27 different countries across Europe, the Americas, Asia and the Middle East, close to the markets in which we invest and close to our clients. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business. To find out more, visit or speak to your financial adviser Source: Schroders as at 30 September 2017 A guide to multi-manager investing 6

8 Schroder Investment Management Limited 31 Gresham Street, London EC2V 7QA, United Kingdom Tel: +44 (0) Important Information: The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall. Past Performance is not a guide to future performance and may not be repeated. This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy. For help in understanding any terms used, please visit address. Information herein is believed to be reliable but we do not warrant its completeness or accuracy. Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider s consent. Neither we, nor the data provider, will have any liability in connection with the third party data. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. For the purposes of the Data Protection Act 1998, the data controller in respect of any personal data you supply is Schroder Investment Management Limited. Personal information you supply may be processed for the purposes of investment administration by any company within the Schroders Group and by third parties who provide services and such processing and which may include the transfer of data outside of the European Economic Area. Schroder Investment Management Limited may also use such information to advise you of other services or products offered by the Schroder Group unless you notify it otherwise in writing. For your security, communications may be taped or monitored. Source for performance: FE Analytics, bid to bid with net income reinvested to 30 September 2017, Z Acc share class, net of fees in GBP. Source for ratings: Citywire, Defaqto, Distribution Technology, Morningstar, Rayner Spencer Mills, Square Mile and FundCalibre, as at 31 January Charges are correct as at 31 January Visit for more details. Issued in February 2018 by Schroder Investment Management Limited, 31 Gresham Street, London, EC2V 7QA. Registered no England. Authorised and regulated by the Financial Conduct Authority. UK RC62166.