Global Emerging Markets Fund

Transcription

1 Schroder Global Emerging Markets Fund Interim Report and Accounts September 2017

2 Contents Schroder Global Emerging Markets Fund Fund Information Investment objective and policy Financial highlights Fund information Ongoing charges figure Total purchases and sales Review of Investment Activities Risk Profile Risk and reward indicator Specific risks Net Asset Value and Comparative Tables Unit price range Net revenue Net asset value Fund performance Portfolio Statement Summary of Portfolio Transactions Largest purchases Largest sales Statement of the Manager s Responsibilities Statement of Total Return (unaudited) Statement of Change in Net Assets Attributable to Unitholders (unaudited) Balance Sheet (unaudited) Notes to the Accounts (unaudited) Basis of preparation Accounting policies General Information Authorisation Other information Collectively these comprise the Manager s report.

3 Fund Information Investment objective and policy The Schroder Global Emerging Markets Fund s (the fund ) investment objective is to achieve long term capital growth by investing in the emerging markets of the world. The fund will invest in equity or equity related securities (including warrants and convertible securities) and fixed interest securities which provide exposure to emerging markets. The portfolio may also include shares in investment trusts and other closed end funds which are themselves dedicated to investment in emerging markets, as well as in securities of companies which, whilst listed on eligible stock exchanges, conduct a significant proportion of their business in emerging market countries and may, therefore, be expected to participate in their growth. Investment will be in directly held transferable securities. The fund may also invest in collective investment schemes, warrants and money market instruments. Financial highlights Selling price % change A Income units p p 7.68 A Accumulation units p p 8.14 S Income units 78.36p 73.07p 7.24 Z Income units 77.86p 72.51p 7.38 Z Accumulation units 82.77p 76.24p 8.57 Fund information Launch date 11 October 1993 Launch price 50.00p per A Income unit 50.00p per A Accumulation unit Launch date 8 November 2011 Launch price 50.00p per Z Income unit 50.00p per Z Accumulation unit Launch date 31 January 2014 Launch price 50.00p per S Income unit Interim Final Accounting dates 30 September 31 March Revenue allocation date 31 May 3

4 Fund Information (continued) Ongoing charges figure For the period For the year to to A Income units 1.72% % A Accumulation units 1.72% % S Income units 0.59% % Z Income units 0.97% % Z Accumulation units 0.97% % 1 The Ongoing charges figure is annualised based on the fees incurred during the accounting period. Total purchases and sales For the period For the year to to s 000 s Total purchases 154, ,700 Total sales 150, ,603 4

5 Review of Investment Activities From 31 March 2017 to 29 September 2017, the price of A Accumulation units on a selling price to selling price basis rose 8.14% 1. In comparison, the MSCI Emerging Market Index generated a net return of 6.86% 2 in sterling terms. 1 The fund and benchmark have different pricing points (intra-day versus closing price respectively) so there may be a performance timing effect at month end. 2 Source: Thomson Reuters Datastream. Emerging Markets (EMs) posted strong returns supported by a synchronised pick up in global growth and US dollar weakness. China was among the strongest markets as economic momentum remained firm. Meanwhile, improving eurozone growth was beneficial for the markets of Hungary, Poland and the Czech Republic. The fund outperformed the benchmark with positive stock selection in Russia and Taiwan adding the most to relative returns. It was also positive in India and China. Country allocation was slightly negative, with the overweight to Russia the main headwind. The fund was generally positioned in markets which we believe can benefit from stronger global growth or domestic reforms. We increased the magnitude of the Poland overweight at the start of the period and also maintained overweights to South Korea and Brazil. Chile was taken from underweight to neutral amid some improvement in the outlook for earnings. From a valuation perspective, EM now trades in line with its long term average on an aggregate price to book basis. However, there is potential for valuations to increase, should return on equity continue to improve from current levels. Fundamentals are firm and we continue to think there is a bias for further dollar weakness, even if there may be a degree of near term consolidation in the currency. There is potential that we see some pause for breath in markets following a strong run, but we still expect EM to perform relatively well through time. Please remember that past performance is not a guide to future performance and it might not be repeated. The value of investments and the revenue from them may go down as well as up and investors may not get back the amount originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money. Co-Fund Manager: Robert Davy Global Emerging Markets Fund Manager and Deputy Head of Emerging Market Equities, based in London Became a Global Emerging Markets fund manager in Established Schroders offices and businesses in Latin America during the 1990s. Based in New York from Founding member of Schroders Latin America team, becoming a Latin American fund manager in In 1988 moved to become a fund manager on the US desk. Joined Schroders in November 1986, initially as an analyst on the UK equity team Investment career commenced upon joining Peat Marwick in 1982, qualifying as a chartered accountant in 1986 MA in History, Magdalene College, Cambridge University Co-Fund Manager: Thomas Wilson Thomas Wilson is the Head of Emerging Market Equities at Schroders, which involves managing the Emerging Market desk. He joined Schroders in 2001 and is based in London Thomas was Global Emerging Market portfolio manager at Schroders from 2014 to 2016, which involved being one of the portfolio managers running the global emerging market funds He was Head of EMEA Equities at Schroders from 2007 to 2014, which involved running the EMEA desk and the Emerging European funds He was an Equity Analyst at Schroders from 2001 to 2007, which involved working on the Global Energy team, before becoming an EMEA analyst. As an EMEA analyst, Tom was responsible for Russia, Turkey, Hungary, Czech Republic and Poland from Qualifications: CFA Charterholder 5

6 Risk Profile Risk and reward indicator The risk category was calculated using historical performance data and may not be a reliable indicator of the fund s future risk profile. The fund is in this category because it can take higher risks in search of higher rewards and its price may rise and fall accordingly. The fund s risk category is not guaranteed to remain fixed and may change over time. A fund in the lowest category does not mean a risk free investment. Specific risks The fund invests in assets which are exposed to currencies other than sterling. Exchange rates may cause the value of overseas investments and the revenue from them to rise or fall. The fund invests in less developed markets which are generally less well regulated than the UK. They may be less liquid and may have less reliable custody arrangements. The fund invests in emerging markets and the Far East. This involves a high degree of risk and should be seen as long term in nature. The fund invests in smaller companies which may be less liquid than larger companies and price swings may therefore be greater than in larger company funds. The fund may invest in unregulated collective investment schemes, which involves a higher degree of risk as they are not regulated by the Financial Conduct Authority (FCA). The funds may not be readily realisable and priced less frequently than listed shares or authorised unit trusts, and therefore price swings may be more volatile. For these reasons, the purchase of units should not normally be regarded as a short term investment. 6

7 Net Asset Value and Comparative Tables Financial year to 31 March A Income units A Accumulation units Unit price range Highest Lowest Highest Lowest buying selling buying selling p p p p Financial period to 30 September Financial year to 31 March S Income units Z Income units Highest Lowest Highest Lowest buying selling buying selling p p p p Financial period to 30 September Financial year to 31 March Z Accumulation units Highest Lowest buying selling p p Financial period to 30 September Net revenue A Income units A Accumulation units Financial year to 31 March pence per unit pence per unit Financial period to 30 September 2017 Nil Nil 7

8 Net Asset Value and Comparative Tables (continued) S Income units Z Income units Financial year to 31 March pence per unit pence per unit Financial period to 30 September 2017 Nil Nil Z Accumulation units Financial year to 31 March pence per unit Financial period to 30 September 2017 Nil Net asset value Net asset Net asset value value per unit Number of As at 31 March 000 s p units in issue 2015 A Income units 102, ,804,941 A Accumulation units 686, ,948,866 S Income units 10, ,103,570 Z Income units 13, ,700,508 Z Accumulation units 36, ,084, A Income units 92, ,734,446 A Accumulation units 538, ,239,161 S Income units 7, ,292,044 Z Income units 16, ,697,480 Z Accumulation units 36, ,116, A Income units 115, ,677,675 A Accumulation units 652, ,689,252 S Income units 11, ,108,734 Z Income units 21, ,082,142 Z Accumulation units 46, ,860, at 30 September A Income units 124, ,113,095 A Accumulation units 699, ,854,761 S Income units 16, ,608,315 Z Income units 23, ,170,044 Z Accumulation units 53, ,804,128 8

9 Net Asset Value and Comparative Tables (continued) Fund performance Net asset Net asset value per unit value per unit p p as at as at % change A Income units A Accumulation units S Income units Z Income units Z Accumulation units Please remember that past performance is not a guide to future performance and it might not be repeated. The value of investments and the revenue from them may go down as well as up and investors may not get back the amount originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money. 9

10 Portfolio Statement Emerging Markets Funds 1.51% ( %) Holding at Market Value % of net s assets Schroder International Selection Fund SICAV Frontier Markets Equity I Accumulation USD ¹ ² 32,797 4, Schroder International Selection Fund SICAV Global Emerging Markets Smaller Companies I Accumulation USD ¹ ² 89,470 9, , Asia China/Hong Kong 29.33% ( %) AIA Group 2,936,600 16, Alibaba Group Holding ADR 384,698 49, Anhui Conch Cement H 2,039,000 6, China Biologic Products Holdings 12, China Construction Bank H 40,650,010 25, China Mengniu Dairy 4,793,000 9, China Mobile 1,615,000 12, China Pacific Insurance Group H 4,819,600 15, China Petroleum & Chemical H 29,541,200 16, China Resources Beer Holdings 2,628,000 5, China Unicom Hong Kong 6,800,000 7, CNOOC 1,156,000 1, Dongfeng Motor Group H 3,614,000 3, Midea Group 1,058,800 5, New Oriental Education & Technology Group ADR 220,422 14, PICC Property & Casualty H 3,962,000 5, Shenzhou International Group Holdings 1,124,000 6, Tencent Holdings 1,953,400 62, Zhuzhou CRRC Times Electric H 1,381,500 5, , India 4.65% ( %) HDFC Bank 675,963 13, Hindustan Unilever 625,289 8, Infosys 439,123 4,

11 Portfolio Statement (continued) Holding at Market Value % of net s assets India (continued) ITC 1,708,348 5, Maruti Suzuki India 85,092 7, UltraTech Cement 69,498 3, , Indonesia 0.00% ( %) South Korea 18.58% ( %) Amorepacific 29,637 4, CJ CGV 62,844 2, DGB Financial Group 467,898 3, E-MART 6, Hana Financial Group 438,483 13, Hyundai Motor 110,142 10, Hyundai Motor Preference 39,891 2, Korea Kolmar 57,115 2, Korea Zinc 18,103 5, LG Chem 40,497 10, Medy-Tox 7,388 2, NAVER 12,325 5, NCSoft 40,169 12, Netmarble Games 27,919 2, Samsung Electronics 38,922 64, Samsung Fire & Marine Insurance 23,210 4, Shinhan Financial Group 104,778 3, SK Hynix 112,460 6, SK Innovation 85,741 11, , Taiwan 11.20% ( %) Advanced Semiconductor Engineering 4,426,077 4, Cathay Financial Holding 9,717,601 11, Ennoconn 274,000 2, Far EasTone Telecommunications 1,301,000 2, Formosa Plastics 2,141,000 4, Hon Hai Precision Industry 9,658,525 24,

12 Portfolio Statement (continued) Holding at Market Value % of net s assets Taiwan (continued) Taiwan Mobile 2,079,000 5, Taiwan Semiconductor Manufacturing 8,810,108 46, , Thailand 2.12% ( %) Bangkok Bank 563,600 2, Kasikornbank 2,891,300 13, Thai Beverage 3,524,800 1, Thai Oil 971,600 1, , Europe/Middle East/Africa Egypt 0.45% ( %) Commercial International Bank Egypt 609,360 2, Commercial International Bank Egypt GDR 609,344 2, , Greece 0.63% ( %) Alpha Bank 999,781 1, Hellenic Telecommunications Organization 473,511 4, , Hungary 1.90% ( %) MOL Hungarian Oil & Gas 536,728 4, OTP Bank 456,342 12, , Poland 2.46% ( %) Bank Pekao 438,190 11, PLAY Communications 452,757 3, Powszechny Zaklad Ubezpieczen 814,686 7, ,

13 Portfolio Statement (continued) Holding at Market Value % of net s assets Russia 7.85% ( %) LUKOIL ADR 420,413 16, Mail.Ru Group GDR 221,602 5, MegaFon GDR 464,354 3, Novatek GDR 28,154 2, Polymetal International 263,516 2, Polyus GDR 82,698 2, Sberbank of Russia ADR 2,749,867 29, X5 Retail Group GDR 292,098 9, , South Africa 2.71% ( %) AVI 431,811 2, Barclays Africa Group 703,183 5, Foschini Group 301,238 2, Naspers 79,647 12, Novus Holdings 27, Sibanye-Stillwater 2,462,174 2, , Turkey 1.38% ( %) Akbank Turk 1,317,790 2, KOC Holding 1,828,943 6, Turkcell Iletisim Hizmetleri 1,439,552 3, , United Arab Emirates 1.51% ( %) DP World 288,604 4, Emaar Properties 5,254,253 9, , Latin America Argentina 0.70% ( %) BBVA Banco Frances ADR 246,321 3, Pampa Energia ADR 54,406 2, ,

14 Portfolio Statement (continued) Holding at Market Value % of net s assets Brazil 8.80% ( %) Banco Bradesco ADR 1,590,457 13, CCR 1,834,080 7, Equatorial Energia 267,600 3, Itau Unibanco Holding ADR 974,548 9, Klabin 946,000 4, Kroton Educacional 611,000 2, Light 418,900 1, Lojas Renner 1,156,870 9, Petroleo Brasileiro ADR 414,181 3, Petroleo Brasileiro Preference ADR 459,134 3, Raia Drogasil 266,500 4, Telefonica Brasil ADR 491,599 5, Vale ADR 933,853 6, WEG 726,800 3, , Chile 1.11% ( %) Banco Santander Chile ADR 58,130 1, Enel Americas ADR 667,269 5, SACI Falabella 526,952 3, , Colombia 0.32% ( %) Bancolombia ADR 86,554 2, , Mexico 1.91% ( %) Cemex ADR 825,384 5, Fomento Economico Mexicano ADR 100,347 7, Grupo Aeroportuario del Pacifico 118, Ternium ADR 166,798 3, ,

15 Portfolio Statement (continued) Market Value % of net 000 s assets Portfolio of investments 909, Net other assets 8, Net assets attributable to unitholders 917, Unless otherwise stated the above securities are ordinary shares or common stock and admitted to official stock exchange listings or collective investment schemes permitted under the FCA s Collective Investment Schemes sourcebook (COLL). 1 Collective Investment scheme permitted under the FCA s COLL, not listed on any exchange. 2 A related party to the fund. 15

16 Summary of Portfolio Transactions Largest purchases Largest sales For the six months ended 30 September 2017 Cost 000 s Cemex ADR 6,364 Bank Pekao 5,936 ITC 5,831 PICC Property & Casualty H 5,800 Korea Zinc 5,528 Midea Group 4,892 Hyundai Mobis 4,786 Samsung Fire & Marine Insurance 4,604 LUKOIL ADR 4,079 Fomento Economico Mexicano ADR 3,960 For the six months ended 30 September 2017 Proceeds 000 s Itau Unibanco Holding ADR 10,511 China Mobile 9,092 Grupo Financiero Galicia ADR 6,080 Axis Bank 5,935 NAVER 5,237 PTT Global Chemical 5,040 E-MART 4,900 LG Chem 4,435 Schroder International Selection Fund SICAV Frontier Markets Equity I Accumulation USD 1 4,261 Industrial & Commercial Bank of China H 4,102 1 A related party to the fund. 16

17 Statement of the Manager s Responsibilities The FCA s COLL Collective Investment Schemes sourcebook (COLL) requires the Manager to prepare accounts for each annual and half yearly accounting period, in accordance with United Kingdom Generally Accepted Accounting Practice, which give a true and fair view of the financial position of the fund and of its net revenue and the net capital gains on the property of the fund for the period. In preparing the accounts the Manager is required to: select suitable accounting policies and then apply them consistently; comply with the disclosure requirements of the Statement of Recommended Practice (SORP) for UK Authorised Funds issued by the Investment Management Association (IMA (now the Investment Association (IA))) in May 2014; follow generally accepted accounting principles and applicable accounting standards; prepare the accounts on the basis that the fund will continue in operation unless it is inappropriate to do so; keep proper accounting records which enable it to demonstrate that the accounts as prepared comply with the above requirements; make judgements and estimates that are prudent and reasonable. The Manager is responsible for the management of the fund in accordance with its Trust Deed, the Prospectus and the COLL, and for taking reasonable steps for the prevention and detection of fraud, error and non-compliance with law or regulations. The Manager s report and accounts for the period ended 30 September 2017 were signed on 20 November 2017 on behalf of the Manager by: J.A. Walker-Hazell Directors R.E. Stoakley 17

18 Statement of Total Return (unaudited) For the six months ended 30 September s 000 s 000 s 000 s Income Net capital gains 67, ,923 Revenue 16,578 12,844 Expenses (7,341) (5,877) Net revenue before taxation 9,237 6,967 Taxation (2,051) (1,358) Net revenue after taxation 7,186 5,609 Total return before distributions 74, ,532 Distributions (85) (109) Change in net assets attributable to unitholders from investment activities 74, ,423 Statement of Change in Net Assets Attributable to Unitholders (unaudited) For the six months ended 30 September s 000 s 000 s 000 s Opening net assets attributable to unitholders 847, ,003 Amounts receivable on issue of units 34,136 6,279 Amounts payable on cancellation of units (38,951) (69,893) (4,815) (63,614) Dilution adjustment Change in net assets attributable to unitholders from investment activities 74, ,423 Closing net assets attributable to unitholders 917, , The Opening net assets attributable to unitholders for the current period do not equal the Closing net assets attributable to unitholders for the comparative period as they are not consecutive periods. 18

19 Balance Sheet (unaudited) As at 30 September s 000 s Assets Investments 909, ,598 Current assets Debtors 8,965 6,119 Cash and bank balances 5,836 6,445 Total assets 924, ,162 Liabilities Creditors Bank overdrafts 0 (147) Distribution payable 0 (920) Other creditors (6,730) (1,560) Total liabilities (6,730) (2,627) Net assets attributable to unitholders 917, ,535 19

20 Notes to the Accounts (unaudited) Basis of preparation The accounts have been prepared under the historical cost basis, as modified by the revaluation of investments, and in accordance with the SORP for UK Authorised Funds issued by the IMA in May 2014 and in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 (The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102)). Accounting policies The accounting policies applied are consistent with those of the annual accounts for the year ended 31 March 2017 and are described in those annual accounts. 20

21 General Information Manager Schroder Unit Trusts Limited 31 Gresham Street London EC2V 7QA Authorised and regulated by the Financial Conduct Authority Registrar Schroder Unit Trusts Limited 31 Gresham Street London EC2V 7QA Authorised and regulated by the Financial Conduct Authority Investment Adviser Schroder Investment Management Limited 31 Gresham Street London EC2V 7QA Authorised and regulated by the Financial Conduct Authority Trustee J.P. Morgan Europe Limited Chaseside Bournemouth BH7 7DA Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority Administration Details Schroders FREEPOST RLTZ-CHSY-HBUT PO Box 1102 Chelmsford Essex CM99 2XX Investor Services Dealing Fax Independent Auditors PricewaterhouseCoopers LLP Atria One 144 Morrison Street Edinburgh EH3 8EX Authorisation Other information The fund is an authorised unit trust and is constituted pursuant to the COLL and is structured as a trust. The fund is a UCITS scheme for the purpose of the categorisation of the COLL. The Prospectus, the Key Investor Information Document and details of investment charges and costs are available on request or can be downloaded from our website 21

22 For further literature please contact Schroder Investor Services on or at or visit our website at Issued in November 2017 by Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Registered No: England. Authorised and regulated by the Financial Conduct Authority. w35641