Schroder All Maturities Corporate Bond Fund. Final Short Report 1 November 2015 to 31 October 2016

Transcription

1 Schroder All Maturities Corporate Bond Fund Final Short Report 1 November 2015 to 31 October 2016

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3 Schroder All Maturities Corporate Bond Fund Review of Investment Activities From 30 October 2015 to 31 October 2016, the price of I Accumulation (Gross) units on a dealing price to dealing price basis rose from p to p, an increase, net of fees, of 12.01%. In comparison, the Bank of America Merrill Lynch Sterling Non-Gilts All Stocks Index generated a total return of 10.51% 1 over the same period. 1 Source: Thomson Reuters Datastream. It was a volatile period for sterling corporate markets which declined sharply in the first half of the quarter of 2016 before staging a strong recovery in the second half of the quarter. In the middle of the year, the surprise Brexit result again weighed on sterling credit, before the Bank of England s August easing measures combined with cooler headed assessment of the UK s economic prospects drove material gains from late July. The portfolio generated a positive return and outperformed the benchmark index. The strongest outperformance was from carry, in both our sovereign and corporate bond holdings. Our duration stance also contributed, with our exposure to gilts gaining ground ahead of and immediately after the Brexit vote. More recently, strong sterling credit markets have given us the opportunity to reduce risk, focusing on adding to defensive areas of the market and reducing exposure to those financials we believe to be fully valued. Sterling credit has performed well into October. However, the uncertainty surrounding Brexit negotiations and the resilience of the UK economy going forward, plus US elections and European political risk has left the sterling corporate bond market more susceptible to market overreactions. We believe that the yield advantage available in longer dated sterling credit is still compelling, but we have positioned the portfolio in a balanced way, so as not to be overexposed to periods of risk aversion yet still harvest the credit risk premium where we see good value versus fundamentals. Fund Manager: Alix Stewart

4 Fund Information Interim Final Accounting dates 30 April 31 October Revenue allocation dates 30 June 31 December For the period For the year from For the year Ongoing charges figure to to to A Income units 1.12% 1.12% A Accumulation units 1.12% 1.12% I Income (Gross) units 0.27% 0.27% I Accumulation (Gross) units 0.27% 0.27% X Accumulation (Gross) units % 0.02% Z Income units 0.57% 0.56% % 2 Z Accumulation units 0.57% 0.56% % 2 1 The Annual management charge for X Accumulation (Gross) units is invoiced directly to unitholders and is therefore not included in the Ongoing charges figure for that unit class. 2 With effect from 19 February 2015, the Administration charge was increased from 0.00% to 0.10%. Performance Record Net Asset Net Asset Value as at Value as at Net Asset Value Fund performance pence per unit pence per unit % change A Income units A Accumulation units I Income (Gross) units I Accumulation (Gross) units X Accumulation (Gross) units Z Income units Z Accumulation units months 1 year 5 years Schroder All Maturities Corporate Bond Fund (0.78)% 12.01% 45.87% Bank of America Merrill Lynch Sterling Non-Gilts All Stocks Index (1.82)% 10.51% 42.67% Fund Source: I Accumulation (Gross) units on a dealing price to dealing price basis to Index Source: Thomson Reuters Datastream, total return to

5 Comparative Tables A Income units Financial year to 31 October p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges Operating charges (0.65) (0.65) (0.64) Return after operating charges* Distributions 1 (2.56) (2.60) (2.80) Closing net asset value *after direct transaction costs of Performance Return after charges (%) Other information Closing net asset value ( 000 s) 785 1,395 2,692 Closing number of units 1,330,234 2,515,533 4,747,122 Operating charges (%) Prices Highest dealing price (p) Lowest dealing price (p)

6 Comparative Tables (continued) A Accumulation units Financial year to 31 October p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges Operating charges (0.85) (0.83) (0.79) Return after operating charges* Closing net asset value Retained distributions *after direct transaction costs of Performance Return after charges (%) Other information Closing net asset value ( 000 s) 335 1,093 1,348 Closing number of units 417,647 1,499,040 1,874,602 Operating charges (%) Prices Highest dealing price (p) Lowest dealing price (p)

7 Comparative Tables (continued) I Income (Gross) units Financial year to 31 October p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges Operating charges (0.15) (0.15) (0.14) Return after operating charges* Distributions 1 (2.49) (2.52) (2.64) Closing net asset value *after direct transaction costs of Performance Return after charges (%) Other information Closing net asset value ( 000 s) 4,160 3,983 9,548 Closing number of units 7,434,478 7,614,710 17,984,045 Operating charges (%) Prices Highest dealing price (p) Lowest dealing price (p)

8 Comparative Tables (continued) I Accumulation (Gross) units Financial year to 31 October p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges Operating charges (0.68) (0.64) (0.60) Return after operating charges* Closing net asset value Retained distributions *after direct transaction costs of Performance Return after charges (%) Other information Closing net asset value ( 000 s) 345, , ,879 Closing number of units 129,278, ,897, ,389,096 Operating charges (%) Prices Highest dealing price (p) Lowest dealing price (p)

9 Comparative Tables (continued) X Accumulation (Gross) units Financial year to 31 October p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges Operating charges (0.02) (0.02) (0.02) Return after operating charges* Closing net asset value Retained distributions *after direct transaction costs of Performance Return after charges (%) Other information Closing net asset value ( 000 s) 491, , ,032 Closing number of units 351,600, ,867, ,886,210 Operating charges (%) Prices Highest dealing price (p) Lowest dealing price (p)

10 Comparative Tables (continued) Z Income units Financial year to 31 October p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges Operating charges (0.35) (0.33) (0.28) Return after operating charges* Distributions 1 (2.72) (2.59) (2.99) Closing net asset value *after direct transaction costs of Performance Return after charges (%) Other information Closing net asset value ( 000 s) 26,550 27,704 30,971 Closing number of units 42,405,960 47,241,188 52,069,210 Operating charges (%) Prices Highest dealing price (p) Lowest dealing price (p)

11 Comparative Tables (continued) Z Accumulation units Financial year to 31 October p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges Operating charges (0.47) (0.42) (0.35) Return after operating charges* Closing net asset value Retained distributions *after direct transaction costs of Performance Return after charges (%) Other information Closing net asset value ( 000 s) 23,383 12,057 11,457 Closing number of units 27,484,127 15,668,825 15,189,095 Operating charges (%) Prices Highest dealing price (p) Lowest dealing price (p) These figures have been rounded to 2 decimal places. 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.

12 Portfolio Information % of net % of net assets assets as at as at Spread of investments Euro Denominated Short Term Bonds Euro Denominated Medium Term Bonds Euro Denominated Long Term Bonds Euro Denominated Derivatives (0.24) (0.52) Sterling Denominated Short Term Bonds Sterling Denominated Medium Term Bonds Sterling Denominated Long Term Bonds Sterling Denominated Derivatives 0.19 (0.12) US Dollar Denominated Short Term Bonds US Dollar Denominated Medium Term Bonds US Dollar Denominated Long Term Bonds US Dollar Denominated Derivatives (0.35) (0.23) Net other assets % of net assets as at Major holdings National Grid Gas Finance 2.75% Notes AT&T 7% Notes Electricite de France 5.5% Notes European Investment Bank 6% Bonds Digital Stout Holding 4.25% Notes SNCF Reseau 4.83% Notes National Grid Gas Finance 2.625% Notes InterContinental Hotels Group 3.875% Notes Lloyds Bank 7.5% Notes Santander UK 5.75% Notes % of net assets as at Lloyds Bank 7.5% Notes Segro 6.75% Notes FirstGroup 5.25% Bonds Treasury 3.5% Stock European Investment Bank 6% Bonds Digital Stout Holding 4.25% Notes AT&T 7% Notes InterContinental Hotels Group 3.875% Notes Electricite de France 5.5% Notes SSE 3.875% Perpetual Bonds 1.05

13 Investment Objective & Policy The fund s investment objective is to provide capital growth and income primarily through investment in non-government debt securities. The fund may also invest in a wide range of investments including transferable securities, derivatives, cash, deposits, collective investment schemes and money market instruments. Risk Profile Risk and reward indicator Lower risk Potentially lower reward Higher risk Potentially higher reward 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 seeks to provide rewards whilst limiting price volatility. 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. More than 35% of the property of the fund may be invested in Government securities. The fund invests in higher yielding bonds (non-investment grade). The risk of default is higher with non-investment grade bonds than with investment grade bonds. Higher yielding bonds may also have an increased potential to erode your capital sum than lower yielding bonds.

14 Risk Profile (continued) The fund uses derivatives for specific investment purposes. This involves a higher degree of risk and may lead to a higher volatility in the unit prices of the fund. The Manager employs a risk management process to allow the Manager to measure derivative and forward positions and their contribution to the overall risk profile of the fund. As part of this risk management process, the Manager conducts daily value at risk analysis of the fund and performs both stress and back testing of the fund. As a result of the Annual management charge being charged wholly to capital, except for X Accumulation (Gross) units, the distributable revenue of the fund may be higher, but the capital value of the fund may be eroded which may affect future performance. For these reasons, the purchase of units should not normally be regarded as a short term investment. Report & Accounts This document is a short report for Schroder All Maturities Corporate Bond Fund for the year ended 31 October The long form Report & Accounts for the fund are available on our website or upon written request to Schroders, FREEPOST, RLTZ-CHSY-HBUT, PO Box 1102, Chelmsford, Essex CM99 2XX.

15 Other Information The information contained in this report is designed to enable unitholders to make an informed judgement on the activities of the fund during the period it covers and the results of those activities at the end of the period. For more information about the activities and performance of the fund during this and previous periods, please contact the Manager. 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 Schroders is required by the European Union Savings Directive to report payments to HM Revenue and Customs that are made by the fund to investors living in other European Union member states. 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. For investors security, calls to Schroder Investor Services may be recorded. Manager: 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. Independent Auditors: PricewaterhouseCoopers LLP, Atria One, 144 Morrison Street, Edinburgh EH3 8EX. For further literature please contact Schroder Investor Services on or at investorservices@schroders.com, or visit our website at Issued in December 2016 by Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Registered No: England. Authorised and regulated by the Financial Conduct Authority. W35659 MR082BF16

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