Schroder QEP Global Active Value Fund Interim Short Report 21 June 2016 to 20 December 2016
Schroder QEP Global Active Value Fund Review of Investment Activities From 20 June 2016 to 20 December 2016, the price of I Accumulation units on dealing price to dealing price basis rose 28.44%. In comparison, the MSCI World Index generated a net return of 26.97% 1 in sterling terms. 1 Source: Thomson Reuters Datastream. Global equity markets made strong gains over the period, as central bank policies remained supportive and concerns over global economic growth receded. Markets rotated away from long running and over extended trends such as the reach for yield and the perceived safety of minimum volatility. Instead, there was a reassessment of the prospects for more economically sensitive and value stocks. Against this backdrop, the fund outperformed the index. Our avoidance of expensive areas of consumer staples, real estate and healthcare was rewarded, especially towards the end of the year. Positioning within the materials sector aided relative returns, particularly the overweight allocation to mining. Also within resources, stock selection in the energy sector added value. Financials made a very strong showing towards the end of 2016 and the fund s holdings added value. This was particularly the case for life & health insurers and banks. The most significant detractor was the telecommunications sector, where our good value holdings in the Pacific region were dragged down by the rather indiscriminate sell off in defensive (less economically sensitive) stocks. By region, North America made the strongest positive contribution to relative returns, while our holdings in emerging markets in Latin America and Europe also added value. Stock selection in Japan was a detractor. The fund maintains high exposure to financials despite trimming many US positions after recent strong gains. We have reinvested into more attractively valued opportunities in Europe and Asia. After the sell off in defensive stocks, we took advantage of some attractive valuations to add to selected stocks in the consumer staples and healthcare sectors. Our exposure to emerging markets is still above our long term average. Fund Manager: Justin Abercrombie
Fund Information Interim Final Accounting dates 20 December 20 June Revenue allocation date 20 August For the period For the year Ongoing charges figure to 20.12.16 to 20.6.16 A Income units 1.67% 1 1.68% A Accumulation units 1.67% 1 1.68% I Income units 0.77% 1 0.78% I Accumulation units 0.77% 1 0.78% S Income units 0.55% 1 0.55% X Income units 2 0.02% 1 0.03% X Accumulation units 2 0.02% 1 0.03% Z Income units 0.92% 1 0.93% Z Accumulation units 0.92% 1 0.93% 1 The Ongoing charges figure is annualised based on the fees incurred during the accounting period. 2 The Annual management charge for X Income units and X Accumulation units is invoiced directly to unitholders and is therefore not included in the Ongoing charges figure for these unit classes. Performance Record Net Asset Net Asset Value as at Value as at Net Asset 20.12.16 20.6.16 Value Fund performance pence per unit pence per unit % change A Income units 86.50 67.34 28.45 A Accumulation units 100.67 78.38 28.44 I Income units 86.80 67.29 28.99 I Accumulation units 114.11 88.46 29.00 S Income units 69.51 53.82 29.15 X Income units 91.57 70.73 29.46 X Accumulation units 129.80 100.28 29.44 Z Income units 86.52 67.12 28.90 Z Accumulation units 95.51 74.10 28.89 3 months 6 months 5 years Schroder QEP Global Active Value Fund 9.40% 28.44% 101.56% MSCI World Index 8.89% 26.97% 113.03% Fund Source: I Accumulation units on a dealing price to dealing price basis to 20.12.16. Index Source: Thomson Reuters Datastream, net return in sterling terms to 20.12.16.
Performance Record (continued) A Income A Accumulation I Income Unit price range units units units Highest Lowest Highest Lowest Highest Lowest Financial year to dealing dealing dealing dealing dealing dealing 20 June p p p p p p 2014 67.21 57.99 75.25 64.90 67.72 57.92 2015 75.49 63.67 85.55 72.16 75.95 63.79 2016 71.43 59.94 81.98 68.78 71.90 60.23 20 December 2016 86.42 67.08 100.60 78.07 86.74 67.04 I Accumulation S Income X Income units units units Highest Lowest Highest Lowest Highest Lowest Financial year to dealing dealing dealing dealing dealing dealing 20 June p p p p p p 2014 83.49 71.40 54.27 49.16 71.67 60.87 2015 95.59 80.28 60.86 51.06 80.30 67.20 2016 92.40 77.41 57.62 48.25 76.03 63.61 20 December 2016 114.00 88.12 69.45 53.62 91.51 70.47 X Accumulation Z Income Z Accumulation units units units Highest Lowest Highest Lowest Highest Lowest Financial year to dealing dealing dealing dealing dealing dealing 20 June p p p p p p 2014 93.35 79.29 67.45 57.78 70.15 60.08 2015 107.50 89.94 75.65 63.60 80.21 67.42 2016 104.60 87.52 71.63 60.02 77.42 64.87 20 December 2016 129.70 99.90 86.45 66.87 95.43 73.81 Net revenue Financial year to A Income units A Accumulation units I Income units 20 June pence per unit pence per unit pence per unit 2014 0.8305 0.9068 1.3734 2015 0.8745 0.9813 1.4567 2016 0.9495 1.0924 1.5446 20 December 2016 Nil Nil Nil Financial year to I Accumulation units S Income units X Income units 20 June pence per unit pence per unit pence per unit 2014 1.6928 1.2026 1.9164 2015 1.8335 1.2855 2.0519 2016 1.9847 1.3559 2.1377 20 December 2016 Nil Nil Nil
Performance Record (continued) Financial year to X Accumulation units Z Income units Z Accumulation units 20 June pence per unit pence per unit pence per unit 2014 2.4898 1.2798 1.3265 2015 2.7232 1.3512 1.4254 2016 2.9515 1.4464 1.5546 20 December 2016 Nil Nil Nil 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. Portfolio Information % of net % of net assets assets Spread of as at as at investments 20.12.16 20.6.16 China 0.88 0.89 Hong Kong 2.77 2.22 India 0.34 0.00 Indonesia 0.08 0.33 Japan 9.74 10.98 Malaysia 0.06 0.03 Philippines 0.05 0.07 Singapore 0.93 1.35 South Korea 2.46 1.68 Taiwan 2.57 2.11 Thailand 1.07 0.63 Australia 2.91 2.27 New Zealand 0.08 0.12 Bermuda 1.76 1.11 Brazil 0.96 0.89 British Virgin Islands 0.34 0.21 Canada 1.68 1.26 Cayman Islands 0.51 0.43 Chile 0.09 0.12 Colombia 0.00 0.04 Mexico 0.09 0.00 Peru 0.10 0.04 Puerto Rico 0.02 0.05 United States 39.36 39.89 % of net % of net assets assets as at as at 20.12.16 20.6.16 Austria 0.08 0.10 Belgium 0.45 0.61 Denmark 0.63 0.00 Finland 0.35 1.29 France 3.42 3.24 Gabon 0.01 0.01 Germany 2.52 2.12 Greece 0.14 0.10 Guernsey 0.32 0.33 Hungary 0.05 0.14 Ireland 0.33 0.08 Israel 1.05 1.31 Italy 0.56 0.45 Jersey 0.32 0.25 Luxembourg 0.21 0.23 Marshall Islands 0.00 0.03 Netherlands 1.60 1.66 Norway 1.08 1.47 Poland 0.52 0.29 Portugal 0.01 0.01 Russia 1.18 0.78 South Africa 1.41 1.61 Spain 0.52 0.34 Sweden 1.78 1.86
Portfolio Information (continued) % of net % of net assets assets Spread of as at as at investments 20.12.16 20.6.16 Switzerland 4.00 3.60 Turkey 0.51 0.33 United Kingdom 6.27 10.41 Japanese Yen Denominated Derivatives 0.00 (0.18) South African Rand Denominated Derivatives 0.00 (0.03) % of net % of net assets assets as at as at 20.12.16 20.6.16 Turkish Lira Denominated Derivatives 0.00 (0.01) US Dollar Denominated Derivatives 0.02 (0.09) Net other assets 1.81 0.94 % of net assets as at Major holdings 20.12.16 Astellas Pharma 0.78 Intel 0.77 Johnson & Johnson 0.77 Novartis 0.77 Pfizer 0.77 Wal-Mart Stores 0.76 KDDI 0.76 NTT DOCOMO 0.76 Cisco Systems 0.76 Roche Holding 0.76 % of net assets as at 20.6.16 Oracle 0.77 Taiwan Semiconductor Manufacturing ADR 0.77 Quest Diagnostics 0.76 Intel 0.75 Novartis 0.75 KDDI 0.75 Roche Holding 0.75 QUALCOMM 0.74 International Business Machines 0.73 Telstra 0.73 Investment Objective & Policy The fund s investment objective is to provide a total return primarily through active investment in a value style biased portfolio of equity and equity related securities of companies worldwide. In order to achieve the objective, the Investment Manager will invest in a broadly diversified portfolio of securities selected through the application of quantitative investment techniques. The fund may also invest in a wide range of investments including transferable securities, derivatives, cash, deposits, collective investment schemes, warrants and money market instruments.
Risk Profile Risk and reward indicator Lower risk Potentially lower reward Higher risk Potentially higher reward 1 2 3 4 5 6 7 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 is index unconstrained and has the potential for greater volatility. 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 fund may invest in volatility index futures, although their use is intended to reduce volatility this may not always be the consequence and certain situations can cause greater volatility. 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 QEP Global Active Value Fund for the period ended 20 December 2016. The long form Report & Accounts for the fund are available on our website www.schroders.co.uk or upon written request to Schroders, FREEPOST, RLTZ-CHSY-HBUT, PO Box 1102, Chelmsford, Essex CM99 2XX. 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 www.schroders.co.uk. 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 0800 718 777 or at investorservices@schroders.com, or visit our website at www.schroders.co.uk. Issued in February 2017 by Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Registered No: 04191730 England. Authorised and regulated by the Financial Conduct Authority. w35659 MR015BI16