Schroder MM International Fund Interim Short Report 29 February 2016 to 31 August 2016
Review of Investment Activities From 26 February 2016 to 31 August 2016, the price of A Accumulation units on a dealing price to dealing price basis rose 17.67%. In comparison, the FTSE* All World ex UK Index generated a total return of 21.28% 1 in sterling terms. 1 Source: Thomson Reuters Datastream. After a poor start to 2016, stock market sentiment recovered sharply from mid February onwards, barring a bout of turbulence surrounding the UK s EU referendum and its surprise Brexit result in June. Accommodative global monetary policy kept demand for government bonds high and yields fell to new lows. Commodities also gained strongly over the period. Through much of the period, we broadened out of our value skew within equities, increasing holdings such as Artemis Global Emerging Markets Fund, BlackRock Gold and General Fund and Findlay Park Latin American Fund. After the UK referendum we took profits in some of our more domestic facing cyclical holdings in Europe in expectation of heightened uncertainty and volatility. Indeed, our commodities and emerging market funds (such as those mentioned above) were our best performing holdings over the period. Looking ahead we believe our barbell approach combining selective areas of value across equity markets on the one hand, alongside higher levels of short term liquidity/cash is currently the most prudent. The growing threat of inflation should signal an end to this bull market in the beneficiaries of deflation ( safety, quality and income). While we can become more positive for the prospects of inflation related areas, we are cognisant that sectors like materials (which typically benefit from higher inflation) are also vulnerable in an economic slowdown. Co-Fund Manager: Marcus Brookes Co-Fund Manager: Robin McDonald Co-Fund Manager: Joe Le Jéhan
Fund Information Interim Final Accounting dates 31 August 28 February Revenue allocation dates 31 October 30 April For the period For the year Ongoing charges figure to 31.8.16 to 28.2.16 A Income units 1.93% 1 1.95% A Accumulation units 1.93% 1 1.95% S Income units 1.23% 1 1.25% Z Income units 1.43% 1 1.45% Z Accumulation units 1.43% 1 1.45% 1 The Ongoing charges figure is annualised based on the fees incurred during the accounting period. Performance Record Net Asset Net Asset Value as at Value as at Net Asset 31.8.16 28.2.16 Value Fund performance pence per unit pence per unit % change A Income units 136.97 117.07 17.00 A Accumulation units 137.34 117.38 17.00 S Income units 66.77 56.97 17.20 Z Income units 139.17 118.71 17.24 Z Accumulation units 140.42 119.71 17.30 3 months 6 months 5 years 14.24% 17.67% 92.78% FTSE* All World ex UK Index 15.76% 21.28% 97.74% Fund Source: A Accumulation units on a dealing price to dealing price basis to 31.8.16. Index Source: Thomson Reuters Datastream, total return in sterling terms to 31.8.16. * FTSE International Limited ( FTSE ) FTSE. FTSE is a trade mark of London Stock Exchange plc and The Financial Times Limited and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE s express written consent.
Performance Record (continued) A Accumulation Unit price range A Income units units S Income units Highest Lowest Highest Lowest Highest Lowest Financial year to dealing dealing dealing dealing dealing dealing 28 February p p p p p p 2014 105.86 93.77 106.15 94.02 51.18 1 48.79 1 2015 117.10 101.70 117.40 102.00 56.87 49.16 2016 124.60 107.30 125.00 107.60 60.58 52.45 Financial period to 31 August 2016 139.50 116.70 139.90 117.00 68.14 56.78 Z Income units Z Accumulation units Highest Lowest Highest Lowest Financial year to dealing dealing dealing dealing 28 February p p p p 2014 106.59 93.97 107.11 94.53 2015 118.40 102.50 119.10 103.10 2016 126.10 109.00 126.90 109.70 Financial period to 31 August 2016 141.80 118.30 143.00 119.30 Net revenue Financial year to S Income units Z Income units 28 February pence per unit pence per unit 2014 0.1136 0.1169 2015 Nil 2 Nil 2016 0.2777 0.2910 Financial period to 31 August 2016 0.1268 0.0791 Financial year to Z Accumulation units 28 February pence per unit 2014 0.1486 2015 Nil 2016 0.3016 Financial period to 31 August 2016 0.0918 These figures have been rounded to 4 decimal places. The A Income units class and A Accumulation units class have made no distributions to date. 1 The unit class was launched on 1 November 2013. 2 There was no distribution as the total amount distributable was below de minimis. 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 as at as at Spread of investments 31.8.16 28.2.16 Asia Pacific ex Japan Equity Funds 6.18 5.01 Cash Funds 6.70 7.30 Emerging Markets Equity Funds 3.13 0.70 European Equity Funds 15.10 19.91 Global Equity Funds 32.71 29.95 Japanese Equity Funds 11.54 10.40 US Equity Funds 22.00 23.00 US Dollar Denominated Derivatives 0.00 0.05 Net other assets 2.64 3.68 % of net assets as at Major holdings 31.8.16 GAM Global Diversified Fund Institutional Accumulation 17.17 Findlay Park AmericanFund USD 15.85 JOHCM Global Opportunities Fund X Income 9.98 Invesco Perpetual European Equity Fund Accumulation 8.19 Man GLG Japan CoreAlpha Fund Professional D Income 8.11 TM Sanditon European Fund F Accumulation 6.91 Schroder International Selection SICAV US Dollar Liquidity Fund I Accumulation USD 6.70 Fidelity Index US Fund P Income 6.15 Hermes Asia Ex-Japan Equity Fund F Accumulation 5.14 Man GLG Japan CoreAlpha Equity Fund I H Accumulation USD 3.43 % of net assets as at 28.2.16 Findlay Park American Fund USD 16.83 GAM Global Diversified Fund Institutional Accumulation 16.15 Invesco Perpetual European Equity Fund Accumulation 12.73 Man GLG Japan CoreAlpha Fund Professional D Income 10.40 JOHCM Global Opportunities Fund X Income 9.10 Schroder International Selection SICAV US Dollar Liquidity Fund I Accumulation USD 7.30 TM Sanditon European Fund F Accumulation 7.18 Fidelity Index US Fund P Income 6.17 Hermes Asia Ex-Japan Equity Fund F Accumulation 4.55 CF Odey Opus Fund R Income 1.85
Investment Objective & Policy The fund seeks to provide capital growth through investment in many geographic areas of the world and across various economic sectors. The fund will invest in a diversified portfolio of collective investment schemes and exchange traded funds which invest mainly in the shares of companies that have their registered office, or derive a significant proportion of their revenue, or are predominantly operating from, outside the UK. Although the investment policy of the fund is to invest mainly in collective investment schemes, the fund may also invest in closed ended funds, individual transferable securities, money market instruments, deposits, and cash or near cash. The fund may utilise derivatives and forward transactions for the purpose of efficient portfolio management. 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 is authorised as a non-ucits retail scheme. The investment and borrowing powers of these types of scheme are wider than those for UCITS funds whilst still aiming to provide a prudent spread of risk. 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 emerging markets and the Far East. This involves a high degree of risk and should be seen as long term in nature. 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. 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. More than 35% of the property of the fund may be invested in Government securities. The fund may invest 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. The fund may invest in derivatives and in alternative investments (including commodities, hedge funds, real estate funds and private equity) which involves a higher degree of risk and can be more volatile. They should only be considered as a long term investment. 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 for the period ended 31 August 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. 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 0800 718 777 or at investorservices@schroders.com, or visit our website at www.schroders.co.uk. Issued in October 2016 by Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Registered No: 04191730 England. Authorised and regulated by the Financial Conduct Authority. w35659 MRMMII16