Schroder Global Recovery Fund
The Schroder Global Recovery Fund applies a disciplined value investment approach, seeking to invest in a select portfolio of securities that are significantly undervalued relative to their long-term earnings potential.
The fund invests in companies worldwide that have classic recovery characteristics. Companies trade on low multiples of recovered profits, but where long-term prospects are believed to be good. Its major strength is the disciplined focus on buying out-of-favour companies at all stages in the investment cycle. While valuation-driven philosophies may fall in and out of favour, over longer time periods this investment style has shown the potential to deliver higher returns.
The fund’s investment objective is to provide capital growth and to outperform the MSCI World Index.
The benefits of investing in the Fund include:
Unconstrained: The Fund is completely benchmark unaware with a focus on stocks that will deliver absolute returns over the long term
Contrarian: The Fund adopts a disciplined value driven approach
Bottom up: The investment team has a strong focus on micro analysis, not macro, using skills in company analysis and valuation
Low turnover: A thoughtful, patient, investment style, targeting long-term value creation.
All investments involve risks however Schroders actively re-assesses and
manages risk at every stage of the investment process.
The main risks specifically with investing in this Fund are market risk, equities and company risk, derivatives risk and risks associated with international investing such as movements in exchange rates or impositions.
For further details about the risks of investing in this Fund please refer
to the Product Disclosure Statement.
|Fund Inception date||August 2017 (strategy inception October 2013)|
Wholesale class - $20,000
|Buy/sell spread^||0.15% on application and 0.10% on withdrawal|
|Management costs (ICR)||
Wholesale class - 0.98% p.a.
|Distributions||Normally last business day of June and December|
Wholesale class SCH0095AU
Professional class SCH4757AU
|mFund code||SCH45 (only wholesale class available)|
^Subject to change. Refer to the Buy/Sell spreads page in the Fund Centre
HOW THE FUND IS MANAGED
Our investment process can be summarised in three stages:
Quantitative screens are used to highlight companies that have underperformed the equity market, are attractive on a variety of valuation measures and have operating returns substantially below their peers.
We believe strongly in the benefits of independent fundamental research.
We spend considerable time constructing a model for each company based
on at least one cycle’s worth of company report and accounts.
The main aims of the model are:
− To verify the output of the screening process and / or the veracity of the company’s financial disclosure
− To understand the main dynamics of the business; operating leverage, cash conversion, sales volatility etc.
− Investigate balance sheet strength and perform sensitivity analysis
− Investigate historic levels of profitability and enable conservative modelling of recovery.
We view risk as the probability of permanent financial loss and to achieve superior long term returns, capital losses need to be minimised.
We therefore look at risk in absolute terms focusing on three main sources of risk: We attempt to minimise absolute risk by concentrating on companies with low valuations, resilient earnings and strong balance sheets. This margin of safety is designed to protect capital in event of an unexpected adverse outcome.