News releases

Schroders Matt Hudson says “it’s not too late for income”

Matt Hudson, manager of the Cazenove UK Equity Income Fund, is beginning to tilt the portfolio away from early cycle stocks and position it for the later recovery stages of the business cycle.

21/10/2013

Matt Hudson, manager of the Cazenove UK Equity Income Fund, is beginning to tilt the portfolio away from early cycle stocks and position it for the later recovery stages of the business cycle.

The Cazenove UK Equity Income Fund adopts a top-down business cycle approach, and combines three primary return drivers – premium yield stocks, capital returns and superior dividend growers - to maximise both income and capital returns for investors. By understanding the key economic themes and how they will impact stocks and sectors within the market, Hudson seeks to position the portfolio to take advantage of the opportunities offered by the business cycle.

As the cycle moves into the later stages of the recovery, Hudson is seeing opportunities in later cycle stocks, in particular within industrial cyclicals, support services and, selectively, growth defensives that will benefit from the current phase of the cycle.

In an environment where yields continue to fall, Hudson has been adding to the ‘dividend growers’ component of the fund, focusing on stocks which can deliver dividend growth across the cycle and for opportunities in later style stage cyclicals, with the potential for dividend recovery.

Over a three and five year period the fund is top decile and has been ranked first quartile in 2010, 2011 and 2012. Year to date the fund has returned 25.27 per cent compared to the IMA UK Equity Income sector which has returned 17.63 per cent.*

Matt Hudson, manager of the Cazenove UK Equity Income fund said:

“We have already seen early cycle stocks outperform the market, for example many consumer cyclicals stocks have already responded to the improvement in activity. We are now seeing opportunities in later cycle stocks in particular industrial cyclicals, support services and, selectively, growth defensives. After the market’s pre-occupation with safe high yield stocks, the most exciting opportunity for UK income investors is dividend growth, especially given the expectations for dividend growth the market is implying. ”

Robin Stoakley, Managing Director of UK Intermediary at Schroders commented:

“Cazenove UK Equity Income is a fund for all seasons. Over a one, three and five year period the fund has outperformed its peers and is an outstanding choice in the sector”

For further information, please contact:

Charlotte Banks

Tel: +44 (0)20 7658 2589/ charlotte.banks@schroders.com

Notes to Editors

*Source: FE Analytics. Total Return, Bid To Bid, Rebased in Pounds Sterling, as at 21st October 2013 For trade press only. To view the latest press releases from Schroders visit: http://ir.schroders.com/media

Schroders plc

Schroders is a global asset management company with £255.8 billion (EUR298.5 billion/$388.0 billion)* under management as at 2 July 2013. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors.

With one of the largest networks of offices of any dedicated asset management company, we operate from 34 offices in 27 countries across Europe, the Americas, Asia and the Middle East. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business.

Further information about Schroders can be found at www.schroders.com.

Issued by Schroder Investment Management Ltd, which is authorised and regulated by the Financial Conduct Authority. For regular updates by e-mail please register online at www.schroders.com for our alerting service.