Schroder Concentrated Australian Equity Separately Managed Account

Benefit from direct share ownership, backed by Schroders’ proven Australian equities investment process and 25-year track record.

Efficiency gains for advisers

Advisers are freed from some of the cumbersome administrative burden that comes with direct shares or managed funds, allowing them more time to focus on client needs and practice development.

Skilled stock selection

While owned directly, shares are monitored and managed by the awarded Schroders Australian Equities team, freeing the adviser to focus on whole-of-portfolio strategy for clients.

Full visibility and other benefits

Shares within an SMA are owned directly by the end investor so they will have absolute transparency on company holdings and may reap benefits in areas of tax, fees, franking credits and dividends

Advantages of using an SMA

Australian stocks are an enduringly popular and important part of many domestic investor portfolios. For financial advisers who advise on investments into direct Australian equities for their clients, the administration can be time-consuming.

Separately Managed Accounts, or SMAs, are a way to invest in direct equities coupled with the advantages of professional investment management. Distinctively, an SMA is not a pooled trust in which an investor receives units, but rather a portfolio of stocks of which the investor has beneficial ownership.  SMAs offer a more time-efficient, flexible solution for advisers, allowing them to focus on addressing client needs and running their businesses.

The Schroder Concentrated Australian Equity SMA has been developed with this in mind. Advisers can confidently offer their clients a professionally managed and benchmark-aware portfolio of select Australian equities.  Investors get the benefits of direct share ownership, but with the important added advantage that the stocks are selected by a proven investment process, honed by a global fund manager with over 25 years’ experience of managing Australian equities.

The result is transparency and flexibility for clients, who can see what selected stocks they hold, but with none of the administrative and compliance burdens associated with managing direct shares for advisers.

Why the Schroder Concentrated Australian Equity SMA?

The Schroder Concentrated Australian Equity SMA is an actively managed ‘concentrated’ portfolio of 18 – 26 Australian companies. It seeks to outperform the S&P/ASX 200 Accumulation Index over the medium term by investing in stocks listed in Australia and New Zealand, through fundamental stock analysis and valuation.

Designed to perform across all market conditions, the portfolio is co-managed by Adam Alexander and Ben Chan - experienced and proven investment professionals who have generated consistent outperformance since co-managing a similarly structured SMA from 2016.^^

Adam and Ben are part of the stable, award-winning and highly rated Schroders Australian equities team, headed by industry stalwart Martin Conlon. Thoughtfully contrarian, the 11-strong team – one of the largest and most experienced in the industry – uses the same investment process honed over 25 years ago. The size and scale of the team allows for waterfront stock coverage across the ASX 200 and into the ASX 300 - the team does not have to compromise on breadth or depth.  All stocks are valued under the Schroders investment process, which helps to avoid confirmation bias. The team and portfolio managers also have the advantage of being able to draw on the insights of Schroders’ worldwide investment team, as well as a collection of proprietary investment tools that provide a competitive edge.

Resilience

A resilient portfolio built to withstand economic cycles

Experience

Managed by one of the largest and most experienced Australian Equities teams

Reach

Team size and reach affords waterfront stock coverage over the ASX 200 and into the ASX 300

Consistency

Consistent and repeatable Australian equities investment process honed over 25 years

Track record with SMAs

Co-portfolio managers of SMA have established a 7-year track record in running Australian Equities SMAs, with top quartile performance^^

Risk management

Highly disciplined risk management

Our process


The team, which is built on a culture of accountability and debate, follows a rigorous and proven bottom-up investment process that seeks to attach ‘mid-cycle’ valuations to stocks while assessing the risks around these valuations.

Following this approach, a diversified benchmark-aware SMA portfolio of between 18 to 26 stocks is selected, which is designed with the aim of performance across all market conditions. Stock selection is based on the following three factors:

Valuation

The team thinks investment returns are based on the purchase price versus underlying value where value is driven by the net present value of ‘mid-cycle’ cashflow less debt.

Business analysis

The team analyses companies over their perceived ‘life cycles’ and focuses on the quality and sustainability of earnings, management ability and business risk.

Bottom-up views

The team prefers bottom-up fundamental analysis rather than applying top-down macro trends.

Further investment rigour is applied when considering portfolio construction, via:

Diversification

The team generally hold stocks in each sector to create an economically diverse portfolio that can perform through the economic cycle.

Risk controls

The team applies benchmark-related limits on stock and sector positions to help control relative risk.

Platform availability

Schroders BT Panorama Platform Logo

The Schroder Concentrated Australian Equity Portfolio is available on the BT Panorama platform. Please check with the platform operator for minimum investment amounts and fees.

Mason Steven platform logo (260x 176

The Schroder Concentrated Australian Equity Portfolio is available on the Mason Stevens platform. Please check with the platform operator for minimum investment amounts and fees.

HUB 24 Logo 528x400

The Schroder Concentrated Australian Equity Portfolio is available on the HUB24 platform. Please check with the platform operator for minimum investment amounts and fees.

Fund ratings and awards

Lonsec_Recommended_Rating_Logo_528x400

Why invest with Schroders?

Investing with Schroders means investing with a global company with over 200 years of experience and outstanding capabilities across asset classes. Schroders has managed portfolios for Australians since opening an office in Sydney in 1964. Having delivered competitive returns to clients over more than 25 years in Australian equity investing, we have grown to be trusted with $A9.1 billion* in FUM within our Australian Equities funds, and $A32.0 billion overall**. 

Worldwide, Schroders manages A$1402.3 billion (£750.6 billion/€866.2 billion/$956.9 billion), employing over 6,000 people in 38 locations around the world**.

Learn more about Australian equity investment at Schroders.

 

Find out more about the Schroder Concentrated Australian Equities SMA

Meet the fund managers

Investors in the Schroder Concentrated Australian Equity Separately Managed Account stand to benefit from the expertise and experience of the portfolio management teams across equity investing as well as from other teams within Schroders.

Slide 1 of 2

Ben Chan

Portfolio Manager - Australian Equities

Adam Alexander

Portfolio Manager - Australian Equities

“Our philosophy is driven by valuation and built on fundamental analysis; we’re not macro investors, we model every stock in the portfolio and our capacity, bandwidth and proprietary insights allow us to do this.”

The role of the Schroder Concentrated Australian Equity Separately Managed Account in portfolios

Why consider an Australian Equity Separately Managed Account?

A staple for many domestic portfolios, investing in Australian Equities offers investors the potential to earn returns from capital growth and dividends. 58% of Australian investors hold Australian shares directly, and shares remain Australia’s most popular investment option^.

For some investors, however, managing a share portfolio is not desirable, but investment in an Australian Equities fund may not be the right option either. This is where an SMA may be a better choice.

Benefits of an SMA over a managed fund:

One of the most significant advantages over a managed fund is direct beneficial share ownership for investors. Unlike managed funds, investors directly own the assets within their SMA. This direct ownership structure may offer tax advantages as well as savings in buy/sell spreads. In addition, SMAs are widely recognised for their transparency, which can be appealing to modern investors. Investors can have a comprehensive, full view of the assets contained within their selected model portfolio at any time they wish.

Benefits of an SMA over direct share ownership and management:

Another pivotal advantage of SMAs comes into play when it’s considered as an alternative to managing one’s own shares directly. SMAs are managed by skilled professional investment managers who continually monitor and manage the accounts, potentially resulting in better returns for the investor. Investing via an SMA can also offer cost savings in brokerage fees, compared to buying and selling shares via a retail broker. This feature is particularly important for smaller portfolios. The investment manager is also responsible for executing any corporate actions.

^ASX Australian Investor Study, 2023

SMA fund brochure

Learn more about our Australian equity separately managed account by reading the fund brochure.

Disclaimers

* As at 31 December 2023 (excludes JVs and Associates)
** As at 30 June 2023
^^ Top quartile performance as measured by Zenith Investment Partners in the Performance Update Report dated 30 June 2023 for the portfolio managers managing the Evans & Partners Australian Equities Growth Separately Managed Account. Performance is measured against the S&P/ASX 300 Accumulation Index. Inception is April 2011.

The information contained in this material is general information only and does not take into account your objectives, financial situation or needs. Before acting on the information contained in this material you should obtain a copy of the PDS from the platform provider and consider the appropriateness of the information in regard to your objective, financial situation and needs before making any decision about whether to invest, or continue to hold.

The repayment of capital and performance in the Fund is not guaranteed by Schroders or any other party. Opinions constitute our judgement at the time of issue and are subject to change. Past performance is not an indicator of future performance. Investment guidelines represented are internal only and are subject to change without notice. Schroders may record and monitor telephone calls for security, training and compliance purposes.

The rating issued October 2023 is published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec). Ratings are general advice only, and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Past performance information is not indicative of future performance. Ratings are subject to change without notice and Lonsec assumes no obligation to update. Lonsec uses objective criteria and receives a fee from the Fund Manager. Visit lonsec.com.au for ratings information and to access the full report. © 2023 Lonsec. All rights reserved.