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The Fund takes the Australian Equity team’s ideas across the market cap spectrum, to construct a benchmark unaware Fund with the only restriction being that it can hold no more than 5% in any one stock.
The rationale for establishing the Fund in 2007 was the belief that the S&P/ASX300 index is not an optimally structured and diversified benchmark, because of the concentration of weight in a small number of stocks and sectors.
The Fund aims to maximise breadth by investing in at least 40 stocks through exposure to large, as well as small and micro cap stocks which typically don’t feature in a passive or large cap portfolio. Increasing the opportunity set increases the alpha opportunity, compared to the large cap bias inherent in an index-aware approach. This also results in a high active share, currently greater than 60%. Stocks with the best risk adjusted returns which have long-term business quality are included in the Fund, not simply because they feature in the index. Company weightings in the portfolio are therefore entirely ‘bottom-up’.
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This document is issued by Schroder Investment Management Australia Limited (ABN 22 000 443 274, AFSL 226473) (Schroders). It is intended solely for wholesale clients (as defined under the Corporations Act 2001 (Cth)) and is not suitable for distribution to retail clients. This document does not contain and should not be taken as containing any financial product advice or financial product recommendations. This document does not take into consideration any recipient’s objectives, financial situation or needs. Before making any decision relating to a Schroders fund, you should obtain and read a copy of the product disclosure statement available at www.schroders.com.au or other relevant disclosure document for that fund and consider the appropriateness of the fund to your objectives, financial situation and needs. You should also refer to the target market determination for the fund at www.schroders.com.au. All investments carry risk, and the repayment of capital and performance in any of the funds named in this document are not guaranteed by Schroders or any company in the Schroders Group. The material contained in this document is not intended to provide, and should not be relied on for accounting, legal or tax advice. Schroders does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this document. To the maximum extent permitted by law, Schroders, every company in the Schroders plc group, and their respective directors, officers, employees, consultants and agents exclude all liability (however arising) for any direct or indirect loss or damage that may be suffered by the recipient or any other person in connection with this document. Opinions, estimates and projections contained in this document reflect the opinions of the authors as at the date of this document and are subject to change without notice. “Forward-looking” information, such as forecasts or projections, are not guarantees of any future performance and there is no assurance that any forecast or projection will be realised. Past performance is not a reliable indicator of future performance. All references to securities, sectors, regions and/or countries are made for illustrative purposes only and are not to be construed as recommendations to buy, sell or hold. Telephone calls and other electronic communications with Schroders representatives may be recorded.
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