Schroder Equity Opportunities Fund

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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