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Schroder Australian Equity Long Short Fund

The Schroder Australian Equity Long Short Fund takes a long/short approach to investing. Unlike long-only funds which rely on equities increasing in value, long/short funds allow investors to benefit from both rises and falls in value of selected companies within the fund. This is done by buying and holding investments that are expected to go up in value (long) and selling securities the fund does not own that are expected to go down (short).

The long/short approach allows the fund to access additional sources of return. It does this by allowing negative views to be rewarded through short selling and high conviction positive views to be rewarded through increased exposure, as cash generated from short sales can be used to take additional long positions.

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About the Schroder Australian Equity Long Short Fund

The Schroder Australian Equity Long Short Fund aims to outperform the S&P/ASX 200 Accumulation Index after fees over the medium term, by investing in a broad range of publicly listed companies primarily in Australia and New Zealand.

Schroders’ long/short strategy uses the proven stock selection process and resources adopted by our Australian equities team for the flagship Australian Equities Core strategy, which we have managed for over 50 years. The team will seek to assess the underlying business fundamentals of stocks predominately in the Australian and New Zealand listed equity markets, forming a view on the long-term value of these businesses, and investing accordingly.

The Fund draws on Schroders’ deep research capabilities, with a focus on company valuation, longer-term prospects and competitive advantage, as well as ESG factors. This means the impact and risk around issues such as climate change, environmental performance, labour standards and corporate governance are considered in the assessment of investments.

For full details of the target market for this fund, please refer to the Target Market Determination.

Investors should be aware that the use of short selling creates additional risk for the fund compared to long-only strategies. Please refer to the Product Disclosure Statement for further information.

Experienced team

Schroders has been successfully investing in Australian equities for over 50 years, and the fund’s portfolio managers have extensive experience in Australian companies and long short strategies.

Proprietary tools

Our red flag tool reveals patterns within companies that identify them as short selling opportunities.

Strong risk management

Clearly defined principles with diverse sector and stock exposures, and strict limits on short positioning.

Why invest in the Schroder Australian Equity Long Short Fund?

Return enhancer

The fund seeks to provide returns that are correlated with the market but have the potential to exceed the market return.

Diversifier

The fund increases the size of investable universe and reduces the reliance on just a few favoured sectors and major companies.

Style agnostic

We aim to be able to generate alpha in all market conditions.

Generally, the fund is 100% equity invested

The fund is suitable as part of the equity sleeve allocation.

How does the fund fit into investor portfolios?

The strategy provides an active exposure to the Australian equity market and should be used as part of the overall allocation to Australian equities.

Characterised by higher alpha potential and an increased volatility, this strategy would be a good diversifier to a core allocation.

Portfolio Composition

Ratings

Zenith Rating

The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) ("Zenith") rating (assigned APIR SCH3767AU, June 2022) referred to in this piece is limited to "General Advice" (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual, including target markets of financial products, where applicable, and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith's methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at Fund Research Regulatory Guidelines.

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Contact Schroders

Schroders is a world-class asset manager operating from 38 locations across Europe, the Americas, Asia, the Middle East and Africa.




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