Schroder UK Mid Cap Fund

“We apply a high conviction approach, managing a focused portfolio of resilient companies which are either disruptors, challenging the status quo, or are well-established companies which can grow sustainably as they reinvent themselves in response to disruption."

Jean Roche and Andy Brough

Co-Managers of the Schroder UK Mid Cap Fund plc

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Introduction

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Uncovering the leading growth companies of the future

The opportunity

– A high conviction portfolio targeting 40-50 holdings, with the goal of delivering a return in excess of the FTSE 250 ex Investment Trusts Index, offering exposure to a wide spectrum of investment sectors and themes and both UK and overseas earnings.

– The Manager seeks out resilient companies that are capable of delivering high risk-adjusted returns with rising cash flows and earnings. They can be disruptors, which challenge the status quo within the marketplace, or established companies which can grow sustainably as they reinvent themselves in response to the disruption. Resilience comes from strong finances, leading ESG/sustainability practices and clear strategic direction.

– The investment process is proven and repeatable, having generated returns of 15.6% p.a. versus 12.94% p.a. for the benchmark since Schroders became the Manager in 2003*.

*Source: Schroders, Morningstar, 1 May 2003 to 31 August 2021. Net asset value total return compared to the benchmark of the FTSE All-Share ex Investment Trusts ex FTSE 100 TR Index until 2011, and subsequently the FTSE 250 ex Investment Trusts Index. Past performance is not a guide to future performance and may not be repeated.

Most recent Annual General Meeting presentation

Due to the Government's Stay at Home orders in February 2021, we delivered the fund manager's presentation as part of the Company's Annual General Meeting virtually. A recording of this presentation is available below.

You can download a copy of the presentation slides here.

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Meet the managers

Jean Roche

Lead Manager

Jean joined Schroders in 2016 and became Fund Manager of Schroder UK Mid Cap Fund plc in February 2021, having been Co-Fund Manager since September 2016. Jean’s investment career started in 1999 after graduating with a BA in Mathematics and French and an MSc in Financial and Industrial Mathematics. Previously, she worked at Morgan Stanley and Panmure Gordon, before moving to Hargreave Hale in 2013 as a fund manager. Jean is a CFA Charterholder.

Andy Brough

Co-Fund Manager

Andy has managed the well-known Schroder UK Mid 250 Fund since its launch in November 1999. His investment career started in 1987 when he joined Schroders as a UK equity fund manager. Previously he worked at Price Waterhouse where he qualified as a chartered accountant. Andy is head of the Schroders London-based pan-European small and mid cap team.

Investment objective

The Company's investment objective is to invest in mid cap equities with the aim of providing a total return in excess of the FTSE 250 ex-Investment Trusts Index.

Investment policy

The Manager applies a high conviction approach, managing a focused portfolio of resilient companies that are all capable of delivering excess risk-adjusted returns with rising cash flows and earnings. Fundamental research forms the basis of each investment decision taken by the Manager.

The Company will predominantly invest in companies from the FTSE 250 Index, but may hold up to 20% of its portfolio in equities and collective investment vehicles outside the benchmark index.

The Company may also invest in other collective investment vehicles where desirable, for example to provide exposure to specialist areas within the universe.

The Company has the ability to use gearing for investment purposes up to 25% of total assets.

The investment process

In order to meet the investment objective, the Manager applies a high conviction approach, managing a focused portfolio of high quality companies that are all capable of delivering excess risk-adjusted returns with rising cash flows and earnings. These returns can come from disruptors, which change the status quo within the marketplace, or from established companies which can grow sustainably as they reinvent themselves in response to the disruption. The resilience we also look for comes from strong finances, leading ESG (environment, social and governance) practices and clear strategic direction.

Investor profile

May be suitable for investors who:

are aiming for capital growth and willing to invest in a higher-risk fund
are willing to accept possible short-term losses for the benefit of potential long-term gains
are looking for exposure to small and medium-sized UK companies
are comfortable with the risks associated with an equity-based investment
have a medium- to long-term investment horizon of three to five years or more

May not be suitable for investors who:

are seeking a lower-risk fund
don’t want to put their capital at risk
are uncomfortable with the level of risk associated with equity-based investment
have a short-term investment horizon
can’t tolerate short-term volatility
are uncomfortable with the risks associated with investing in small and medium-sized companies

What are the risks?

Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

The Company invests in smaller companies that may be less liquid than in larger companies and price swings may therefore be greater than investment companies that invest in larger companies.

The Company will invest solely in the companies of one country or region. This can carry more risk than investments spread over a number of countries or regions.

As a result of the fees and finance costs being charged partially to capital, the distributable income of the Company may be higher but there is the potential that performance or capital value may be eroded.

The Company may borrow money to invest in further investments, this is known as gearing. Gearing will increase returns if the value of the investments purchased increase in value by more than the cost of borrowing, or reduce returns if they fail to do so.

Getting started

Investment trusts offer a flexible and effective way to gain exposure to some of the world's most dynamic markets and regions, and can be used to meet a variety of investment outcomes. For more information on how Schroder UK Mid Cap Fund Plc shares can be bought and sold, visit our How to invest page.

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Contact Schroders

Schroders is a world-class asset manager operating from 37 locations across Europe, the Americas, Asia, the Middle East and Africa.

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For any further questions, please contact us.

Please remember that the value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.

Marketing material.

Issued by Schroder Unit Trusts Limited, 1 London Wall Place, London EC2Y 5AU. Registered Number 4191730 England.

Schroder Unit Trusts Limited is an authorised corporate director, authorised unit trust manager and an ISA plan manager, and is authorised and regulated by the Financial Conduct Authority.

On 17 September 2018 our remaining dual priced funds converted to single pricing and a list of the funds affected can be found in our Changes to Funds. To view historic dual prices from the launch date to 14 September 2018 click on Historic prices.

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