Schroder Income Fund Z Accumulation GBP

UK Equity Income

Rated Fund 2018-19. Disciplined, value-driven approach

­If you’re looking to gain exposure to large, higher-yielding UK companies, this fund could be for you.

Managers Kevin Murphy and Nick Kirrage apply the same investment approach that they have had great success with on the Schroder Recovery fund, a newcomer to our Rated Funds selection this year.

For them, it’s all about the price you pay at entry. ­Their investment process starts with a number of valuation screens. ­They aim to identify companies trading at significant discounts to their perceived fair values, and they take a three- to five-year view on the stocks they buy

The fund’s key differentiator is its greater focus on dividends. ­The managers ideally look for stocks with high dividend yields and income growth. Unlike many of their peers, they are willing to invest in companies that have cut their dividends if they believe this reflects an inflection point in the company’s strategy and share price. ­The fund yields 3.6% and pays income half yearly.

Significant deviation from its FTSE All-Share index benchmark in terms of the sectors and sizes of companies it is exposed to can result in a performance profile that looks erratic on a calendar year view.

For example, in 2015 the fund underperformed the category average by 13.5% and was down in absolute terms by more than 7%, largely because of an underweight position in consumer defensives and overweight exposure to banks, miners and energy. The fund rebounded strongly in 2016, with most of the previous year’s detractors acting as contributors. Hence, investors who can tolerate such volatility have been rewarded over the long term.

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Name
Schroder Income Fund Z Accumulation GBP
Manager
Schroder Unit Trusts Limited
Type
Unit Trust
ISIN
GB00B3PM1190
Sector
UK Equity Income
Launched
11/05/2011
OCF
0.91 %
Risk Rating
3
3 Year Sharpe
0.63
3 Year Alpha
0.90
Yield
4.5 %
Benchmark
FTSE AllSh TR GBP
The Fund aims to provide income and capital growth in excess of the FTSE All Share (Gross Total Return) index (after fees have been deducted) over a three to five year period by investing in equity and equity related securities of UK companies.
Holding %
GlaxoSmithKline PLC 5.80 %
BP PLC 5.79 %
HSBC Holdings PLC 5.33 %
Anglo American PLC 5.17 %
Pearson PLC 4.84 %
Standard Chartered PLC 4.22 %
Morrison (Wm) Supermarkets PLC 3.89 %
South32 Ltd 3.73 %
Aviva PLC 3.67 %
Tesco PLC 3.63 %
Region %
United Kingdom 86.15 %
Sector %
Financial Services 29.52 %
Consumer Cyclical 13.23 %
Basic materials 12.80 %
Energy 11.13 %
Consumer Defensive 9.69 %
Healthcare 8.46 %
Name
Schroder Unit Trusts Limited
Address
EC2Y 5AU, London, United Kingdom
UCITS
Yes
Legal Structure
Unit Trust

Managers

Nick Kirrage
Joined 05/18/2010

Nick joined Schroders in 2001, initially working as part of the Pan European research team providing insight and analysis on a broad range of sectors from Transport and Aerospace to Mining and Chemicals. In 2006, Nick and Kevin Murphy took over management of a fund that seeks to identify and exploit deeply out of favour investment opportunities. In 2010, Nick and Kevin Murphy also took over management of the team's flagship UK value fund seeking to offer income and capital growth. Qualifications: CFA Charterholder; Meng in Aeronautical Engineering from Bristol University.

Kevin Murphy
Joined 05/18/2010

Kevin Murphy is a Co-head of the Global Value Team at Schroders, and a founding member in 2013 of this team of value investors who manage UK, European and global portfolios. He is co-manager of the Schroder UK Income, Schroder UK Recovery and Global Recovery funds. He joined Schroders in 2000 and is based in London. Kevin was a Fund Manager and Analyst at Schroders from 2000 to 2013, commencing his career in the UK equity fund management team before taking responsibility for the Pan European Construction and Building Materials sectors. He became co-manager of the Schroder Recovery Rund in 2006 and the Schroder Income Fund in 2010. Qualifications: CFA Charterholder; BSc in Economics from Manchester University.

Data provided by Morningstar.

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You should be aware that prices may fall as well as rise and that the income derived can go down as well as up. When buying or selling any investment that fluctuates in price or value you may get back less than you invested. Past performance is not necessarily a guide to future performance.