Schroder Recovery Fund Z Accumulation GBP

UK Growth

Rated Fund 2019-20. A quietly aggressive, value-driven fund      

Although Schroder Recovery has disappointed due to its investment style being out of favour, we are sticking with it in the hope that recent signs of a rotation from growth to value stocks will become entrenched. It is one of Morningstar's higher-conviction ideas within the deep value UK equities space. Launched almost 50 years ago, the now £1.1 billion fund has been run by the same lead managers, Kevin Murphy and Nick Kirrage, since mid-2006. Their process seeks to identify companies that are trading at significant discounts to their perceived fair values.

It starts with a number of valuation screens. These reduce the universe to a manageable number of stocks for more detailed research. This involves a thorough understanding of profits and rigorous balance-sheet analysis. Management strength and capital allocation are deemed important in constructing the portfolio, which has around 40 holdings. Patience in the managers' approach should ultimately reward investors. "They live and breathe value investing - it is their deep commitment to value that I find most impressive," says Adrian Lowcock, head of personal investing at Willis Owen. "This fund would sit comfortably alongside a growth choice, as performance should be complementary."

FundCalibre is also a fan. Managing director Darius McDermott says: "Their style does mean that the fund can be top of the sector one year and bottom the next, but their core discipline of buying cheap stocks gives good long-term outperformance. For investors wanting exposure outside mainstream large company UK equities, this fund offers an intriguing selection of stocks, provided investors are aware that it could be a volatile ride."

Narrative and ratings content all as of January 2020.  

See all Money Observer rated funds
Name
Schroder Recovery Fund Z Accumulation GBP
Manager
Schroder Unit Trusts Limited
Type
Unit Trust
ISIN
GB00B3VVG600
Sector
UK All Companies
Launched
02/08/2011
OCF
0.91 %
Risk Rating
3
3 Year Sharpe
-0.52
3 Year Alpha
-4.70
Yield
4.9 %
Benchmark
FTSE AllSh TR GBP
The Fund aims to provide capital growth by investing in equity and equity related securities of UK companies that have suffered a severe setback in either share price or profitability. The Fund invests at least 80% of its assets in equity and equity related securities of UK companies. As the Fund is index-unconstrained it is managed without reference to an index. The Fund applies a disciplined value investment approach, seeking to invest in a select portfolio of companies that the Investment Manager believes are significantly undervalued relative to their long-term earnings potential.
Holding %
Standard Chartered PLC 5.18 %
The Royal Bank of Scotland Group PLC 5.16 %
Anglo American PLC 5.06 %
BP PLC 4.46 %
Barclays PLC 4.44 %
Pearson PLC 4.22 %
South32 Ltd 3.94 %
TP ICap PLC 3.86 %
Centrica PLC 3.84 %
Morrison (Wm) Supermarkets PLC 3.76 %
Region %
United Kingdom 85.35 %
Sector %
Financial Services 31.47 %
Basic materials 11.49 %
Consumer Defensive 10.36 %
Energy 9.11 %
Communication Services 8.27 %
Industrials 7.50 %
Healthcare 6.46 %
Utilities 5.79 %
Name
Schroder Unit Trusts Limited
Address
EC2Y 5AU, London, United Kingdom
UCITS
Yes
Legal Structure
Unit Trust

Managers

Nick Kirrage
Joined 07/21/2006

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 07/21/2006

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.

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