Schroder Recovery Fund Z Accumulation GBP

UK Growth

New for 2019. A quietly aggressive, value-driven fund

Schroder Recovery has a distinct tilt towards value stocks and has held up very well in recent market weakness. Growth styles have done very nicely in recent years – so much so that most investors’ portfolios will be skewed towards these funds, and this is a strong contender for investors looking to redress the balance.

Launched almost 50 years ago, the £1.2 billion fund has been run by the same lead managers since mid-2006. Kevin Murphy and Nick Kirrage have demonstrated a strong working relationship and shared a sound investment philosophy over the past 12 years.

Their process, which seeks to identify companies that are trading at significant discounts to their perceived fair values, starts with a number of valuation screens. These reduce the universe to a manageable number of stocks on which the managers undertake 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.

The fund is one of Morningstar’s higherconviction ideas in the deep value UK equities space. FundCalibre is also a fan of this fund on the basis that patience in the managers’ approach has proved rewarding.

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 01 January 2019.

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
1
3 Year Sharpe
0.93
3 Year Alpha
2.28
Yield
2.5 %
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 %
South32 Ltd 5.58 %
BP PLC 5.18 %
The Royal Bank of Scotland Group PLC 4.88 %
HSBC Holdings PLC 4.87 %
Anglo American PLC 4.79 %
Pearson PLC 4.67 %
GlaxoSmithKline PLC 4.50 %
Centrica PLC 4.37 %
Standard Chartered PLC 4.26 %
Morrison (Wm) Supermarkets PLC 4.18 %
Region %
United Kingdom 83.29 %
Australasia 6.13 %
Sector %
Financial Services 32.39 %
Basic materials 13.43 %
Consumer Cyclical 11.22 %
Energy 8.64 %
Consumer Defensive 8.56 %
Healthcare 7.80 %
Utilities 6.87 %
Technology 5.79 %
Industrials 5.16 %
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.

Data provided by Morningstar.

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