Global Multi-Asset Income Fund Schroder Interim Short Report

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Schroder
Global Multi-Asset
Income Fund
Interim Short Report
19 December 2014 to 20 July 2015
Schroder Global Multi-Asset
Income Fund
Review of Investment Activities
From 19 December 2014 to 20 July 2015, the price of
Z Accumulation units on a dealing price to dealing price basis
fell 1.18%.
In the first quarter, the fund delivered a slightly positive return. In January
and February our allocations to investment grade, emerging market
dollar bonds, equity and high yield contributed to fund performance. In
March, the fund declined with US high yield and emerging market
exposures detracting as weakness in energy prices weighed on the
energy sector.
The fund experienced a loss over the second quarter as a result of asset
classes declining across the board, from equities to credit and
government bonds. This move was driven by an adjustment in inflation
expectations, from deflationary to inflationary concerns. High dividend
equities have underperformed broader equity markets over the same
period, as investors sought growth in a low growth environment, whilst
shunning value and dividend equities.
The fund’s most recent drawdown was driven by the sharp spike in
government bond yields (and real rates), which was driven by a shift in
inflation expectations. We maintain a preference for US high yield, given
the relative strength of the US economy and expectations for continued
subdued default rates
We expect US growth to reaccelerate at a faster pace than the rest of
the world along with a pick-up in growth in the eurozone. This should
place upward pressure on bond yields and the US dollar. We expect
equity markets, such as Europe and Japan, which are supported by
monetary easing and weak currencies, to do well, and have rebuilt
positions in these markets. In fixed income, we expect this environment
to be more supportive of developed market high yield and investment
grade credit.
Co-Fund
Manager:
Co-Fund
Manager:
Aymeric
Forest
Iain
Cunningham
Schroder Global Multi-Asset Income Fund
Fund Information
Accounting dates
Interim
Final
20 July
20 January
The fund’s accounting dates are on the 20th of each month with associated revenue
allocation dates on the 20th of the following month.
For the period
to 20.7.15
Ongoing charges figure
Z Income units
1.03%1
Z Accumulation units
1.03%1
1 The Ongoing charges figure is annualised based on the fees incurred during the accounting period.
Performance Record
Net Asset
Value as at
20.7.15
pence per unit
Fund performance
Z Income units
48.07
Z Accumulation units
49.15
Schroder Global Multi-Asset
Income Fund
3 months
6 months
Since launch
(3.67%)
(1.91%)
(1.18%)
Fund Source: Z Accumulation units on a dealing price to dealing price basis to 20.7.15.
Schroder Global Multi-Asset Income Fund was launched on 19.12.14.
Please remember that past performance is not a guide to future performance and it might not be repeated. The value
of investments and the revenue from them may go down as well as up and investors may not get back the amount
originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money.
Unit price range
Year to 31 December
Z Income shares
Highest
Lowest
dealing
dealing
p
p
Z Accumulation shares
Highest
Lowest
dealing
dealing
p
p
2014
50.15
50.00
50.16
50.00
2015 to 20 July
51.24
47.85
51.66
48.72
Net revenue
Year to 31 December
2014
2015 to 20 July
Z Income shares
pence per unit
Z Accumulation shares
pence per unit
Nil
Nil
1.0986
1.1090
Schroder Global Multi-Asset Income Fund
Portfolio Information
Spread of investments
% of net
assets
as at
20.7.15
Australia
1.04
Belgium
0.12
Bermuda
0.05
Brazil
0.82
Canada
1.14
Cayman Islands
0.05
China
Denmark
% of net
assets
as at
20.7.15
Chilean Peso Denominated
Derivatives
(0.01)
Colombian Peso Denominated
Derivatives
(0.03)
Euro Denominated Medium
Term Bonds
0.33
1.93
Euro Denominated Long
Term Bonds
0.75
0.06
Euro Denominated Derivatives
0.45
Finland
0.29
France
0.23
Hungarian Forint Denominated
Short Term Bonds
0.52
Germany
2.15
Hungarian Forint Denominated
Derivatives
(0.01)
Hong Kong
0.27
Indian Rupee Denominated
Derivatives
0.03
Indonesian Rupiah Denominated
Medium Term Bonds
0.64
Japanese Yen Denominated
Derivatives
0.02
Malaysian Ringgit
Short Term Bonds
0.37
Mexico Peso Denominated
Short Term Bonds
0.70
Mexico Peso Denominated
Medium Term Bonds
0.19
Norwegian Krone Denominated
Derivatives
0.01
Polish Zloty Denominated
Short Term Bonds
0.73
Polish Zloty Denominated
Derivatives
0.01
Russian Ruble Denominated
Short Term Bonds
0.43
Singapore Dollar Denominated
Derivatives
0.01
0.09
South African Rand Denominated
Medium Term Bonds
0.33
0.88
South African Rand Denominated
Long Term Bonds
0.34
0.16
Sterling Denominated
Medium Term Bonds
1.67
Ireland
0.10
Italy
0.87
Japan
0.09
Luxembourg
0.18
Malaysia
0.28
Mexico
0.05
Netherlands
1.03
Norway
0.24
Poland
0.16
Russia
0.31
Singapore
0.55
South Africa
0.88
Spain
0.17
Sweden
0.36
Switzerland
1.44
Taiwan
0.28
United Kingdom
5.21
United States
Australian Dollar Denominated
Derivatives
Brazilian Real Denominated
Short Term Bonds
Canadian Dollar Denominated
Derivatives
14.63
Schroder Global Multi-Asset Income Fund
Portfolio Information (continued)
Spread of investments
% of net
assets
as at
20.7.15
Sterling Denominated
Long Term Bonds
2.10
Sterling Denominated Derivatives
% of net
assets
as at
20.7.15
US Dollar Denominated
Short Term Bonds
6.28
(0.05)
Swedish Krona Denominated
Derivatives
US Dollar Denominated
Medium Term Bonds
24.05
0.02
Swiss Franc Denominated
Derivatives
US Dollar Denominated
Long Term Bonds
15.41
0.02
Turkish Lira Denominated
Short Term Bonds
US Dollar Denominated
Derivatives
0.15
0.73
Net other assets
7.61
Turkish Lira Denominated
Medium Term Bonds
0.09
Major holdings
% of net
assets
as at
20.7.15
iShares DJ Stoxx Global Select Dividend 100 UCITS ETF
1.30
Brazil Notas do Tesouro Nacional Serie 10% Bonds 2017
0.88
Friends Life Holdings 8.25% Notes 2022
0.86
Old Mutual 8% Notes 2021
0.81
MGM Resorts International 6% Notes 2023
0.78
Constellium 8% Notes 2023
0.76
Microsoft
0.70
Wells Fargo
0.67
Ardagh Finance Holdings 8.625% Notes 2019
0.66
CHS 6.875% Notes 2022
0.65
Schroder Global Multi-Asset Income Fund
Investment Objective & Policy
The fund’s investment objective is to provide income and capital growth over
the medium to long term by investing globally in equities, bonds and
alternative assets. The fund aims to provide investors with an annual
distribution payment of between 4% to 6%. There is no guarantee that this
objective will be met. There is a risk to an investor’s capital. Unitholders may
not get back the amount originally invested.
The fund will actively allocate between a wide range of investments including
equities and equity related securities, bonds and other fixed or floating rate
securities (including, but not limited to, asset backed securities and
mortgage backed securities) issued by governments, government agencies,
supra-national or corporate issuers, and alternative asset classes (including
but not limited to commodities and real estate) indirectly through exchange
traded funds or real estate investment trusts.
The fund may invest up to 60% of the fund’s value in bonds and other fixed
or floating rate securities which are rated by S&P as BB+ or lower, or an
equivalent rating by another rating agency. The fund will not invest more than
10% of the fund’s value in bonds rated by S&P as CCC or lower, or an
equivalent rating by another rating agency, or in unrated securities.
The fund may invest up to 10% of the fund’s value in collective investment
schemes.
The fund may hold up to 20% of the fund’s value in cash, deposits and
money markets instruments. The fund may use derivative instruments for
investment purposes as well as for efficient management. The use of
derivative instruments may include but is not limited to taking long or short
exposures to credit markets, interest rates, foreign exchange currency
contracts and to various sectors within these markets.
Schroder Global Multi-Asset Income Fund
Risk Profile
Risk and reward indicator
Lower risk
Potentially lower reward
1
2
Higher risk
Potentially higher reward
3
44
5
6
7
The risk category is based upon the fund’s risk target and there is no
guarantee that the fund will achieve it.
The fund is in this category because it can take higher risks in search of
higher rewards and its price may rise and fall accordingly.
The fund’s risk category is not guaranteed to remain fixed and may change
over time.
A fund in the lowest category does not mean a risk free investment.
Specific risks
The fund invests in assets which are exposed to currencies other than
sterling. Exchange rates may cause the value of overseas investments and
the revenue from them to rise or fall.
The fund invests in emerging markets and the Far East. This involves a high
degree of risk and should be seen as long term in nature.
More than 35% of the property of the fund may be invested in Government
securities.
The fund may invest in higher yielding bonds (non-investment grade). The
risk of default is higher with non-investment grade bonds than with
investment grade bonds. Higher yielding bonds may also have an increased
potential to erode your capital sum than lower yielding bonds.
The fund may invest in derivatives and in alternative investments which
involves a higher degree of risk and can be more volatile. They should only
be considered as a long term investment.
As a result of the expenses being charged wholly to capital, the distributable
revenue of the fund may be higher, but the capital value of the fund may be
eroded which may affect future performance.
For these reasons, the purchase of units should not normally be regarded as
a short term investment.
Schroder Global Multi-Asset Income Fund
Report & Accounts
This document is a short report for the Schroder Global Multi-Asset Income
Fund for the period ended 20 July 2015. The long form Report & Accounts
for the fund are available on our website www.schroders.co.uk or upon
written request to Schroders, FREEPOST, RLTZ-CHSY-HBUT, PO Box 1102,
Chelmsford, Essex CM99 2XX.
Other Information
The information contained in this report is designed to enable unitholders to
make an informed judgement on the activities of the fund during the period it
covers and the results of those activities at the end of the period. For more
information about the activities and performance of the fund during this
period, please contact the Manager.
The Prospectus, the Key Investor Information Document and details of
investment charges and costs are available on request or can be
downloaded from our website www.schroders.co.uk.
Schroders is required by the European Union Savings Directive to report
payments to HM Revenue and Customs that are made by the fund to
investors living in other European Union member states.
Please remember that past performance is not a guide to future performance and it might not be repeated.
The value of investments and the revenue from them may go down as well as up and investors may not
get back the amount originally invested. Because of this, you are not certain to make a profit on your
investments and you may lose money.
For investors’ security, calls to Schroder Investor Services may be recorded. Manager: Schroder Unit Trusts Limited,
31 Gresham Street, London EC2V 7QA. Authorised and regulated by the Financial Conduct Authority. Trustee: J.P.
Morgan Europe Limited, Chaseside, Bournemouth BH7 7DA. Authorised by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and Prudential Regulation Authority. Independent Auditors:
PricewaterhouseCoopers LLP, Atria One, 144 Morrison Street, Edinburgh EH3 8EX.
For further literature please contact Schroder Investor Services on 0800 718 777 or at
[email protected], or visit our website at www.schroders.co.uk.
Issued in September 2015 by Schroder Unit Trusts Limited, 31 Gresham
Street, London EC2V 7QA. Registered No: 04191730 England. Authorised
and regulated by the Financial Conduct Authority. w35659 MRGMAII15
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