Schroder
Global Multi-Asset
Income Fund
Final Short Report
19 December 2014 to 20 January 2016
Schroder Global Multi-Asset
Income Fund
Review of Investment Activities
From 19 December 2014 to 20 January 2016, the price of
Z Accumulation units on a dealing price to dealing price basis
fell 9.58%.
The underperformance was principally driven by the fund’s higher
exposure to income assets, which corrected heavily as investors
prepared for the Federal Reserve to begin hiking rates, as growth slowed
and as energy prices collapsed. As well as the underperformance of the
income style, asset allocation decisions also detracted over the period.
Asset allocation decisions were mixed over the period but detracted
value in aggregate, with decisions in the second quarter being largely
responsible for this. We entered into the second quarter of 2015 with a
positive view on European equities due to policy support from the
European Central Bank (ECB) and improving economic and earnings
growth. We also held a positive view on long duration European bonds
early in the second quarter due to expectations that inflation would
remain subdued and ECB bond buying would outpace supply, keeping
bond yields lower for longer. The former detracted as European equities
declined on concerns that Greece would exit the eurozone, while the
latter detracted as an increase in eurozone inflation and concerns around
lack of ECB support led to a sharp rise in government bond yields.
Overall duration management detracted over the period.
We are keeping overall portfolio risk at a low level and are maintaining
exposure to asset classes with valuation support, until we gain clarity
that growth will be able to strengthen enough to counter the ongoing
withdrawal of US dollar liquidity from the global economy.
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
two months later.
For the period
to 20.1.16
Ongoing charges figure
Z Income units
1.02%1
Z Accumulation units
1.02%1
1 The Ongoing charges figure is annualised based on the fees incurred during the accounting period.
Performance Record
Net Asset
Value as at
20.1.16
pence per unit
Fund performance
Z Income units
42.82
Z Accumulation units
44.57
Schroder Global Multi-Asset
Income Fund
3 months
Since launch
4.82%
(9.58)%
Fund Source: Z Accumulation units on a dealing price to dealing price basis to 20.1.16.
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.
Schroder Global Multi-Asset Income Fund
Comparative Tables
Z Income units
Financial period to 20 January
2016
p per unit
Change in net asset value
Opening net asset value
50.00
Return before operating charges
(4.26)
Operating charges
(0.53)
Return after operating charges*
(4.79)
Distributions1
(2.39)
Closing net asset value
42.82
* after direct transaction costs of
(0.07)
Performance
Return after charges (%)
(9.58)
Other information
Closing net asset value (£000’s)
Closing number of units
18,128
42,338,922
Operating charges (%)
1.11
Direct transaction costs (%)**
0.14
Prices
Highest dealing price (p)
51.24
Lowest dealing price (p)
43.37
The unit class was launched on 19 December 2014.
Schroder Global Multi-Asset Income Fund
Comparative Tables (continued)
Z Accumulation units
Financial period to 20 January
2016
p per unit
Change in net asset value
Opening net asset value
50.00
Return before operating charges
(4.89)
Operating charges
(0.54)
Return after operating charges*
(5.43)
Closing net asset value
44.57
Retained distributions1
2.43
* after direct transaction costs of
(0.07)
Performance
Return after charges (%)
(10.86)
Other information
Closing net asset value (£000’s)
Closing number of units
632
1,418,141
Operating charges (%)
1.11
Direct transaction costs (%)**
0.14
Prices
Highest dealing price (p)
51.66
Lowest dealing price (p)
45.00
The unit class was launched on 19 December 2014.
1 These figures have been rounded to 2 decimal places.
** Direct transaction costs have been stated after deducting the proportion of the amounts collected from dilution
adjustments.
The Operating charges are calculated on an ex-post basis and as such may differ from the Ongoing charges figure
where the Ongoing charges figure has been annualised for a unit class that has not been in existence for a full year.
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.
Schroder Global Multi-Asset Income Fund
Portfolio Information
Spread of
investments
% of net
assets
as at
20.1.16
Real Estate Funds
0.35
Australia
0.78
Brazil
0.35
Canada
1.23
Cayman Islands
0.09
China
1.97
Curacao
0.30
Denmark
0.06
Finland
0.19
France
0.61
Germany
1.43
Hong Kong
0.05
Ireland
0.04
% of net
assets
as at
20.1.16
Canadian Dollar Denominated
Derivatives
0.10
Czech Koruna Denominated
Derivatives
0.03
Colombian Peso Denominated
Medium Term Bonds
0.18
Colombian Peso Denominated
Derivatives
(0.04)
Euro Denominated Short
Term Bonds
0.41
Euro Denominated Medium
Term Bonds
5.18
Euro Denominated Long
Term Bonds
1.17
Euro Denominated Derivatives
(0.86)
Hong Kong Dollar Denominated
Derivatives
(0.14)
Hungarian Forint Denominated
Short Term Bonds
0.12
Hungarian Forint Denominated
Medium Term Bonds
0.07
Indonesian Rupiah Denominated
Medium Term Bonds
0.20
Indonesian Rupiah Denominated
Long Term Bonds
0.10
Japanese Yen Denominated
Derivatives
0.06
Malaysian Ringgit Short
Term Bonds
0.01
Malaysian Ringgit Medium
Term Bonds
0.10
Malaysian Ringgit Long
Term Bonds
0.05
Mexican Peso Denominated
Short Term Bonds
0.04
11.29
Australian Dollar Denominated
Derivatives
Mexican Peso Denominated
Medium Term Bonds
0.26
0.01
Brazilian Real Denominated
Short Term Bonds
Mexican Peso Denominated
Derivatives
(0.11)
0.14
Brazilian Real Denominated
Medium Term Bonds
Norwegian Krone Denominated
Derivatives
(0.04)
0.06
Italy
0.26
Japan
0.96
Jersey
0.46
Malaysia
0.05
Netherlands
0.74
Norway
0.37
Poland
0.09
Portugal
0.12
Singapore
0.28
South Africa
0.75
South Korea
0.05
Spain
0.19
Sweden
0.54
Switzerland
2.08
Thailand
0.25
Taiwan
1.53
Turkey
0.05
United Kingdom
United States
2.93
Schroder Global Multi-Asset Income Fund
Portfolio Information (continued)
Spread of
investments
% of net
assets
as at
20.1.16
Polish Zloty Denominated
Short Term Bonds
Polish Zloty Denominated
Medium Term Bonds
% of net
assets
as at
20.1.16
0.23
Sterling Denominated Medium
Term Bonds
0.09
Sterling Denominated Long
Term Bonds
2.67
Sterling Denominated Derivatives
0.20
4.52
Polish Zloty Denominated
Derivatives
(0.03)
Peruvian Nuevo Sol Medium
Term Bonds
Swedish Krona Denominated
Derivatives
(0.04)
0.03
Peruvian Nuevo Sol Long
Term Bonds
Swiss Franc Denominated
Derivatives
(0.15)
0.04
Romanian New Leu Short
Term Bonds
Thai Bhat Denominated
Medium Term Bonds
0.22
0.05
Romanian New Leu Medium
Term Bonds
Turkish Lira Denominated
Short Term Bonds
0.20
0.05
Russian Ruble Denominated
Medium Term Bonds
Turkish Lira Denominated
Medium Term Bonds
0.07
0.10
Russian Ruble Denominated
Derivatives
US Dollar Denominated Short
Term Bonds
3.32
(0.09)
Singapore Dollar Denominated
Derivatives
US Dollar Denominated
Medium Term Bonds
19.80
(0.03)
South African Rand Denominated
Long Term Bonds
US Dollar Denominated Long
Term Bonds
16.35
0.08
Sterling Denominated Short
Term Bonds
US Dollar Denominated
Derivatives
(4.29)
6.00
Net other assets
13.07
Major Holdings
% of net
assets
as at
20.1.16
Treasury Bill 0% 2016
4.79
Germany 1% Bonds 2025
2.29
Treasury 2% Bonds 2025
1.60
Friends Life Holdings 8.25%
Notes 2022
0.96
Old Mutual 8% Notes 2021
0.82
Exxon Mobil
0.80
Merck
0.78
Nestle
0.78
Ardagh Finance Holdings
8.625% Notes 2019
0.76
Koninklijke KPN 7% Bonds 2073
0.76
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 less developed markets which are generally less well
regulated than the UK. They may be less liquid and may have less reliable
custody arrangements.
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.
The fund is index unconstrained and has the potential for greater volatility.
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 (including
commodities and real estate) 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.
Schroder Global Multi-Asset Income Fund
Risk Profile (continued)
The target yield quoted is an estimate and is not guaranteed. It is quoted net
of basic rate tax, however, higher rate tax payers should note that they may
be liable for further deductions.
For these reasons, the purchase of units should not normally be regarded as
a short term investment.
Report & Accounts
This document is a short report for the Schroder Global Multi-Asset Income
Fund for the period ended 20 January 2016. 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. Investment
Adviser: Schroder Investment Management 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
investorservices@schroders.com, or visit our website at www.schroders.co.uk.
Issued in March 2016 by Schroder Unit Trusts Limited, 31 Gresham Street,
London EC2V 7QA. Registered No: 04191730 England. Authorised
and regulated by the Financial Conduct Authority. w35659 MRGMAIF16