Bestinvest says
New managers took over the management of this fund in December 2009 following the departure of Simon Brazier to Threadneedle. Performance of the had been volatile in the period immediately preceding this with an almost vertical fall relative to the FTSE All Share after the collapse of Lehman Brothers. However, the fund recovered well following this and the new managers have continued this.
The managers seek to identify changes in companies' circumstance as an indication for buy and sell discipline. Individual companies are scrutinised on the basis of cash-flow, balance sheet strength and, in particular, returns on capital invested. The sustainability of these factors over time are used as a measure of long-term growth.
The managers view the market as inefficient in the long-term as it responds primarily to short-term news-flow. The manager believes that these inefficiencies are greatest at individual stock level and therefore tries to hedge sector specific risk through diversification.
The managers have the advantage of Schroders' extensive in-house research in order to help identify stocks that have these characteristics. The manager also draws on Schroders' in house macro-economic research for a top-down perspective. The portfolio aims to achieve a low level of volatility and high diversification by investing across a large number of sectors.