Schroder Global Cities Real Estate Income Z

Invests in property related equities worldwide with a 7% target yield

  • 48.27p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 82.81p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.75%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.98%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 4.40%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 22 January 2021, fund data last updated 04 February 2014

This fund targets a 7% annual yield together with capital growth through investment worldwide in listed property equities and REITs (real estate investment trusts). The fund will have some commonality with Schroder Global Property Securities, run by the same manager, but aims to pay higher dividends. To do this, it focuses on higher yielding stocks as well as selling call options – a type of derivative – on the shares in the portfolio to raise income.

Fund summary

Sector Property Other
Structure UNIT TRUST
Launched February, 2011
Size £57m
Yield 4.40%
Charging basis Capital
Dividends paid 31 Mar, 30 Jun, 30 Sep, 31 Dec

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.75%
Ongoing charges figure 0.98%

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Investment process

The universe of investments includes listed property companies worldwide. Security selection begins with the application of a screen to identify the investable universe, stocks with a market capitalisation under £200m are disregarded, followed by more detailed proprietary research to identify best ideas. Although the investment process focuses primarily on analysis at the company level, macro inputs also play a part in terms of relative valuation and local property market drivers. Dividend income is boosted through employing an option writing strategy, which generates 'premiums'. Therefore portfolio holdings will also be governed by the availability of liquidity in the option market for a given security. The fund will subsequently receive premiums for writing 3-month call options on the underlying securities; these premiums will be distributed to investors as additional income. The level of premium income is not guaranteed and will vary according to market conditions. In the event of a fall in dividends or option premium the fund may give away additional participation in any capital upside to maintain income levels.

The fund provides an unusually high yield for a fund investing in property shares. To achieve this, it employs the option writing strategy used successfully on Schroder Income Maximiser - essentially investors sacrifice some potential capital upside to boost the yield. The strategy works best in flat or gently rising markets, and is likely to underperform strongly rising markets. This is an interesting diversifier for income portfolios.

Manager research

Average monthly relative returns

  • 16/17 0.00%
  • 17/18 0.00%
  • 18/19 0.00%
  • 19/20 0.35%
  • 20/21 -0.25%

Bestinvest MRI

  • 3 years 0.00%
  • 5 years 0.00%
  • Career -0.04%
  • 3 years 0.00%
  • 5 years 0.00%
  • Career 0.00%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Tom Walker / Hugo Machin

Walker joined Schroders in July 2014 as fund manager on Global Property Securities. He has over 15 years of real estate experience since 1999. He has been deputy Head of Global Listed Real Estate at AMP Capital from 2005-14. Before this Walker was at Jones Lang LaSalle 1999–2005. Walker has a BA in Politics from University of Newcastle Upon Tyne and a Graduate Diploma in Real Estate from London South Bank University. Machin Joined Schroders in July 2014 as fund manager on Global Property Securities. He has 15 years of real estate experience since 1999. Machin was Head of European Listed Real Estate at AMP Capital from 2006-14 where he was responsible for setting up the London office for the AMP Global Property Securities Fund. Before this Machin was an analyst at ING Investment Management, Sydney and Assistant Fund Manager at Welcome Trust with responsibility for a commercial property portfolio. Machin has a BA (Hons) in English Literature from Durham University; MSc in Real Estate Finance and Investment from Reading University and a Diploma in Cross Border Valuation from Oxford Said Business School.

Track record

The track record of Tom Walker / Hugo Machin in managing mutual funds in this sector is still too short for us to draw any meaningful conclusions and so our assessment is based largely on qualitative aspects.

Periods of worst performance

Absolute -26.00% (September 2019 - March 2020)
Relative -7.00% (November 2019 - April 2020)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Top 10 holdings

Data accurate as at 31 July 2020

3.1946% Mgm Growth Properties Llc Reits Npv
3.1881% Gaming & Leisure Properties Inc
2.7928% Keppel Infrastructure Trust Uts
2.7509% Charter Hall Group
2.662% Sun Hung Kai Properties Ltd
2.5321% Stag Industrial Inc
2.5131% Befimmo Sca
2.4886% Ascendas India Trust Npv
2.4547% Cromwell Ereit Management Pte Ltd
2.379% Medical Properties Trust Inc Usd0.001
Source: Trustnet

Sector breakdown

Real Estate 85.00%
Financials 6.00%
Others 5.00%
Utilities 3.00%
Money Market 2.00%

Portfolio

60-80 stocks.

Constraints

Maximum of index +4% in any individual stock. Regional weights index +/- 15%. Maximum 5% cash, maximum 25% in emerging markets (10% at most in any individual emerging market).

Key Investor Information - Income

Download

Key Investor Information - Accumulation

Download