Schroder Global Cities Real Estate Z

A portfolio of global REITs and listed property securities seeking to maximise total returns.

  • 81.03p
    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.

  • 95.63p
    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).

  • 1.14%
    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.

  • 1.20%
    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 20 January 2021, fund data last updated 06 February 2013

The objective of this fund is to maximise total returns by investing globally in real estate investment trusts (REITs), equity and debt securities of other types of property companies. It has no formal yield target. The fund may take relative positions away from its benchmark, the FTSE EPRA/NAREIT Developed Real Estate Index, but the portfolio will always have a high weight to US REITs which is a well established and dominant market.

Fund summary

Sector Property Other
Structure UNIT TRUST
Launched April, 2007
Size £1,012m
Yield 1.20%
Charging basis Income
Dividends paid 20 Nov

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 1.14%

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Investment process

Since July 2014 the incoming managers have brought in a new-to-Schroders investment process called "GRID", which they used at AMP. This is a stock model database which records individual company "scores" (estimates of future risk and return) as input by Schroders' regionally based property analysts. The model covers 370 stocks (the constituents of their benchmark index with some off benchmark names). The 2 stage scoring process covers individual company risk (including managerial experience and balance sheet strength) and its valuation on the local stock market (where metrics include: net asset value, discounted cash flow, price/book and dividend yield), from which they calculate a target price. Each stock's total score is a summation across all the factors in the GRID. A target weight of each stock within the portfolio is built around +/- 4% from its weight in the benchmark index, which is flexed by relation to its overall score. Finally they rank stocks by upside to their target price within each peer group and only pick those in the top decile of each group.

From July 2014 Schroders have brought the management of this in-house and have hired in Tom Walker and Hugh Machin from AMP. The investment process combines company level analysis with macro views on local property market drivers. Funds like this have the advantage of easily switching allocation between countries and sectors. Despite the lack of dividend yield on this fund investors can take comfort in the global exposure. Since this invests in property shares its short term performance will have some correlation with equity markets.

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

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Top 10 holdings

Data accurate as at 31 July 2020

4.56% Prologis Inc
3.66% Alexandria Real Estate Equities Inc
3.24% Terreno Realty Corp
3.13% Deutsche Wohnen Se
3.06% Udr Inc
2.96% Camden Property Trust Sbi Usd0.01
2.86% Equity Lifestyle Properties Inc
2.74% Rexford Industrial Realty Inc
2.7% Healthpeak Properties Inc
2.62% Vici Pptys Inc
Source: Trustnet

Sector breakdown

Real Estate 87.00%
Industrials 5.00%
Information Technology 5.00%
Money Market 2.00%
Communications 1.00%

Portfolio

As at 31/01/14: 58 stocks, fund size £780m; North America 48%; Pacific ex Japan 19%; Japan 13%; Europe ex UK 8%; UK 7%.

Constraints

The portfolio will typically hold between 45-70 holdings with a turnover at roughly 40% pa. Maximum 25% in emerging markets, no more than 5% in a single country. Max 10% cash. Regions: max index +/- 15% for the major regions of US, Asia and Europe. Stocks: max index+4% but no minimum.

Key Investor Information - Income

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Key Investor Information - Accumulation

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