Schroder Income L

Targets a growing income from large and mid cap UK equities.

  • 51.57p
    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.

  • 68.00p
    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!

  • 0.68%
    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).

  • 0.83%
    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.

  • 5.10%

    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

The fund targets a growing income by investing predominantly in large and medium sized UK equities; some overseas companies may also be included. The managers focus on stocks trading at a discount to their intrinsic value, typically high yielding stocks, as they believe these tend to outperform in the long term due to market inefficiencies. The fund has a similar portfolio to Schroder Income Maximiser but the yield is lower as it lacks that fund's call writing strategy.

Fund summary

Sector UK Equity Income
Structure UNIT TRUST
Launched October, 2013
Size £1,068m
Yield 5.10%
Charging basis Capital
Dividends paid 25 Apr, 25 Oct


Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.68%
Ongoing charges figure 0.83%


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Investment process

The fund’s investment universe is the FTSE All-Share index, a broad index of UK equities, although the fund may hold up to 20% in overseas equities, with foreign shareholdings typically being hedged back to sterling to mitigate currency risk. The managers focus on stocks which trade at a low valuation compared to the company's assets or profit growth prospects. These shares tend to carry a high yield – the managers believe that high yielding stocks tend to outperform in the long term due to market inefficiencies. The fund’s dividend is managed at the portfolio level and the fund managers do not require each individual holding to satisfy particular income and yield criteria but in aggregate the fund targets a portfolio yield of 110% of the FTSE All-Share yield on a rolling three year basis. To achieve a growing level of income, the managers invest in shares they believe will be able to continue to pay out a high level of income through growing profits. The process starts with a quantitative screen which looks for stocks that have underperformed the FTSE All-Share over three to five years, appear attractively valued and and have operating returns substantially below their peers and also below their own historical values (i.e. companies with the potential to change this). The analysts and managers then research the resulting stocks, evaluating balance sheets and cash flows, earnings power, franchise strength, intrinsic value and downside risk.

Fund manager duo Nick Kirrage and Kevin Murphy have a promising track record and are already rated by Bestinvest for their Schroder Income Maximiser fund. However, Schroder Income lacks that fund's distinguishing feature, its high yield, so we have higher conviction in other UK Equity Income funds at present. The managers also run Schroder Recovery fund the performance of which has been impressive, albeit quite volatile.

Manager research

Average monthly relative returns

  • 16/17 0.84%
  • 17/18 -0.49%
  • 18/19 0.50%
  • 19/20 -0.67%
  • 20/21 -0.09%

Bestinvest MRI

  • 3 years -0.09%
  • 5 years 0.02%
  • Career 0.17%
  • 3 years 48.40%
  • 5 years 61.00%
  • Career 92.80%

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

Kevin Murphy / Nick Kirrage

Murphy graduated with a BA (Hons) in Economics from Manchester University and is a CFA Charterholder. He joined Schroders in 2000, initially working on the UK fund management desk with emphasis on private bank portfolios before becoming a sector analyst in the Pan-European research team from 2003. He is now a specialist global value manager. Kirrage is also a specialist global value manager. He joined Schroders in 2001, spending a year in institutional marketing before joining Schroder research in December 2002 where he was responsible for analysing a number of UK sectors including transport and metals & mining. He has a Degree in Aeronautical Engineering from Bristol University and is a CFA charterholder.

Track record

Kevin Murphy / Nick Kirrage has 14.5 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.17%. During the worst period of relative performance (from January 2014 - May 2020) there was a decline of 27% relative to the index. The worst absolute loss has been 42%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 93%.

Periods of worst performance

Absolute -42.00% (May 2007 - February 2009)
Relative -27.00% (January 2014 - May 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.


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Top 10 holdings

Data accurate as at 31 July 2020

5.24% Anglo American
4.83% Pearson
4.54% Glaxosmithkline
4.29% Imperial Brands Plc
4.2% Morrison(Wm.)Supermarkets
4.19% Bp
4.18% Tesco
3.78% Bhp Group Plc
3.58% Royal Dutch Shell Plc
3.44% Aviva
Source: Trustnet

Sector breakdown

Consumer Services 21.00%
Financials 20.00%
Basic Materials 12.00%
Oil & Gas 11.00%
Health Care 9.00%
Utilities 5.00%
Others 5.00%
Telecommunications 4.00%
Industrials 4.00%
Consumer Goods 4.00%


30-50 stocks. Position sizes typically range from 2-5%. Typical holding period 4-5 years. Overseas positions may be hedged to sterling.


Industry sectors typically +/- 10% of index weights.

Key Investor Information - Income


Key Investor Information - Accumulation