fund
Schroder UK Dynamic Smaller Companies Z
A small-cap fund focused on the bottom 10% of the UK market, utilising a pure bottom-up process.
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671.20p
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.
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728.30p
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?
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0.00%
Initial chargeSome 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!
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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).
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0.92%
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.
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0.30%
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…
The fund targets long term capital growth through investment primarily in the equities of small UK companies. The portfolio is spread widely across the investment universe, defined as the bottom 10% of the UK market by capitalisation, including AiM.
Fund summary
| Sector | UK Smaller Companies |
| Structure | OEIC |
| Launched | July, 1999 |
| Size | £273m |
| Yield | 0.30% |
| Charging basis | Income |
| Dividends paid | Feb, Aug |
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 | 0.92% |
Allocation
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Investment process
The fund is constructed using an entirely bottom-up process; sector positioning is not a focus. The portfolio is spread widely across the investment universe, defined as the bottom 10% of the small-cap market by capitalisation, including AiM. The manager aims to have 75% of the portfolio in core holdings matching his "P3M criteria": Product – a differentiated product, R&D backed and preferably with intellectual property. Market – a market leader, either for the UK in a large niche or globally in a small niche. Margin – profitable, cash generative companies that are growing margins. Management - Marriage looks for management that appreciates shareholders and own their own stock. He likes to meet each portfolio company twice a year, ideally on their own premises. The remaining 25% of the portfolio is invested in value situations, often "poor" companies that the market has mis-priced. Regardless of the company he also requires an "investment angle" - a catalyst such as a restructuring that will cause an uplift in the share price. Ideas are sourced from market knowledge gained at company meetings, the "library" of companies Marriage has met in previous years, fundamental research and from regional brokers. The roles of fund manager and analyst are combined, without the need for large teams of sector specific analysts.
Manager research
Average monthly relative returns
- 17/18 0.55%
- 18/19 -0.07%
- 19/20 -0.91%
- 20/21 0.30%
- 21/22 0.15%
Bestinvest MRI
- 3 years -0.16%
- 5 years 0.00%
- Career 0.09%
- 3 years 39.70%
- 5 years 64.10%
- Career 87.90%
Performance figures are based on the average of monthly percentage returns relative to the benchmark index.
Luke Biermann
Biermann is a portfolio manager on the Schroder European Smaller Companies Fund & UK Dynamic Smaller Companies Fund. He also has analyst research responsibilities across the Pan-European small cap universe. Biermann joined Schroders as a graduate in October 2006 and is a CFA Charterholder. He has completed a BSc (Hons) in Computer Science, University of Bath.
Track record
Luke Biermann has 9.9 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.09%. During the worst period of relative performance (from June 2018 - February 2020) there was a decline of 19% relative to the index. The worst absolute loss has been 32%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 88%.
Periods of worst performance
| Absolute | -32.00% (August 2018 - March 2020) |
| Relative | -19.00% (June 2018 - February 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 30 November 2021
| 4% | Marshall Motor Hldgs Plc |
| 3.03% | Renew Hldgs |
| 2.59% | Alpha Finl Mkts Consulting Plc |
| 2.55% | Treatt |
| 2.54% | Midwich Group Plc |
| 2.21% | Vp Bank Ag |
| 2.19% | Ncc Group |
| 2.12% | Sanderson Design Group Plc |
| 1.88% | Spire Healthcare Group Plc |
| 1.87% | Vitec Group Plc (The) |
| Source: Trustnet |
Sector breakdown
| Industrials | 32.00% |
| Consumer Discretionary | 23.00% |
| Technology | 19.00% |
| Health Care | 5.00% |
| Financials | 5.00% |
| Real Estate | 4.00% |
| Basic Materials | 3.00% |
| Money Market | 3.00% |
| Consumer Staples | 2.00% |
| Telecommunications | 2.00% |
Portfolio
Target of 80 core holdings. Max 5% in one stock. Max Schroder ownership in any company is kept at 30%. No exposure to oil, gas, mining or non UK listed stocks.
Constraints
Position size between 1%-5%.