fund
Schroder US Smaller Companies Z
A small cap North American equity fund with a growth at a reasonable price (GARP) style.
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101.90p
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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102.50p
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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0.20%
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…
The fund targets capital growth from equities listed in the US and Canada. It is run in a similar way to the Schroder US Mid Cap fund but focuses on companies that are smaller in size, typically between US$200m and US$2bn. Manager Jenny Jones takes a bottom-up approach (analysing companies in their own right), blending underpriced growth companies with slower growing, more reliable “steady eddies” and a small number of recovery situations.
Fund summary
| Sector | North American Smaller Cos |
| Structure | UNIT TRUST |
| Launched | February, 2012 |
| Size | £815m |
| Yield | 0.20% |
| Charging basis | Income |
| Dividends paid | 30 Jun |
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 investment universe comprises around 1800 stocks with a market cap between US$200m and US$2bn at the time of purchase, essentially those in the Russell 2000 benchmark but excluding the less liquid names. The portfolio is built primarily on a bottom-up basis by Jones and her team of analysts and includes three types of companies: - Mispriced growth (50-60% of portfolio) – companies where sustainable change is occurring that will lead to higher earnings, revenues, cashflows or margins over 2-3 years. - Steady eddies (20-30%) – companies growing consistently, though generally at lower rates than the mispriced growth stocks. - Turnarounds (0-20%) – companies whose growth engine has broken, but where the manager sees a catalyst for a return to growth. The overall portfolio typically displays a bias to both growth and value factors - a growth at a reasonable price style.
Jenny Jones has over 30 years' experience investing in US companies. Her fund benefits from investing in a variety of stock types, which should enable it to perform throughout a market cycle. Historically it has proven resilient in falling markets, partly due to the “steady eddie” stocks held in the portfolio, though it can underperform strongly rising markets.
Manager research
Average monthly relative returns
- 15/16 0.00%
- 16/17 0.00%
- 17/18 0.00%
- 18/19 0.00%
- 19/20 0.41%
Bestinvest MRI
- 3 years 0.00%
- 5 years 0.00%
- Career 0.14%
- 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.
Robert Kaynor
Robert Kaynor joined Schroders as a senior equity analyst in 2013 and became Research Director in 2014. Kaynor was the Chief Investment Officer and Managing Member at Ballast Capital Group from 2010 to 2013. He was a Managing Director/Portfolio Manager at Ramius Capital Group from 2003 to 2010. Qualifications: CFA Charterholder; BSc in Economics with Financial Applications from Southern Methodist University.
Track record
The track record of Robert Kaynor 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 | -11.00% (July 2019 - February 2020) |
| Relative | -4.00% (January 2020 - 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 31 January 2020
| 2.1485% | Asgn Inc |
| 1.5249% | Entegris Inc |
| 1.4675% | Brunswick Corp |
| 1.4574% | Axis Capital Hldgs |
| 1.4098% | Performance Food Group Co |
| 1.3629% | Valmont Industries Inc |
| 1.3593% | Catalent Inc |
| 1.356% | Brown & Brown Inc |
| 1.3331% | Red Rock Resorts Inc |
| 1.3177% | Western Alliance Bancorp |
| Source: Trustnet |
Sector breakdown
| Financial Services | 25.00% |
| Consumer Discretionary | 18.00% |
| Technology | 14.00% |
| Materials & Processing | 11.00% |
| Producer Durables | 10.00% |
| Health Care | 9.00% |
| Money Market | 4.00% |
| Utilities | 3.00% |
| Consumer Staples | 3.00% |
| Energy | 2.00% |
Portfolio
100 to 150 stocks, weighted according to conviction. Turnover is typically less than 100% p.a. The cash weighting is normally 5-10%.
Constraints
Maximum position size 5%. Sector limits +/- 10% versus the benchmark (Russell 2000).