Schroder Equity Opportunities Fund – WC (SCH0035AU) Report & Performance

What is the Schroder Equity Opportunities Fund – WC fund?

Schroder Equity Opportunities Fund – WC aims to outperform the S&P/ASX 300 Accumulation Index after fees over the medium to long term by investing in a broad range of companies from Australia and New Zealand. The Schroder Equity Opportunities strategy provides exposure to a range of quality stocks, listed in Australia/New Zealand. These companies are characterised by strong returns on capital and a sustainable business franchise offering pricing power and control over business direction. The key differentiating feature of the strategy is that benchmark weightings are not considered during the portfolio construction process while the stock selection methodology has no size constraints, using the full universe of opportunities. Stocks are identified using bottom-up, fundamental analysis undertaken by Schroders’ experienced and stable team of in house analysts, drawing on both local and global research capabilities, with securities selected on the basis of business quality and valuation attraction. With a long term focus on investing it is suitable as a core portfolio holding over a time frame greater than 5 years.

Growth of $1000 Investment Over Time

Performance Report

Peer Comparison Report

Peer Comparison Report

Latest News & Updates For Schroder Equity Opportunities Fund – WC

Schroder Equity Opportunities Fund – WC Fund Commentary June 30, 2022

To outperform the S&P/ASX 300 Accumulation Index after fees over the medium to long term by investing in a broad range of companies from Australia and New Zealand.

The Schroder Equity Opportunities Fund is an unconstrained actively managed portfolio investing in a broad range of companies predominantly from Australia with the objective of specifically seeking out higher quality companies characterised by strong returns on capital with a sustainable competitive advantage. The Fund invests across a broad universe of securities with no benchmark constraints, investing in companies of all sizes, avoiding the pitfalls of capitalisation weighted benchmarks which place undue emphasis on large companies. Stock selection is at the core of the investment process, based on intensive in-house company analysis undertaken by Schroders’ highly experienced Australian investment team.

The Fund may invest in Australian and New Zealand securities including but not limited to equities, hybrid securities, cash and cash equivalents, property trusts, exchange traded funds, futures, options and listed equity market derivatives.

READ HISTORICAL PERFORMANCE COMMENTARIES

Product Snapshot

  • Product Overview
  • Performance Review
  • Peer Comparison
  • Product Details

Product Overview

Fund Name APIR Code
? A Product Code is unique a identifier code issued by a group or governing body, to reference products in a large group. For an example, APIR codes are commonly used for Funds and Ticker codes are commonly used for Securities such as ETFs and Stocks.
Structure
?
Asset Class
? An Asset Class breakdown provides the percentages of core asset classes found within a mutual fund, exchange-traded fund, or another portfolio. Asset classes (in microeconomics and beyond) generally refer to broad categories such as equities, fixed income, and commodities.
Asset Category
? An Asset Category is a grouping of investments that exhibit similar characteristics and are subject to the same laws and regulations. Asset categories (or a sub-asset class) are made up of instruments which often behave similarly to one another in the marketplace, looking down to the Asset Category level is important if looking to build a diversified portfolio.
Peer Benchmark Name
? A Peer Index (benchmark) refers to a peer group of investment managers who have the same investment style or category. It is used to compare the performance of one manager to their peer group, which makes it simpler for investors to choose between the vast number of investment managers.
Broad Market Index
? A Market Index (benchmark) refers to a hypothetical portfolio of investments that represents a segment, asset or category of an investable market. Market Indices are used to benchmark managers performance, to assist their style reliability and ability to provide excess returns.
FUM
? Funds/Assets under management (AUM) is the total market value of the investments that a person or entity manages on behalf of clients. Assets under management definitions and formulas vary by company.
Management Fee
? A management fee is a charge levied by an investment manager for managing an investment fund. The management fee is intended to compensate the managers for their time and expertise for selecting finanical products and managing the portfolio.
Performance Fee
? A performance fee is a payment made to an investment manager for generating positive returns. This is as opposed to a management fee, which is charged without regard to returns. A performance fee can be calculated many ways. Most common is as a percentage of investment profits, often both realized and unrealized. It is largely a feature of the hedge fund industry, where performance fees have made many hedge fund managers among the wealthiest people in the world.
Spread
? A spread can have several meanings in finance. Basically, however, they all refer to the difference between two prices, rates or yields. In one of the most common definitions, the spread is the gap between the bid and the ask prices of a security or asset, like a stock, bond or commodity. This is known as a bid-ask spread.
Schroder Equity Opportunities Fund – WCSCH0035AUManaged FundsDomestic EquityAustralia Large Blend - Core / Style NeutralDomestic Equity - Large Cap Neutral IndexASX Index 200 Index293.34 M0.8%15.40%0.3%

Performance Review

Fund Name Last Month
? Returns after fees in the most recent (last) month).
3 Months Return
? Returns after fees in the most recent 3 months.
1 Year Return
? Trailing 12 month returns.
3 Years Average Return
? Average Annual returns from the last 3 years.
Since Inc. Average Return
? Average (annualised) returns since inception
1 Year Std. Dev. (Annual)
? The standard deviation (or annual volatility) of the last 12 months.
3 Years Std. Dev. (Annual)
? The average standard deviation (or annual volatility) from the last 3 years.
Since Inc. Std. Dev. (Annual)
? The average standard deviation (or annual volatility) since the fund inception.
1 Year Max Drawdown
? The maximum drawdown in the last 12 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
3 Year Max Drawdown
? The maximum drawdown in the last 36 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Since Inc. Max Drawdown
? The maximum drawdown since inception - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Schroder Equity Opportunities Fund – WC3.57%6.29%14.73%8.98%7.12%10.3%11.99%14.7%-3.77%-12.47%-43.29%

Peer Comparison

Fund Name Peer Index Name
? A group of individuals who share similar characteristics and interests are called peer groups. Peer group analysis is an essential part of assessing a price for a particular stock in investment research. The emphasis here is on making a comparison, meaning that the peer group constituents should be more or less identical to the company being examined, especially in terms of their main business and market capitalization areas.
12 Months Excess Return
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
Excess Return Annualised Since Inception
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
12 Months Alpha
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market return over 12 months. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
Alpha Annualised Since Inception
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market annualized since inception. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
12 Months Beta
? Rolling 12Month Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
Beta Annualised Since Inception
? Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
12 Months Tracking Error
? 12Month Tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark over the last 12 months. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
Tracking Error Since Inception
? Since Inception tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark since inception. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
12 Months Correlation
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
Correlation Since Inception
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
Schroder Equity Opportunities Fund – WCDomestic Equity - Large Cap Neutral Index-4.25%0.52%NA%NA%NA%13.24%5.15%0.950.94

Product Details

Fund Name Verifed by SMSF Mates Manager Address Phone Website Email
Schroder Equity Opportunities Fund – WCYes-https://www.schroders.com/en/au/-

Product Due Diligence

What is Schroder Equity Opportunities Fund – WC

Schroder Equity Opportunities Fund – WC is an Managed Funds investment product that is benchmarked against ASX Index 200 Index and sits inside the Domestic Equity - Large Cap Neutral Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Schroder Equity Opportunities Fund – WC has Assets Under Management of 293.34 M with a management fee of 0.8%, a performance fee of 15.40% and a buy/sell spread fee of 0.3%.

How has the investment product performed recently?

The recent investment performance of the investment product shows that the Schroder Equity Opportunities Fund – WC has returned 3.57% in the last month. The previous three years have returned 8.98% annualised and 14.7% each year since inception, which is when the Schroder Equity Opportunities Fund – WC first started.

How is risk measured in this investment product?

There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Schroder Equity Opportunities Fund – WC first started, the Sharpe ratio is NA with an annualised volatility of 14.7%. The maximum drawdown of the investment product in the last 12 months is -3.77% and -43.29% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.

What is the relative performance of the investment product?

Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Schroder Equity Opportunities Fund – WC has a 12-month excess return when compared to the Domestic Equity - Large Cap Neutral Index of -4.25% and 0.52% since inception.

Does the investment product produce Alpha over its Peers?

Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Schroder Equity Opportunities Fund – WC has produced Alpha over the Domestic Equity - Large Cap Neutral Index of NA% in the last 12 months and NA% since inception.

What are similar investment products?

For a full list of investment products in the Domestic Equity - Large Cap Neutral Index category, you can click here for the Peer Investment Report.

What level of diversification will Schroder Equity Opportunities Fund – WC provide?

Schroder Equity Opportunities Fund – WC has a correlation coefficient of 0.94 and a beta of 1 when compared to the Domestic Equity - Large Cap Neutral Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.

How do I compare the investment product with its peers?

For a full quantitative report on Schroder Equity Opportunities Fund – WC and its peer investments, you can click here for the Peer Investment Report.

How do I compare the Schroder Equity Opportunities Fund – WC with the ASX Index 200 Index?

For a full quantitative report on Schroder Equity Opportunities Fund – WC compared to the ASX Index 200 Index, you can click here.

Can I sort and compare the Schroder Equity Opportunities Fund – WC to do my own analysis?

To sort and compare the Schroder Equity Opportunities Fund – WC financial metrics, please refer to the table above.

Has the Schroder Equity Opportunities Fund – WC been independently verified by SMSF Mate?

This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.

How can I invest in Schroder Equity Opportunities Fund – WC?

If you or your self managed super fund would like to invest in the Schroder Equity Opportunities Fund – WC please contact via phone or via email .

How do I get in contact with the Schroder Equity Opportunities Fund – WC?

If you would like to get in contact with the Schroder Equity Opportunities Fund – WC manager, please call .

Comments from SMSF Mates

SMSF Mate does not receive commissions or kickbacks from the Schroder Equity Opportunities Fund – WC. All data and commentary for this fund is provided free of charge for our readers general information.

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Historical Performance Commentary

Performance Commentary - December 31, 2020

The S&P / ASX 300 Accumulation Index rose by 13.8%, while the Schroder Equity Opportunities Fund – Wholesale portfolio rose by 13.9% (Post-fee), outperforming by 0.1% (Post-fee) for the quarter.

Contributors
Virgin Money UK (Overweight) (+83.0%)
Wild oscillations in the share price remain reflective of equity market conditions rather than rapidly changing business fundamentals. As the UK struggles under a COVID-19 impact significantly more severe than many other jurisdictions, we remain troubled by questions over how credit can be kept flowing, interest rates kept at negligible levels and bank shareholders insulated against the spectre of bad debts should efforts to perpetuate asset price gains regardless of fundamentals ever prove unsuccessful. This question, and the leveraged nature of banks continues to temper our enthusiasm for the sector despite apparently attractive valuation metrics versus history. Whilst there is undoubtedly valuation appeal in the business if the book value proves reliable and the litany of abnormal items which management continue to remove from earnings in order to paint a more appealing picture eventually ceases, we acknowledge the attraction in this investment is more in its apparently cheap valuation than in the quality of the business..

Fletcher Building (Overweight) (+52.8%)
Our attraction to the Fletcher Building business has been its potential and highly attractive valuation rather than historic performance. Strong market positions in hardware and building products, particularly in NZ, provide highly sustainable, albeit cyclical revenues. For many years the business has struggled to convert relatively strong NZ housing conditions into improving profitability at the hands of ill-considered offshore expansion and disappointing cost management. We are hopeful renewed management efforts on this front, continuing strong residential housing activity, limited COVID-19 impact and ongoing attractions of NZ as a market (population growth potential, renewable power, competent and stable political landscape) will offer an improving profit picture. In combination with a valuation which would still be fairly appealing should none of this improvement eventuate, we see the odds strongly in investors favour.

Oil Search (Overweight) (+40.5%)
A highly attractive LNG operation with extremely strong cost positioning and reserves have proven no match for collapsing oil/LNG prices and an over-geared balance sheet in 2020. As has been the case in other commodities, the path of energy stocks is likely to remain anchored in the outlook for underlying commodity prices. History suggests energy prices do not always fall and the dearth of investment which low prices have driven, will sow the seeds of higher prices. Having raised capital earlier in 2020 and rectified the excessive gearing issue, the experience for Oil Search investors is likely to be slightly less volatile in future, however, our expectations of improving cashflows as prices recover see the business offering very attractive returns.

South 32 (Overweight) (+21.1%)
The bulk of the value in South 32 lies in high quality, low cost alumina operations and Australian manganese operations. Smaller elements of value across metallurgical coal, aluminium, nickel and South African thermal coal operations (currently in the process of disposal) have perhaps clouded the outlook for what we believe to be an extremely well-managed business. An ungeared balance sheet and attractive valuation metrics position the business well to take advantage of commodity prices we believe are still depressed versus sustainable levels.

Detractors
Afterpay (Underweight) (+47.5%)
Without detracting from the enormous success which the business has delivered in attracting users of its buy now pay later service and the undoubted consumer appeal of foisting costs on retailers rather than consumers, we find the more than $30bn valuation attributed to the business difficult to fathom. As a relatively small revenue business with global potential, a simple story and a customer base which overlaps with the most eager new participants in the equity market frenzy, the ducks have lined up for a stratospheric valuation. Management are obliging with regular and judicious business updates to fuel the adrenaline. Our longer-term concerns remain the already intensifying competitive landscape and the lack of scale economics. Whilst the world remains awash with countless billions seeking to finance technology businesses of any shape and form without regard for profit, we would expect this landscape to depress rather than augment the outlook for future sector profitability

Aurizon (Overweight) (-8.2%)
The hard work navigating the haphazard and often unfathomable approach to regulation in Australia which sees its regulated assets priced to deliver lower returns than many other regulated assets despite at least comparable risk, has created headaches of recent years. As a necessary infrastructure provider to a still essential industry, we have adopted a pragmatic, rather than emotional approach to the business. Even assuming the achievement of aggressive targets in reduction of thermal coal usage (which we wholly embrace), the high quality of the operations which Aurizon services and the logic of prioritising higher quality coal sources as the world finds emission solutions leaves Aurizon’s rail network valuable into the distant future.

ASX (Overweight) (-11.1%)
Software issues which caused a trading outage in November have, perhaps predictably, seen regulators and connected parties raise concerns over the operation of ASX while expressing no such concern over their own (the regulator’s prerogative). Years of relatively flawless operation combined with trading and market plumbing which operate at least as effectively as global counterparts are generally lost in the emotional reaction of participants who endured the trauma of being unable to trade shares for a day or so. They should perhaps speak to a few tourism or hospitality based small businesses for some perspective on what constitutes a real problem. We continue to believe ASX is a well-run business currently rectifying periods of technology underinvestment in years past. This unfortunately takes time and sometimes encounters issues. While we harbour some concerns over the longer-term impact of perversion of fixed income markets from intervention and the unfathomable desire in political circles to continue driving consolidation rather than fragmentation of equity ownership and capital provision, we expect the ASX franchise will endure.

CBA (Underweight) (+29.1%)
Major banks in Australia have far greater similarities than differences; balance sheets which predominantly send deposits and wholesale funding out the other side as housing loans to support the Australian love affair with overpriced property and far lower proportions as business and personal lending. Long history and benign operating conditions have seen the costs of performing this function grow incessantly. While CBA performs these operations at least as well as other major banks and with good technology, the eroding value of a large deposit base in a zero interest rate environment and intense competition for the remaining creditworthy borrowers, make it difficult to sustain its profit and return on equity advantage over peers. Valuation continues to reflect a large and sustainable advantage over peers.

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