FUND MANAGERS
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Whether your focus is growth, income or a combination,
our deep knowledge of the UK can help you chart the
right course. Talk to your financial adviser or visit
schroders.co.uk/its
Fund manager industry experience: Rosemary Banyard: 36 years, Andrew Brough: 28 years, Sue Noffke: 25 years and Philip Matthews: 16 years. The most up to date
key features can be viewed on the UK Investor website via www.schroders.co.uk/investor. Issued in September 2015 by Schroder Unit Trusts Limited, 31 Gresham Street,
London EC2V 7QA. Registered No: 4191730 England. Authorised and regulated by the Financial Conduct Authority. UK09735
FTSE 350 (72.17%)
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0%
Jan 15
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-250%
Jan 06
Dampier agrees about the
importance of the long-term track
record. This means looking beyond
one or two economic cycles to really
get a true perspective.
Just as you don’t get fired for
buying IBM, as the old saying goes,
behaviour in the fund management
world can be rather herd-like and
it may be difficult to reject the
Source: FE Analytics
Seven steps to heaven
THERE IS NO SUCH THING
AS A PERFECT 10 in fund
management. If you are
right on average more than
50 per cent of the time, you
are considered to be doing a
reasonable job, but there’s a
little more to it than that.
Adrian Lowcock, head of
investing at AXA Wealth, offers
seven criteria to help determine
the ability of a fund manager.
Investing for
your world
FTSE 350 Tobacco (1851.89%)
1750%
Jan 05
As with any investment, investment trusts carry risk. The
value of an investment trust will rise and fall in value, and
you may not get back what you put in. As these trusts
concentrate on only the UK, they can carry more risks
than those trusts that are spread across a number
of regions.
THE LONG
AND WINDING ROAD
2000%
Jan 04
There are three trusts in the Schroders UK range:
Schroder UK Mid Cap Fund plc, investing in
medium-sized companies; Schroder Income Growth
Fund plc, aiming to provide both income and growth,
and Schroder UK Growth Fund plc, which seeks to
capitalise on the growth potential of UK companies.
Like surgeons, they will display
individual flair, but ultimately, the
best managers work by sharing
ideas and honing concepts within
the team.
“There is a fine line between
arrogance and confidence,” Dampier
continued, “and fund managers
need a little of each, but it is the
arrogant ones who blow up as they
don’t believe they can be wrong.”
“The market is always right and if
you can’t accept that, you won’t be
able to operate within it.”
PERFORMANCE OF INDICES SINCE JAN 2000
Jan 03
That’s why you’ll find some of our most senior
investment talent at the helm of our longstanding UK
investment trusts. Our managers bring an average of 26
years’ industry experience to managing the trusts. So if
skilled hands are important on your investment voyage,
make Schroders your first port of call.
Jan 02
For UK investors, home shores can form the bedrock of
an investment portfolio.
consensus, particularly if you are
not quickly proved correct.
Managers tend not to move
about much and the best ones
will generally be supported by the
best investment houses, which
give them the space to express
their ideas. But experience tends to
prevail in the end.
“Like the best heart surgeons,
who will have done hundreds of
operations, the best fund managers
will be the most experienced,” said
Dampier.
Jan 01
Investment trusts from Schroders
While we are often reminded that
past performance is no guarantee of
future returns, performance remains
a key indicator. But in assessing a
manager, Lowcock advises investors
to look beyond the fund to his or her
long-term performance.
A lot is made of so-called “star
managers”, most of whom will be
good managers and well-established,
but again, look beyond such titles
at how consistently they have
performed throughout their career.
“Look at when their best
performance was delivered,” advises
Lowcock. “Some managers have a
couple of good years early in their
career, which you find driving
their track record for a long time
afterwards.”
Jan 00
Expertly
navigating the UK
1) Process – a good manager
must have a clear, robust
process. It’s OK to refine
this over time, but the core
philosophy mustn’t change. It
is important that the manager
sticks to their process in both
good times and bad, as if you
change your philosophy, you
have lost your conviction, and
trustnetdirect.com
this changes the nature of the
fund and where it achieves
outperformance.
2) Capital preservation – no
investor likes to lose money,
but it is essential to preserve
capital in the first instance as
this means there is less of a
mountain to climb to achieve
outperformance.
3) Calculated risk - Often,
inexperienced investors will fall
into the trap of thinking they
need to take on greater risks
to achieve greater rewards.
This isn’t necessarily so.
Good fund managers look for
opportunities where they will
be well-rewarded for the risk
they take – spreading their risk
around.
4) Diversification – this
depends on the philosophy as
some managers have concentrated portfolios for specific
reasons. But diversification is
about spreading the risk and
taking opportunities where they
present themselves.
5) Research – managers
won’t get everything right, but
it’s not for the want of trying.
They spend months looking
at accounts and meeting
management to find things
missed by the general market
or new opportunities.
6) Confidence – while you
need to admit when you are
wrong, a good manager needs
the confidence to stick to their
guns. At times, they need to be
able to stand up and reject the
consensus. They may have to
do that for a long period, during
which time they will be:
a) accused of being arrogant
because they said the
consensus is wrong
b) tagged as contrarian
because they have a different
view to the market
It’s a difficult balance to strike,
as the two qualities seem to be
at odds.
7) Humility – fund managers
need Ѽ