September 2016 | For professional investors or advisers only. *Schroder International Selection Fund is referred to as Schroder ISF throughout the presentation Schroder ISF* European Equity Absolute Return October 2016 James Freeman | Product Manager
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Schroder ISF* European Equity Absolute Return...Fund Manager Steve Cordell – Fund Manager Moved across to Schroders as part of the takeover of Cazenove Capital in July 2013 Originally
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September 2016 | For professional investors or advisers only. *Schroder International Selection Fund is referred to as Schroder ISF throughout the presentation
Schroder ISF*
European Equity
Absolute Return
October 2016
James Freeman | Product Manager
Fund Manager
Steve Cordell – Fund Manager
Moved across to Schroders as part of the takeover of Cazenove Capital
in July 2013
Originally joined Cazenove Capital in 2002
A senior member of the Pan-European equity team and manager of the
Schroder European Opportunities Fund, Schroder ISF European Equity
Absolute Return, Schroder ISF European Opportunities, Schroder ISF
European Equity (ex. UK) and Schroder European Absolute
Target fund
Previously at HSBC Asset Management (Europe) Ltd where he was
responsible for several retail and institutional Pan-European portfolios
Has 22 years of investment experience, including over 12 years
managing absolute return funds
1
Source: Schroders
19/10/2016 17:54:28
UK and European Equities Well resourced team of over 50 professionals
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Source: Schroders, as at 30 September 2016 1 Includes two Global Analysts with full global sector coverage that make a significant contribution to UK and European equity portfolios
Head of UK and European Equities
Rory Bateman
Specialist / Quality
12 Pan European Sector Analysts1
Business Cycle Blend
Global Head of Equities
Nicky Richards
Value Small & Mid Cap Dynamic Small
5
Fund Managers /
Analysts
8
Fund Managers /
Analysts
9
Fund Managers /
Analysts
6
Fund Managers /
Analysts
6
Fund Managers /
Analysts
3
Fund Managers /
Analysts
8 Pan European Equity Product Team, 6 Equity traders, 5 Fund Management Assistants
Business cycle team
3
Source: Schroders, as at 31 July 2016
Pan European team with shared research responsibilities
Matt Hudson
Head of Pan-European Business Cycle
Investment team and product responsibilities
Matt Hudson Michael Zorko (UK Equity & Income)
Steve Cordell Nitin Bhalotia (Pan Europe)
Lionel Rayon Thibault Levacher (Pan Europe, High Alpha)
Source: Schroders, Datastream and HFRI. As at 31 August 2016. Schroder ISF European Equity Absolute Return was launched in February 2014 to accommodate a transfer of
shareholders from the Cazenove fund to the Schroder ISF SICAV. Prior to 11 February 2014 the fund uses the track record of Cazenove European Equity Absolute Return Fund
(launched on 30/10/2003) as a performance track record.
Targeting positive
returns, net of fees,
independent of market
conditions
A portfolio diversifier
Low market correlation
Broadly market neutral
Daily priced UCITS
SICAV structure
Why consider alternatives? Rolling 12 month volatility vs FTSE World Europe Index since strategy launch
Source: Schroders, August 2016. Returns for the C Share class, base currency, net of fees, NAV to NAV.
Europe Cyclicals rel to Defensives (%6mom) IFO (%6mom, rhs)
Portfolio construction
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Pan-European Equity
strategy meeting
Portfolio
Position sizing
Stock selection process
7 style tilts
Strength of view
Potential returns
Stock volatility
Quantitative screening
Qualitative screening
Stock opportunities analysed more in depth
Where are we?
Where are we going?
Tilts weighting to reflect our business
cycle view
Avoid permanent style/size bias
Diversified portfolio
Beta changes through cycle
Emphasis
50%
50%
Source: Schroders
EPS momentum
Price momentum
Valuation
Leverage
Analyst revisions
Databases: Bloomberg, Reuters, Datastream,
FactSet, Mirabaud Securities
Qualitative and quantitative screening of the
stock universe is undertaken in order to detect
potential opportunities
Looking for turning points in relative revisions Quantitative analysis
Stock selection process
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Source: Mirabaud Securities, Schroders, as at September 2016
19/10/2016 17:54:28
AP Moeller - Maersk
Three types of trades 1. Business cycle
Source: Schroders, JP Morgan, as at September 2016
Business cycle factors
Long: A cyclical
Short: A defensive
Business cycle trades
50 – 90%
Trade
range
Example:
IFO business cycle indicator
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Three types of trades 2. Relative value
Source: Schroders, Bloomberg, 9 September 2016. This is for illustrative purposes only.
Security analysis
Long: Boliden
Short: Antofagasta
Relative value trades
0 – 10%
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Three types of trades 3. Directional – earnings revisions
Source: Schroders, Bloomberg, September 2016. This is for illustrative purposes only.
Security analysis
Long: Micro Focus International
Short: Ingenico
Directional trades
20 – 50%
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Performance and
positioning
Schroder ISF European Equity Absolute Return
Source: Schroders, as at 31 August 2016. Returns from 2003 to 11 February 2014, quoted are for Cazenove European Equity Absolute Return Fund C Class, net of fees. Returns
from 11 February 2014 onwards, are for Schroder ISF European Equity Absolute Return C Class, base currency, net of fees, NAV to NAV. *FTSE World Europe TR Index
Fund Jan Feb Mar April May June July Aug Sep Oct Nov Dec Annual Index*
Source: Schroders. *Performance fee 20% p.a. with high water mark. No re-basing, hurdle rate is 3month EUR LIBOR.
Current share class Sedol ISIN Minimum investment Management fee’s
C EUR Class BJ2SHJ2 LU0995125803 €500,000 0.75% & 20% performance fee*
C USD Hedged Class BJ2SJ29 LU0995125712
$500,000
0.75% & 20% performance fee*
C GBP Hedged Class BJ2SHV4 LU0995125639 £500,000 0.75% & 20% performance fee*
A EUR Class BLLJ1N2 LU1046235062 €1,000 1.5% & 20% performance fee*
A USD Class BMH45D6 LU1065104405 $1,000 1.5% & 20% performance fee*
B EUR Class BLLJ1P4 LU1046235146 €1,000 1.5% & 20% performance fee*
B USD Class BMJJVG4 LU1067369956 $1,000 1.5% & 20% performance fee*
Investment Manager – Schroder Investment Management (Luxembourg) SA
Administrator – Schroder Investment Management (Luxembourg) SA for Transfer Agent, JP Morgan Bank (Luxembourg) SA for
Fund Accounting
Auditors – PwC
Legal Advisors – Elvinger, Hoss & Prussen
Listed on Lux stock exchange, with daily valuations.
Share classes available
Why consider alternatives? Conclusion
Returns competitive with equities
Volatility less than half the equity market
Proven ability to protect capital in big market falls
Process designed to be flexible enough to cope with varying business
cycles
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Source: Schroders
19/10/2016 17:54:33
For professional advisers only. This material is not suitable for retail clients.
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