Schroder International Selection Fund* European Equity Alpha March 2003 For professional investors only Zafar Ahmadullah F...
Fund Summary <ul><ul><li>A new fund in the Schroder International Selection Fund range </li></ul></ul><ul><ul><li>Emphasis...
Philosophy <ul><li>The Fund Manager will aim to invest over a longer time horizon using the best opportunities available <...
Portfolio Characteristics <ul><ul><li>Minimum 40 stocks, no maximum  </li></ul></ul><ul><ul><li>Up to 10% tracking error <...
Investment Process <ul><li>A multi-disciplined and highly structured investment process that draws on our proprietary rese...
Investment Process <ul><ul><li>Primarily fundamental analysis  </li></ul></ul><ul><ul><li>Significant emphasis on stockpic...
What Will We Look for in a Stock? <ul><ul><li>Industry anomalies: undervalued against peer group </li></ul></ul><ul><ul><l...
Stock Example <ul><ul><li>Fast Growing Bank </li></ul></ul><ul><ul><li>High quality management </li></ul></ul><ul><ul><li>...
Stock Example <ul><ul><li>Europe’s largest DIY retailer </li></ul></ul><ul><ul><li>DIY attractive industry with above aver...
Stock Example <ul><li>Belgian holding company with stakes in Total Fina, Suez and Bertelsmann </li></ul><ul><li>Current sh...
Stock Example <ul><li>Greek telco incumbent with exposure to Eastern European markets </li></ul><ul><li>Limited 3G licence...
Stock Example <ul><li>Dominant UK position - 25% of market share </li></ul><ul><li>Focused overseas expansion </li></ul><u...
Zafar’s Track Record in EURO Equity <ul><li>Zafar has managed the fund outright since April 2000 </li></ul>Calendar Year P...
Schroder ISF European Equity Alpha Fund <ul><ul><li>Size: Euro 10 million </li></ul></ul><ul><ul><li>Benchmark: MSCI Europ...
Fund Positioning Health Care Materials Consumer Staples Utilities Information Technology Industrials Telecommunications Fi...
EURO Equity v European Equity Alpha Zafar Ahmadullah EURO Equity  Fund European Equity Alpha Fund Performance Objective Be...
Why Choose This Fund? <ul><ul><li>The Fund Manager will pick the best investment opportunities in the market </li></ul></u...
Appendix Source: Schroders Note: Administration fees include fees payable to the Fund Administrator and Custodian of the F...
Important Information <ul><li>This document does not constitute an offer to anyone, or a solicitation by anyone, to subscr...
Upcoming SlideShare
Loading in …5
×

download Presentation (PowerPoint-Format, MS PowerPoint required)

709 views
629 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
709
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
25
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • Original source = 5435 (Anne Healy)
  • download Presentation (PowerPoint-Format, MS PowerPoint required)

    1. 1. Schroder International Selection Fund* European Equity Alpha March 2003 For professional investors only Zafar Ahmadullah Fund Manager Webcast Presentation *Schroder International Selection Fund will be referred to as Schroder ISF throughout this presentation
    2. 2. Fund Summary <ul><ul><li>A new fund in the Schroder International Selection Fund range </li></ul></ul><ul><ul><li>Emphasis on bottom-up stockpicking using Schroders’ extensive analytical resources and Fund Manager’s proven credentials </li></ul></ul><ul><ul><li>Launched on 31 January 2003* </li></ul></ul>*The fund referred to in this presentation may not be registered for sale in your jurisdiction. Please contact your local Schroders office for more information
    3. 3. Philosophy <ul><li>The Fund Manager will aim to invest over a longer time horizon using the best opportunities available </li></ul><ul><li>How? </li></ul><ul><ul><li>Bottom-up stockpicking approach using Schroders’ extensive research capabilities </li></ul></ul><ul><ul><li>Value & ‘hidden growth’ bias </li></ul></ul><ul><ul><li>Flexibility to adapt to different market conditions </li></ul></ul><ul><ul><li>High tracking error - no benchmark constraints </li></ul></ul>
    4. 4. Portfolio Characteristics <ul><ul><li>Minimum 40 stocks, no maximum </li></ul></ul><ul><ul><li>Up to 10% tracking error </li></ul></ul><ul><ul><li>Stocks/Sector/Country - Max contribution to TE of 10% from an individual position </li></ul></ul><ul><ul><li>Fully invested mandate (10% cash limit) </li></ul></ul><ul><ul><li>Expect high short-term volatility v benchmark </li></ul></ul><ul><ul><li>+5% p.a. outperformance target on a rolling 3 year basis (MSCI Europe index) </li></ul></ul><ul><ul><li>Small/mid-cap bias (c. 50% of portfolio) in short to medium term </li></ul></ul>
    5. 5. Investment Process <ul><li>A multi-disciplined and highly structured investment process that draws on our proprietary research, our state-of-the-art investment tools and the stock-picking expertise of one of our key Fund Managers </li></ul><ul><ul><li>Award-winning Fund Manager, Zafar Ahmadullah </li></ul></ul><ul><ul><li>27 Pan European Analysts and specialist small cap team </li></ul></ul><ul><ul><li>Global Research Information Database (GRiD) </li></ul></ul><ul><ul><li>Portfolio Risk Investment Strategy Manager (PRISM) </li></ul></ul>Source: Schroders as at 30 December 2002 Overview Large Cap Stock Research Small and Mid Cap Stock Research Risk Management Tools Portfolio & Construction Monitoring
    6. 6. Investment Process <ul><ul><li>Primarily fundamental analysis </li></ul></ul><ul><ul><li>Significant emphasis on stockpicking capabilities of Fund Manager and analysts </li></ul></ul><ul><li>Large Cap </li></ul><ul><ul><li>Focus on stocks rated 1 by our analysts rather than 1 and 2 - cherry picking the best prospects </li></ul></ul><ul><ul><li>Significant divergence from Core Model Portfolio (which is index aware) </li></ul></ul><ul><li>Small/Mid cap </li></ul><ul><ul><li>Small/mid cap bias means wide use of research and interaction with European Small Cap team </li></ul></ul><ul><ul><li>Focus on value and ‘hidden growth’ </li></ul></ul>
    7. 7. What Will We Look for in a Stock? <ul><ul><li>Industry anomalies: undervalued against peer group </li></ul></ul><ul><ul><li>‘ Hidden growth’ not spotted by the market </li></ul></ul><ul><ul><li>Potential corporate action </li></ul></ul><ul><ul><li>Unfashionable companies with good business stories </li></ul></ul><ul><ul><li>Turnaround/Recovery stories </li></ul></ul><ul><ul><li>Companies trading at discounts to their realisable assets </li></ul></ul><ul><ul><li>Unrecognised strong business franchises </li></ul></ul>
    8. 8. Stock Example <ul><ul><li>Fast Growing Bank </li></ul></ul><ul><ul><li>High quality management </li></ul></ul><ul><ul><li>Initially not recognised by the market </li></ul></ul><ul><ul><li>Comprises large position in Schroder ISF EURO Equity Fund </li></ul></ul><ul><ul><li>Performed strongly*: </li></ul></ul><ul><ul><li>1 Year +56%, MSCI Europe -32% </li></ul></ul><ul><ul><li>Since Purchase +70%, MSCI Europe -27% </li></ul></ul>Anglo Irish Bank Anglo Irish Bank v MSCI Europe Source: Thomson Financial, Datastream *Figures to 31 December 2002 x10E-2 Purchased for EURO Equity fund
    9. 9. Stock Example <ul><ul><li>Europe’s largest DIY retailer </li></ul></ul><ul><ul><li>DIY attractive industry with above average growth profile </li></ul></ul><ul><ul><li>Castorama synergy benefits to come through </li></ul></ul><ul><ul><li>Faster restructuring with sale of non core assets </li></ul></ul><ul><ul><li>Kingfisher share price weakened by rights issue to purchase Castorama </li></ul></ul>Kingfisher v MSCI Europe Source: Thomson Financial, Datastream Kingfisher x10E-2
    10. 10. Stock Example <ul><li>Belgian holding company with stakes in Total Fina, Suez and Bertelsmann </li></ul><ul><li>Current share price gives no value for the current stake in Bertelsmann </li></ul><ul><li>Bertelsmann largest media company in Europe with €20 bn in sales </li></ul><ul><li>GBL is able to list Bertelsmann from 2005 and therefore crystallise value for its shareholders </li></ul>GBL Source: Thomson Financial Datastream GBL v MSCI Europe x10E-2
    11. 11. Stock Example <ul><li>Greek telco incumbent with exposure to Eastern European markets </li></ul><ul><li>Limited 3G licence cost and potential for operational improvements </li></ul><ul><li>One of the strongest balance sheets and a sustainable dividend yield of at least 6% </li></ul><ul><li>Fallen out of emerging market index and has not yet appeared on European investors’ radar screens </li></ul>OTE Source: Thomson Financial Datastream OTE v MSCI Europe x10E-2
    12. 12. Stock Example <ul><li>Dominant UK position - 25% of market share </li></ul><ul><li>Focused overseas expansion </li></ul><ul><li>11x 2003E earnings, EV/IC 1.3 </li></ul><ul><li>Innovative and highly regarded management </li></ul>Tesco Source: Thomson Financial Datastream Tesco v MSCI Europe x10E-2
    13. 13. Zafar’s Track Record in EURO Equity <ul><li>Zafar has managed the fund outright since April 2000 </li></ul>Calendar Year Performance (EUR%)* Source: Schroders, MSCI to 31December 2002 * ‘C’ Class Shares Please note that the above graphs relate to the Schroder ISF EURO Equity fund It does not imply that Schroder ISF European Equity Alpha will enjoy similar performance or meet its objectives
    14. 14. Schroder ISF European Equity Alpha Fund <ul><ul><li>Size: Euro 10 million </li></ul></ul><ul><ul><li>Benchmark: MSCI Europe index </li></ul></ul><ul><ul><li>Number of stocks: 70 </li></ul></ul><ul><ul><li>Tracking error: 5.0% </li></ul></ul>Objective and Characteristics <ul><li>Performance Objective: </li></ul><ul><ul><li>5% p.a. on a rolling 3 year achieved utilising a tracking error range of up to 10% </li></ul></ul>Fund Characteristics as at 28 February 2003: Source: Schroders
    15. 15. Fund Positioning Health Care Materials Consumer Staples Utilities Information Technology Industrials Telecommunications Financials Consumer Discretionary 9.2 2.9 2.5 1.0 0.1 -1.0 -3.7 -4.9 -5.4 -6.5 5.8 Weight Relative to Index Energy Schroder ISF European Equity Alpha Fund - Sector Allocation Cash
    16. 16. EURO Equity v European Equity Alpha Zafar Ahmadullah EURO Equity Fund European Equity Alpha Fund Performance Objective Benchmark +3% p.a. on Rolling 3 years Benchmark +5% p.a. on Rolling 3 years Tracking Error 3 - 8% Up to 10% Fees Standard Performance Related Benchmark Universe Fund Manager MSCI EMU Eurozone Zafar Ahmadullah MSCI Europe Pan Europe
    17. 17. Why Choose This Fund? <ul><ul><li>The Fund Manager will pick the best investment opportunities in the market </li></ul></ul><ul><ul><li>Not constrained by benchmark weightings </li></ul></ul><ul><ul><li>Pan-European – larger investment universe </li></ul></ul><ul><ul><li>Small/mid cap bias – an under-researched area which gives greater opportunity to add value </li></ul></ul><ul><ul><li>Emphasis on long-term returns – rides through short-term market volatility </li></ul></ul>
    18. 18. Appendix Source: Schroders Note: Administration fees include fees payable to the Fund Administrator and Custodian of the Fund, and to Schroder Investment Management (Luxembourg) SA for its services as Transfer Agent and Administration * Provided the absolute performance is positive Eur Eur Fee Structure Schroder ISF European Equity Alpha Schroder ISF European Equity Alpha Schroder ISF European Equity Alpha Fund Name Share Class A B C Base Currency Eur Initial Charge 5.00% of the Offer price (5.26315% of the NAV/ps) 0.00% 3.00% of the Offer price (3.09278% of the NAV/ps) Management Fee 1.50% 1.50% 1.00% Distributor’s Fee 0.00% 0.60% 0.00% Luxembourg Tax 0.05% 0.05% 0.05% Performance Fees 15% of the outperformance of MSCI Europe* 15% of the outperformance of MSCI Europe* 15% of the outperformance of MSCI Europe*
    19. 19. Important Information <ul><li>This document does not constitute an offer to anyone, or a solicitation by anyone, to subscribe for shares of Schroder International Selection Fund (the “Company”). Nothing in this document should be construed as advice and is therefore not a recommendation to buy or sell shares. </li></ul><ul><li>Subscriptions for shares of the Company can only be made on the basis of its latest prospectus together with the latest audited annual report (and subsequent unaudited semi-annual report, if published), copies of which can be obtained, free of charge, from Schroder Investment Management (Luxembourg) S.A. </li></ul><ul><li>The Company is not managed in order to qualify for UK distributor status. It may not meet the requirements of investors subject to UK taxation. </li></ul><ul><li>An investment in the Company entails risks, which are fully described in the prospectus. </li></ul><ul><li>Past performance is not necessarily a guide to future performance and may not be repeated. Investors may not get back the full amount invested, as prices of shares and the income from them may fall as well as rise. </li></ul><ul><li>Exchange rate changes may cause the value of any overseas investments to rise or fall. </li></ul><ul><li>Schroders has expressed its own views and opinions in this document and these may change. Unless otherwise noted all figures are sourced from Schroders as at 31 December 2002 </li></ul><ul><li>This presentation is issued by Schroder Investment Management (Luxembourg) S.A., 5, rue Höhenhof, L-1736 Senningerberg, Luxembourg. For your security, all telephone calls are recorded. </li></ul>

    ×