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Product launch of the week: Schroders UK Dynamic Smaller Companies

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20/10/2014
We analyse the Schroders UK Dynamic Smaller Companies fund, which has just opened to new investment.
Product launch of the week: Schroders UK Dynamic Smaller Companies

What’s new?

Paul Marriage’s Schroder UK Dynamic Smaller Companies fund is to reopen to new investment on 20 October. While this isn’t quite a new launch it does allow investors to invest once again with this popular and top-performing fund manager.

They say…

“The fund was hard-closed in January 2014 in order to protect the returns following strong inflows throughout 2013. We now feel there is sufficient available capacity to reopen the strategy,” Schroders said in a statement.

In English?

Marriage has been a popular manager and had attracted a lot of money. For smaller companies’ managers, it can become difficult to buy and sell smaller companies in large quantities. Therefore, Schroders took steps to stem the inflows into the fund. After a sell-off in mid and small cap stocks over the past few months, assets in the fund have fallen, allowing the group to reopen the fund.

Good news?

Marriage is a popular manager. He came from the Cazenove stable, joining Schroders when it took over the group in July 2013. His long-term performance is good. He is solidly first quartile over five years, having delivered a return of 133.2%, compared to 79.7% for the sector. As such, many investors will be pleased they can once again get access to his funds.

Any caveats?

Small caps have had a difficult year after a strong run of performance prompted concerns over high valuations. Marriage has had a very difficult time during this period of weakness. The fund is fourth quartile over one year, meaning he has lost more than his peer group. Schroders has seen some departures of former Cazenove managers, which suggests that it may still be going through a period of adjustment after the merger.

Alternatives might be Aberforth UK Small Companies, R&M UK Equity Smaller Companies or Miton UK Smaller Companies.

Links
www.schroders.co.uk
Dealing: 0800 718 788

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