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Schroder goes for broad brush


Schroder S&P Strategic Balanced Portfolio

Unit trust multi-manager fund of funds

Growth by investing in a portfolio of 12-15 funds

Minimum investment:
Lump sum £1,000

Investment split:
54.7% UK equities, 10.5% Europe ex UK, 10% sterling bonds, 6.6% Japan, 5.3% Asia ex Japan, 3.5% US, 3.3% emerging markets, 6.1% cash

Isa link:

Pep transfers:

Charges: Initial 5.25%, annual 1.5%

Commission: Initial 3%, renewal 0.5%

Tel: 0800 718777

The Schroder S&P strategic balanced fund is the more conservative of the two new unit trust multi-manager fund of funds created by Schroders in conjunction with Standard & Poor&#39s.

Chadney Bulgin partner Bruce Bulgin says: “The Schroders fund will appeal to investors looking for a broad brush approach and for those who do not require hands on fund management. Other attractions are its full Ucits III powers and the small minimum investment at £1,000. The literature is straightforward and well produced.”

Bulgin feels that multi-manger funds need to outperform as the charges are higher, though costs do seem to be reducing a little. He adds: “The fact remains that there is the underlying management charge attaching to the individual fund as well as Schroder&#39s charge. In an era of low inflation and low investment returns, the effect of charges is much more significant than in times when double-digit returns can be expected.”

Bulgin says there is a school of thought which believes that the most important consideration is an investor&#39s overall asset allocation, which takes account of risk, term of investment and investment objective.

He adds: “Providing the correct asset allocation is ascertained, then the individual funds selected are of less importance. For instance, say the work carried out on asset allocation indicated a 30 per cent holding in UK equities, then a tracker fund could be selected as a core holding, which would be much lower cost than a UK multi manager portfolio and would give a return in line with the index in which it was invested.”

In Bulgin&#39s view the charges and fees for the new fund appear to be average, as is the adviser remuneration He feels the major attraction of the fund is a higher degree of skilled active management than might be the case. He says: “The outcome of this should be outperformance. Schroders is also using Standard & Poor&#39s expertise, with its detailed research capability.”

Bulgin concludes: “Taking a longer term view, the wholesale switch by investors to multi-manager funds is likely to result in average performance, so the investor might as well buy a fund that attempts to replicate or track whichever sector the multi manager portfolio is benchmarked against. Who knows, we may see a multi- manager of multi manager fund.”


Suitability to market: Good
Investment Strategy : Good
Charges: Average
Adviser Remuneration: Good

Overall 8/10


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