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Schroders to tighten access as US mid cap hits $4.5 billion

Schroders is to begin restricting fund flows into its US medium-sized companies strategy over the course of the next year as it begins to hit capacity, says Robin Stoakley, the managing director of UK intermediary.

The mid cap team, headed by Jenny Jones, runs assets of $4 billion (£2.5 billion) in its onshore Schroder US mid cap fund and the offshore ISF US small and mid cap equity fund.

As part of its rationale to preserve the fund’s ability to deliver future performance, capacity in the strategy is understood to be at about $4.5 billion. When this level is achieved, Schroders will soft close the two funds to new investment by by scaling back promotional activity.

Instead investors who want access to Jones’ strategy will be redirected to the group’s ISF US all cap equity fund, which was launched in 2006 under the title US large cap alpha fund.

Schroders says one-third of the assets in the all-cap strategy are managed using the same approach in the two funds managed by Jones.

Morningstar says the £636m onshore US mid cap fund has returned 42.4 per cent over five years to November 22, 2010, ranking it second out of 61 funds in the Investment Management Association North America sector.

For most of the five years Jones has held an overweight position in technology companies as she has found a number of mis-priced opportunities.

“However, this overweight position has been coming down as these opportunities are no longer as prevalent as they were five to six years ago, as the market has been pricing them in more,” Jones says.


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