Schroder UK Mid Cap Fund plc - AGM presentation Jean Roche and Andy Brough, Co-Managers
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Schroder UK Mid Cap Fund plc
AGM presentation
Jean Roche and Andy Brough, Co-Managers
February 2021
Marketing material
Our investment process
Well managed, long-term
Positively and profitably vision, capable of generating
responding to disruption cash
Exposed to a growing market
and a strong market position or Offering their stakeholders
potential something different, new or
better
For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Source: Schroders.
1
4
Schroder UK Mid Cap Fund plc 5
Long-term trend of outperformance
Cumulative performance to 31 December 2020
Since
Performance % 6 months 1 year 3 years 5 years 10 years
launch³
Schroder UK Mid Cap Fund plc NAV cum income 27.2 -6.5 7.1 36.8 170.8 960.2
FTSE 250 ex. Investment Trusts index² 22.1 -8.5 1.6 26.2 126.3 594.6
Relative +5.1 +2.0 +5.5 +10.6 +44.5 +365.6
Schroder UK Mid Cap Fund plc share price 47.7 -3.7 26.4 49.2 236.7 1,207.0
Best performing UK equity investment trust in AIC UK All Companies sector
since launch in 20031
Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well
as up and investors may not get back the amounts originally invested.
Source: Morningstar, Schroders, as at 31 December 2019, in GBP, net income reinvested, net of the ongoing charges.
¹Ranking in Association of Investment Companies (AIC) Sector, UK All Companies, as at 31 December 2019, sourced from Morningstar, covering period from close 30 April 2003 to 31 December 2019 (NAV ex
income TR) – only 9 funds currently in the sector have a track record for this period. ²With effect from 1 April 2011, the Company’s benchmark has been the FTSE 250 (ex-Investment Trusts) Index. Prior to that
date the benchmark was the FTSE All Share, ex. Investment Trusts Index, ex. FTSE 100. The 10 year and since launch data has been chain-linked to reflect this. ³Ex income figures shown as cum income
unavailable pre 2008, from launch on 30 April 2003 (close) to 31 December 2020. Source for ratings: ⁴FE Alpha Manager as at 31 August 2020. ⁵Morningstar Sustainability rating as at 30 January 2021.
2Schroder UK Mid Cap Fund plc
Performance attribution – 12 months to 31 December 2020
Stocks held in the fund Stocks not held in the fund
Portfolio Active Relative Portfolio Active Relative
Impact Impact
Top 5 contributors weight weight performance Top 5 contributors weight weight performance
% %
% % % % % %
Pets at Home 2.7 +2.2 61.5 +1.4 Hammerson - -1.1 -83.1 +0.8
Games Workshop 2.9 +1.8 95.8 +1.4 Micro Focus - -0.6 -51.7 +0.7
Computacenter 2.5 +2.0 47.3 +1.0 Babcock - -0.7 -47.1 +0.5
Renishaw 1.9 +1.3 61.3 +0.9 Marks & Spencer - -0.9 -27.7 +0.5
Dunelm 4.2 +3.8 13.5 +0.7 Hiscox - -1.2 -21.7 +0.4
Portfolio Active Relative Portfolio Active Relative
Impact Impact
Top 5 detractors weight weight performance Top 5 detractors weight weight performance
% %
% % % % % %
J Fisher & Sons 1.6 +1.4 -46.7 -1.2 Pennon - -0.4 10.8 -1.1
SSP 0.9 +0.3 -39.8 -0.7 B&M - -1.0 27.6 -0.8
Restaurant Group 0.8 +0.7 -77.1 -0.6 Weir Group - -1.3 40.3 -0.6
Petrofac 0.7 +0.5 -55.5 -0.5 Kingfisher - -0.4 74.1 -0.6
Capita 0.6 +0.3 -67.6 -0.5 Electrocomponents - -1.2 38.5 -0.5
Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well
as up and investors may not get back the amounts originally invested.
Source: Schroders, FactSet. For illustrative purposes only and not a recommendation to buy or sell shares. Portfolio weight and active weight are average weights. Active weight is the average stock weight
relative to the FTSE 250 Ex Investment Trusts. Relative performance is the share price return relative to the FTSE 250 Ex Investment Trusts (TR). Impact is the contribution to performance relative to the FTSE 250
Ex Investment Trusts (TR). Stock examples are for illustrative purposes only and are not a recommendation to buy or sell.
3Schroder UK Mid Cap Fund plc Calendar year performance Performance % 2020 2019 2018 2017 2016 Schroder UK Mid Cap Fund plc NAV cum income -6.5 35.4 -15.4 24.7 2.5 Schroder UK Mid Cap Fund plc share price -3.7 58.7 -17.3 28.6 -8.2 FTSE 250 ex. Investment Trusts index -8.5 30.8 -15.2 18.2 5.1 Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Source: Morningstar, as at 31 December 2020, in GBP, net income reinvested, net of the ongoing charges. Schroder UK Mid Cap Fund plc – risk considerations: The trust invests in smaller companies that may be less liquid than larger companies and price swings may therefore be greater than investment trusts that invest in larger companies. The trust will invest solely in the companies of one country or region. This can carry more risk than investments spread over a number of countries or regions. As a result of the fees and finance costs being charged partially to capital, the distributable income of the trust may be higher but there is the potential that performance or capital value may be eroded. The trust may borrow money to invest in further investments, this is known as gearing. Gearing will increase returns if the value of the investments purchased increase in value by more than the cost of borrowing, or reduce returns if they fail to do so. 4
What did the UK consumer spend their money on in 2019?
Out and about
Increase vs 2018
Sector
Spend, £ £ %
Purchase of vehicles 53.4bn +2.4bn 4.7
Games, Toys & Hobbies 22.8bn +1.6bn 7.4
Camping & sport equipment 4.8bn +1.0bn 23.2
Pet products & services 11.7bn +0.9bn 8.1
Restaurants & hotels 133.8bn +4.4bn 3.4
Clothing & footwear 72.2bn +5.1bn 7.6
Source: ONS and Lazarus economics as at 31 December 2019.
5What did the UK consumer spend their money on in 2020?
Household essentials
Increase vs 2019
Sector
Spend, £ £ %
% Alcoholic beverages 25.1bn 4.1bn 20.0
Spirits 7.3bn 1.2bn 19.5
Wine 10.9bn 1.7bn 18.0
Beer 6.9bn 1.3bn 23.7
Other medical products 1.7bn 0.4bn 36.3
Purchase of bicycles 1.8bn 0.4bn 25.6
Postal services 1.6bn 0.3bn 19.1
Source: ONS and Lazarus economics as at 31 December 2020. First 9 months are actual data, final three months of 2020 are estimates.
6Sustainability in practice – Schroders engages
Part of active management
Schroder UK Equity team ESG engagements – past 3 years
Most significant engagement topics
400
350
300
250
200
150
100
50
0
Remuneration Corporate Strategy Governance oversight Human Capital Climate Change Environmental Other - Environmental
Management Policy/Strategy & Social
Mid Cap
engagement
examples:
Source: Schroders. Most significant engagement topics over 3 years to 30 September 2020. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
7Appendix Schroder UK Mid Cap Fund plc
Schroder UK Mid Cap Fund plc
Discount appears to be sentiment rather than performance driven
Performance (%) Discount/Premium to NAV (%)
6 months 12 months 0
Share price 47.7 -3.7
NAV 27.2 -6.5 -5
cum income
Comparator
FTSE250 Ex 22.1 -8.5
Investment Trusts
-10
The headlines¹
-15
-20
-25
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors
may not get back the amount originally invested.
Source for LHS: Morningstar, as at 31 December 2020. Source for RHS: Schroders, data shown is 21 January 2021 to 21 January 2021. ¹Source: Andy Haldane speech, Avoiding Economic Anxiety, 30 September 2020.
9Discrete performance
Relative half year fund performance
Relative performance1
20%
15%
10%
5%
0%
-5%
-10%
Sep 04
Sep 05
Sep 06
Sep 07
Sep 08
Sep 09
Sep 10
Sep 11
Sep 12
Sep 13
Sep 14
Sep 15
Sep 16
Sep 17
Sep 18
Sep 19
Sep 20
Mar 04
Mar 05
Mar 06
Mar 07
Mar 08
Mar 09
Mar 10
Mar 11
Mar 12
Mar 13
Mar 14
Mar 15
Mar 16
Mar 17
Mar 18
Mar 19
Mar 20
Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well
as up and investors may not get back the amounts originally invested.
Source: Morningstar, Schroders, as at 30 September 2020, NAV cum income in GBP, net income reinvested, net of the ongoing charges. 1Relative to FTSE 250 ex Investment Trusts.
10Schroder UK Mid Cap Fund Plc
Dividends continue to enhance returns
Annual total dividends (pence per share)
20
18
16
14 13.3p
12
10 9.2p
8
6
4
2
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Revenue reserves (£m) Annual total dividends (pence per share)
FY 2020 dividend 13.3p, +7.6% p.a. since 2015
Past performance is not a guide to future performance and may not be repeated.
Source: Schroders. 2004 to 2020, year ends to September.
114
Schroder UK Mid Cap Fund plc 5
Return to long-term trend of outperformance
Cumulative performance to 30 September 2020
Since
Performance % 1 month YTD 1 year 3 years 5 years 10 years
launch³
Schroder UK Mid Cap Fund plc NAV cum income 2.2 -19.4 -7.7 -3.3 24.7 156.9 814.9
FTSE 250 ex. Investment Trusts index² -3.2 -24.1 -15.3 -11.6 9.7 106.9 476.2
Relative +5.4 +4.7 +7.6 +8.3 +15.0 +50.0 +338.7
Schroder UK Mid Cap Fund plc share price -0.3 -31.5 -12.5 -4.4 13.5 161.1 829.1
Best performing UK equity investment trust in AIC UK All Companies sector
since launch in 20031
Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well
as up and investors may not get back the amounts originally invested.
Source: Morningstar, Schroders, as at 30 September 2020, in GBP, net income reinvested, net of the ongoing charges.
¹Ranking in Association of Investment Companies (AIC) Sector, UK All Companies, as at 30 September 2020, sourced from Morningstar, covering period from close 30 April 2003 to 30 September 2020 (NAV ex income TR) – only 9 funds
currently in the sector have a track record for this period. ²With effect from 1 April 2011, the Company’ Augusts benchmark has been the FTSE 250 (ex-Investment Trusts) Index. Prior to that date the benchmark was the FTSE All Share,
ex. Investment Trusts Index, ex. FTSE 100. The 10 year and since launch data has been chain-linked to reflect this. ³Ex income figures shown as cum income unavailable pre 2008, from launch on 30 April 2003 (close) to 30 September
2020. Source for ratings: ⁴FE Alpha Manager as at 31 August 2020. ⁵Morningstar Sustainability rating as at 30 January 2021.
12Schroder UK Mid Cap Fund plc
Performance attribution – 12 months to 30 September 2020
Stocks held in the fund Stocks not held in the fund
Portfolio Active Relative Portfolio Active Relative
Impact Impact
Top 5 contributors weight weight performance Top 5 contributors weight weight performance
% %
% % % % % %
Dunelm 3.9 +3.5 +86.1 +2.4 Micro Focus – -0.8 -63.1 +1.0
Pets at Home 2.4 +1.9 +124.9 +2.1 Tullow Oil – -0.2 -80.2 +0.9
Games Workshop 2.4 +1.6 +135.8 +1.6 Hammerson – -0.4 -75.2 +0.7
Computacenter 2.2 +1.8 +99.2 +1.5 Beazley Plc – -1.0 -34.8 +0.5
Diploma 2.7 +1.9 +49.2 +0.9 Marks & Spencer – -1.0 -30.7 +0.5
Portfolio Active Relative Portfolio Active Relative
Impact Impact
Top 5 detractors weight weight performance Top 5 detractors weight weight performance
% %
% % % % % %
J Fisher & Sons 1.9 +1.6 -29.2 -0.8 Pennon – -0.7 +42.1 -1.1
Petrofac 0.9 +0.7 -56.9 -0.6 B&M European – -1.2 +44.8 -0.7
Restaurant Group 1.0 +0.9 -68.1 -0.6 Centamin – -0.7 +85.1 -0.6
Crest Nicholson 1.0 +0.7 -33.9 -0.6 Plus500 – -0.5 +138.5 -0.5
Capita 1.0 +0.5 -63.6 -0.6 Avast Plc – -0.6 +48.2 -0.5
Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well
as up and investors may not get back the amounts originally invested.
Source: Schroders, FactSet. For illustrative purposes only and not a recommendation to buy or sell shares. Portfolio weight and active weight are average weights. Active weight is the average stock weight
relative to the FTSE 250 Ex Investment Trusts. Relative performance is the share price return relative to the FTSE 250 Ex Investment Trusts (TR). Impact is the contribution to performance relative to the FTSE 250
Ex Investment Trusts (TR). Stock examples are for illustrative purposes only and are not a recommendation to buy or sell.
13Schroder UK Mid Cap Fund plc Top 10 active positions Stock Fund weight Active weight Its business Dunelm 4.0% +3.6% Homewares retailer Diploma 3.6% +2.6% Technical products and services provider Oxford Instruments 3.0% +2.6% Nanotechnology tools and systems provider Computacenter 2.9% +2.3% IT infrastructure services Playtech 2.8% +2.3% Gambling software developer Safestore 2.9% +2.3% Self storage Pets At Home 3.0% +2.3% Pet supplies retailer and veterinary practice Spectris 3.5% +2.3% Productivity instruments and controls Inchcape 3.2% +2.2% Automotive retailer and distributor Telecom Plus 2.4% +2.1% Utility supplier Source: Schroders, FTSE, FactSet as at 30 January 2021. For illustrative purposes only and not a recommendation to buy or sell shares. 14
Important information Marketing Material The views and opinions contained herein are those of Andy Brough and Jean Roche, fund managers, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy. Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data. The material is not intended to provide, and should not be relied on for accounting, legal or tax advice. Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall. Schroder UK Mid Cap Fund plc risk considerations: The trust may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the fund, both up or down, which may adversely impact the performance of the fund. As a result of fees being charged to capital, the distributable income of the fund may be higher but there is the potential that performance or capital value may be eroded. The trust may borrow money to invest in further investments, this is known as gearing. Gearing will increase returns if the value of the investments purchased increase in value by more than the cost of borrowing, or reduce returns if they fail to do so. 15
Important information We recommend you seek financial advice from an Independent Adviser before making an investment decision. If you don't already have an Adviser, you can find one at www.unbiased.co.uk or www.vouchedfor.co.uk Before investing, refer to the latest Key Features Document and Supplementary Information Document (SID) available at www.schroders.co.uk/investor or on request. Schroders will be a data controller in respect of your personal data. For information on how Schroders might process your personal data, please view our Privacy Policy available at www.schroders.com/en/privacy-policy or on request should you not have access to this webpage.” FTSE third party data disclaimer: FTSE International Limited (“FTSE”) © FTSE (2018). FTSE®” is a trade mark of London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited under licence. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent. Issued in February 2021 by Schroder Unit Trusts Limited, 1 London Wall Place, London EC2Y 5AU. Registered No: 4191730 England. Authorised and regulated by the Financial Conduct Authority. Information herein is believed to be reliable but Schroder Unit Trusts Limited (Schroders) does not warrant its completeness or accuracy. EUE000305 16
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