For adventurous investors, Schroders has launched a Luxembourg-domiciled global recovery fund.
The new product, the Schroder ISF Global Recovery fund, will invest in companies worldwide that have suffered a severe setback, either in share price or profitability, but where long-term prospects are deemed to be good.
It will be managed by Nick Kirrage and Kevin Murphy, who have co-managed the Schroder Recovery fund since July 2006, and Andrew Lyddon.
The fund will look to match the investment philosophy of the Schroder Recovery fund by applying the same investment style to global markets. Over the past year, the existing primarily UK-focused fund – which was launched in 1970 and has £429m in assets under management – has returned £1,469 on an initial investment of £1,000.
According to Robin Stoakley, the managing director of UK intermediary at Schroders, the fund has been set up in response to strong demand from clients for high alpha global equity products. It is also looking to benefit from the team’s skills as recovery investors. The team has already been investing in overseas equities for five years within the recovery fund and will extend this knowledge to the global offering,
The fund has a minimum investment of $1,000 or currency equivalent, and an annual management fee of 1.5 per cent.
It is tempting to draw away from companies that have had big disturbances in their profits or share prices, just as it is tempting to throw your weight behind companies that are doing well. For investors willing to subvert that logic, the Schroder ISF Global Recovery fund could be the answer.
Many companies suffer severe setbacks for reasons that would make investment inadvisable. It relies, then, on the expertise and experience of the fund managers at Schroders to know which companies fall into this category, and which have the potential to bounce back.
Taking a global view means there is a wide range of companies from which the fund managers can choose, and the team’s positive UK-based track record provides a good springboard. This type of fund is not for everybody, but if the managers can do as good a job globally, investors could be looking at some attractive returns.