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ii Super 60 - Schroder Income

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ii Super 60 investments:
Schroder Income

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under review This Super 60 fund is currently under formal review. Find out more

Asset Group Asset Sub-Group Investment Category
Equities UK equity income Adventurous

Selection rationale:
Managed by Kevin Murphy and Nick Kirrage, this fund operates under a rigorous deep-value investment approach.

Murphy and Kirrage’s investment process starts with several valuation screens. They aim to identify companies that are trading at significant discounts to their perceived fair values and take a three to five-year view on the stocks they are buying. The key difference here is the greater focus on dividends. They are ideally looking for stocks with a high dividend yield and income growth. Unlike many peers, they are willing to invest in companies that have cut their dividends if they believe it reflects an inflection point in the company’s strategy and share price.

Significant deviation from its FTSE All-Share benchmark, in terms of the sectors and sizes of companies it is exposed to, can result in a performance profile that looks erratic on a calendar year basis. It did not do well in 2015 or 2019, for example.

The managers believe that, given the strong run by growth versus value over the last few years, it could be time for value funds to outperform once again. Their deep value style makes this a good complement to a core UK equity income fund.

Income is paid half yearly. The fund currently yields 6%.

Please note: As a result of recent extreme economic conditions, many companies have temporarily stopped paying dividends or have significantly reduced the amount they are paying out. This means the income that is likely to be achieved by funds and trusts in the near future may be far less than the historic yield quoted in the portfolios.

September 2020

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Under formal review Under Formal Review

The Schroder Income Fund is included in the ii Super 60 list of rated funds as an Adventurous option within the UK Equity Income category.

In line with our stated methodology, the investment selection committee decided to put the fund under formal review on 3rd August 2020 following an extended period of underperformance. Our in-depth review process will consider the various factors that contributed to the return profile of the fund, and will include a review of the team, investment process and portfolio positioning.

(3 August 2020)

Risk warnings

Past performance of the underlying constituents is not a guarantee of future performance. The value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. 

Annual performance can be found on the factsheet of each fund, trust or ETF. Simply click on the asset’s name and then the performance tab. 

The information we provide in the ii Super 60 investments list is an opinion provided by ii or one of its partners on whether to buy a specific investment. Please note that none of the opinions we provide are a “personal recommendation”, which means that we have not assessed your investing knowledge and experience, your financial situation or your investment objectives. Therefore you should ensure that any investment decisions you make are suitable for your personal circumstances.

If you are unsure about the suitability of a particular investment or think that you need a personal recommendation, you should speak to a suitably qualified financial advisor. 

Any changes to the ii Super 60 investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Outlook.

Details of all recommendations issued by ii during the previous 12 month period can be found here.

ii adheres to a strict code of conduct. Members of ii staff may hold shares in companies mentioned in the ii Super 60 investments list, which could create a conflict of interest. Any member of staff intending to complete some research about any financial instrument in which they have an interest are required to disclose such interest to ii. We will at all times consider whether such interest impairs the objectivity of the recommendation.

In addition, staff involved in the production of this ii Super 60 list are subject to a personal account dealing restriction. This prevents them from placing a transaction in the specified instrument(s) for five working days before and after an investment is included or amended and made public within the list. This is to avoid personal interests conflicting with the interests of the recipients of this ii Super 60 investments list.