Schroders Australia

Schroders is a UK-listed global asset manager that's been operating in Australia for over 50 years. We actively manage money for retail and institutional clients across a range of Australian and global equity, fixed income and multi-asset strategies.

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The disruptors have won

Schroders Australia

It is now passé to say the Australian equity market is becoming fully valued, led by the TIHCs — Technology, Infrastructure, Healthcare and China-facing consumer stocks — where multiples are at record levels. The bigger question is whether this is, in fact, just a natural state of affairs. Shouldn’t investors... Show More

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Schroders Broker Survey - Volatility impacts as investors focus on protecting capital

Schroders Australia

Schroders Australia has completed its third broker insights survey, diving into how brokers are investing. Volatility has pushed the need to protect capital to the top of the priority list. Show More

The Royal Commission opens Pandora’s box

Schroders Australia

The Royal Commission has shown banking, financial advice, and mortgage broking to be sorely lacking on the basics of looking after the customer. It seems that incentives to lend more money and charge more fees were somewhat more powerful than those aimed at improving customer wellbeing. Show More

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Now Open: 2018 Broker Asset Allocation Survey

Schroders Australia

Twice a year Livewire partners with Schroders Australia to conduct a survey into the asset allocation strategies of Australian brokers. In April 2017 the survey highlighted that a growth bias adopted by many brokers had been a winning strategy. By September we saw that diversification had replaced growth as the... Show More

How Australian stockbrokers are investing in 2017

Schroders Australia

Following the 2017 annual reporting season Schroders has again surveyed Australian brokers to gain insight into their asset allocation views. The inaugural survey six months ago highlighted the top three objectives for participating brokers were to generate income, maximise returns including franking credits, and protect capital. Show More

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Now Open: Stockbroker Asset Allocation Survey

Schroders Australia

Results from the inaugural stockbroker asset allocation survey were published in April this year. It’s the only information available on how this important part of the market is implementing portfolios. Three interesting points to arise were that generating income was listed as the most important objective, portfolios were heavily skewed... Show More

Schroders Australia Sponsored Wire

Invest beyond the benchmark

Schroders Australia

Diversifying away from the index is a significant challenge for many investors. The recent dominance of just a few industries means that many portfolios lack true diversification, exposing them to economic downtrends. Andrew Fleming, deputy Head of Australian Equities at Schroders, says it is time to think differently about investing.... Show More

Sponsored Content Schroder Equity Opportunities Fund

The Paradox of Passive. Beware of feedback loops

Schroders Australia

The rise of passive investing over the last decade has been remarkable, and the “active v passive” debate hasn’t abated, but the debate tends to focus on how much of the market is passively managed and less so on the capital flows i.e. who is buying the stock of companies... Show More

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How brokers are thinking about asset allocation

Schroders Australia

Institutional asset managers and retail financial planners have been providing information on their investment allocations for years. As far as we are aware there is nothing available in the stockbroker advised space to understand how broker equivalent portfolios are positioned and how they are being implemented. We can make assumptions,... Show More

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Beware of manipulated utopias

Schroders Australia

As a fan of dystopian classics such as Huxley’s ‘Brave New World’ and Orwell’s ‘1984’, Martin Conlon, Schroders’ Head of Australian equites, finds their insights into the perils of searching for a manipulated utopia alarmingly relevant to today’s financial world. As a rationalist, he suggests the benefits of manipulating asset... Show More

A massive understatement about Australia’s economic outlook

Schroders Australia

Recessions are capitalism’s ways of correcting the imbalances that expanding economies ferment. Australia’s 25-year expansion has allowed two debt-based distortions to fest. These debt blowouts will be paramount in deciding how Australia’s economy performs in coming years. The threat posed by these imbalances, however, is contentious. One way to express... Show More

Australia economy Michael Collins

Risk is far higher than volatility suggests

Schroders Australia

Market risk is building, despite a lack of evident market volatility. The recent poor performance of REITs highlights the significant repricing that is possible if central banks lose their influence over rates markets. Low, steady returns at least imply capital preservation, at a minimum, as well as the liquidity to... Show More

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Four ways to use the Schroder Real Return Fund in your portfolio

Schroders Australia

The Schroder Real Return Fund (ASX:GROW) aims to provide a return of 5% above the inflation rate. We seek to do so in a relatively steady manner, and avoid badly-timed drawdowns. As such we see four ways investors can use the Fund in their portfolios. Firstly, we think it is... Show More

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How to get steady returns using “objective-based investing”

Schroders Australia

The 20% pullback we saw in the ASX between April 2015 and Feb 2016 was an uncomfortable reminder of just how far equity markets can fall. There is always the chance that a significant decline could occur at just the wrong time for an investor. Is there a way to... Show More

Real Returns ASX:GROW Sponsored Wire

Oh, inverted world

Schroders Australia

‘Oh, Inverted World’ is the title of the 2001 album of the US indie band The Shins. It's a good description of todays’ topsy turvey world created by loose monetary policy. One big distortion in the anomaly we see in stock pricing tied to business duration. Much-used discounted-cash flow analysis... Show More

Carry on while waiting for Fed and BoJ

Schroders Australia

While investors await the decision by the policy-setting boards of the Federal Reserve and the Bank of Japan, carry on remains the theme in bond markets. The Fed’s retreat from hawkish advances, the European Central Bank’s and the BoJ’s battle against positive yields and the Bank of England’s bazooka following... Show More

bonds fixed income Stuart Dear

Want a smoother ride? Schroders Real Return fund now on the ASX

Schroders Australia

At Schroders our objective based approach focuses on delivering a more stable return experience with an appropriate level of risk. The Schroder Real Return Fund is an efficient solution for investors seeking smoother, real returns. Our approach is an actively managed, objective based fund with the flexibility to adapt to... Show More

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Why the order of portfolio returns is also essential to performance

Schroders Australia

The closer to retirement, the less likely a portfolio will recover from a significant correction. A 15% drawdown following a GFC type event would ultimately have a fraction of the effect on an investor that has 35 years to retirement, than it would on an investor with just 5 years... Show More

ASX:GROW Sponsored Wire

Timing is good, but asset allocation is better

Schroders Australia

A portfolio’s start date, along with the performance of its component assets over the investment horizon, will determine the final outcome. Hence the saying ‘timing is everything’. If you are unable to control the year you were born and when you started investing, you need to change your asset mix... Show More

ASX:GROW Sponsored Wire

Why traditional portfolios need to change

Schroders Australia

At Schroders, we believe there are two significant downsides to the traditional fixed strategic asset allocation approach used by many investors. Firstly, the timing of when a portfolio commences and the performance of shares over the investment horizon will determine the future outcome, hence the saying ‘timing is everything’. You... Show More

schroders Real Returns ASX:GROW Sponsored Wire

Thanks Michael. For every company we value, we determine "sustainable earnings", which is an average level of profit we expect a company to make in the future; this may often be a long way from current earnings. We feel that the Australian banks will earn (approximately 25%) less in the future than they do currently, especially as credit growth slows and credit costs and other regulatory penalties rise. Having said that, the current earnings multiple attaching to the Banks is relatively low, whereas for many ASX companies, and especially growth oriented industrials, multiples are very high. Hence, even as profits fall, it need not be that the Banks are ultimately poor investments, especially from this point relative to other companies listed on the ASX. Put another way; in recent years, multiples have tended to be pro cyclical, that is, as earnings have risen, so have multiples, and vice versa. In the past year; that has started to reverse so that as an investor you may invest in a company which has earnings growing/being upgraded but still underperforms (as Wisetech Global, say, has in the past year) or alternatively a company where earnings are falling/being downgraded but where the share price has outperformed (as Chorus, say, has in the past year). Of course, for most companies, multiples tend to still follow earnings, but there are now exceptions to the rule starting to emerge when multiples get to extremes, and we would expect this to continue apace. Hope this helps. Regards Schroders Australia

On A time to buy profits not hope -

Hi Tim, there will always be some active managers who underperform and some who outperform over different time periods. Interestingly if we go back a few years there were some consistent periods of outperformance by the average active manager. We would always caution any of these statistics (both the positive and negative ones) as 1) they don’t cover the full universe of funds, 2) they are not asset weighted and 3) the fees that are used are generally not the fee for investment but include a number of other fees. As noted above there is recent research that demonstrates institutional active management accounts have outperformed passive benchmarks. As the head of a passive ETF provider I'm sure you have your own views, but hopefully this is useful a contribution to the topic.

On The Paradox of Passive. Beware of feedback loops -

Hi Albert, The issue is that many “index” funds are not investing along broad market capitalisation weights as many of them are not broad market index funds. That is what is creating distortions.

On The Paradox of Passive. Beware of feedback loops -

Hi Graeme, The active vs passive debate is really the subject of many other papers....but we should be aware of the fact that anyone who is not a market cap based passive investor is by definition an active investor. This covers both professional and non-professional investors, pooled and segregated funds, retail and institutional, offshore and onshore. A recent academic paper by Gerakos, Linnainmaa and Morse covering $17 trillion of assets under management shows that institutional active management accounts have outperformed passive benchmarks.

On The Paradox of Passive. Beware of feedback loops -

Thanks for your question Patrick. In terms of growth we are referring to more traditional measures of “momentum growth”. We prefer to focus on measures of Value and Quality. Quality investing aims to offer investors a more stable form of growth investing and a far more consistent return profile than traditional growth managers. We focus on identifying companies that are profitable, offer stable growth and are financially strong while avoiding ‘glamour’ or thematic stocks which we believe carry a higher risk of disappointment. Value investing is a style of investing which focuses on companies whose shares appear under-priced; these may include shares that are trading at, for example, high dividend yields or low price-to-earning or price-to-book ratios. Our measure of Value is much more broadly based (30+ value measures) than a single measure. (I’ve included our broad definitions in the attached image on the original post.)

On Global Shares – Healthy value -