Schroder UK Mid Cap Fund plc

Schroder UK Mid Cap Fund plc has today released its Annual Report for the year ended 30 September 2019.  

Key highlights for the year ended 30 September 2019 were:

  • Share price total return[1] has increased by 4.0% compared with the Benchmark’s[2] total return of 0.2%
  • The Company’s long-term performance record remains strong, with both the 10-year Net Asset Value (NAV) and share price annualised total returns in excess of 12% - outperforming the benchmark
  • The proposed final dividend, combined with the interim dividend of 3.8p per share paid during the year, brings total dividends for the year to 18.5p per share, an increase of 15.6% over dividends declared in respect of the previous financial year. At the current share price of 646p (as at 18 December 2019) this represents a yield of 9%
  • The share price is up 19.6% since the year end after the bounce in sterling and confidence in the UK general election result on 13 December 2019
  • Following the election result, the share price discount to NAV has closed materially, suggesting that the discount had been driven by sentiment about the UK mid cap sector in which the Company invests
  • The fund has had a consistent, robust and repeatable investment process and is currently ranked first out of 11 trusts in the AIC UK All Companies sector[3] since launch (2 May 2003)

Jean Roche, Co-Manager of Schroder UK Mid Cap Fund plc, said:

“Our investment strategy is centred around selecting dynamic, high-quality growth companies – what we would call long-term growth opportunities; those with organic growth, pricing power and strong management teams, with disruptive tendencies.

“We believe that the holdings are well placed to continue to generate superior long-term returns. Many are enjoying a virtuous circle where a rising stream of earnings is underpinning progressive dividend policies and simultaneously supporting reinvestment into the business to drive future growth. Market attention has come back to these types of companies in recent months, and we look forward to this continuing.”

Eric Sanderson, Chairman of Schroder UK Mid Cap Fund plc, said:

“Investors in domestic stocks have responded very positively to the recent decisive Conservative victory in the UK general election, with this being reflected in both the share prices of companies in which the Company invests, and the Company’s share price.

“We hope that this new found optimism about domestic stocks will continue, but our confidence in the future remains primarily in the quality of the holdings. Their ability to keep growing cannot be completely independent of the broader issues and potentially more difficult economic conditions worldwide next year, but if our manager can keep on choosing the right companies the growth in our investment income will continue to be reflected in the share price.

“It is welcome news that the share price is up 19.6% since the year end after the bounce in sterling and confidence in the election result. This situation is dynamic, but if our holdings keep on doing well so will we.”

To read the full annual report, click here.

Schroder UK Mid Cap Fund plc – Risk Considerations

The Company invests in smaller companies that may be less liquid than in larger companies and price swings may therefore be greater than investment companies that invest in larger companies.

The Company 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 Company may be higher but there is the potential that performance or capital value may be eroded.

The Company 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.

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.

 

For further information, please contact:

Estelle Bibby, Head of Media Relations

+44 20 7658 3431

estelle.bibby@schroders.com

 

Melanie Sabol, PR Manager

+44 20 7658 7480

melanie.sabol@schroders.com

 

Note to Editors

For trade press only.  To view the latest press releases from Schroders visit: http://ir.schroders.com/media

[1] Total return is the combined effect of any dividends paid, together with the rise or fall in the NAV per share or share price.

[2] FTSE 250 (ex-Investment Companies) Index

[3] Companies which invest in UK securities and aim to produce a total return to shareholders from capital growth and some dividend income. They will have at least 80% of their assets in UK securities.