Stock Picks | Video - Jean Roche Of Schroders Explains How Her UK Midcap Fund Consistently Delivers 'Alpha'

10th Oct '23 by Paul Hill

8 comments 1477 reads

Timestamps

00:00 Outlook for equites & importance of balance sheets.
04:35 Defence stocks: QinetiQ, Chemring & Babcock International Group
12:15 Senior plc and M&A trends
17:00 Inchcape plc
20:10 Spectris plc & Oxford Instruments
25:15 Diploma PLC
28:40 Victrex & investing in unique businesses
33:15 UK housebuilders: Vistry Group, Redrow & Crest Nicholson plc
40:20 Future
46:55 Games Workshop Ltd & when to sell winners.
52:15 4imprint
55:20 Dunelm
59:55 KELLER
61:05 Man Group
62:55 Computacentre

Disclosure: I was paid by Vox Markets to interview Jean Roche

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About the Author

Paul Hill

Premium Member

Stocks owned : EQLS, AGFX, Pfizer, Bristol Myers, Roche, WATR, VCT, MBH, ASTO, IOM, TR25, ESYS, ELCO, IHC, Paypal & AOM Elsewhere, I'm also paid by Vox Markets (as a contractor) to interview interview fund managers, capital market experts & companies (re EQLS, VRCI, BELL, FIN, AVG, AVCT, LLAI, VLG, FADL, SUP, ELCO, LORD , MPAC & ONC). I believe all these stocks are clients of Vox.Lastly my 24 year HIT RATE is only 62%. Meaning 38% of the time I lose money (ie often wrong) - albeit my winners are (on average) 1.5x larger than my losers. Please Do Your Own Research. more »

8 comments

Paul Hill

11th Oct '23

Wolf of Small Street

12th Oct '23

Not sure how anyone can say they've delivered alpha when the 10 year returns are much worse than the FTSE 250 over 10 years. The yearly fees of a FTSE250 tracker are also less than half of Schroders mid cap fund.

KevinS1

13th Oct '23

Hi Paul,

The results of this trust look pretty poor considering you are paying much higher charges (0.89% vs 0.12% for a cheap FTSE250 ETF tracker). I would have hoped active stock-picking would have provided some decent returns, but this doesn't look to be the case here.

Wolf of Small Street

13th Oct '23

Think it's around 95% of fund managers can't beat a tracker fund. Most seem very intelligent people and talk a good game but Ive no idea why private investors would get involved. Theres a whole industry built on poor performance and excessive fees. Schroders wouldn't even cover inflation over 10 years and they hold some very good companies.

Most private investors would do much better just buying a global tracker, as long as you can hold for a minimum of 10 years and drip feed in money. Could even buy a global tracker excl. UK stocks, leaving the option to play around with a % of your portfolio in UK stocks.

KevinS1

14th Oct '23

Totally agree WOSS. I hold a variety of ETF's covering non-UK stocks and do my own stock-picking largely on UK small to mid-caps.

I have very little knowledge of markets outside the UK and tend to compare some well known funds with a variety of good-quality ETF's before deciding on what to invest in.

Here is an example of some analysis I was doing to look at some Global, US & UK income options - the reference to Ian Shadrack is that he has a useful YouTube series of videos comparing some ETF's & funds that I always find interesting and provides some good ideas for further research.

I set some "targets" for performance to allow me to colour code the returns. Costs relate to HL - obviously there is their platform fee on top of this which isn't the cheapest.

Wolf of Small Street

14th Oct '23

Thanks Kevin, some very interesting info there. Will check out the YouTube videos, not someone I've seen before...exciting weekend beckons for me!! I did have a successful short in Jupiter fund management yesterday so promised the wife a night out Saturday to spend the Ill-gotten gains so will watch tomorrow.

When humans are involved in stock picking ego tends to come to the fore so you'll see lots of bets against the market, stubbornness, overexposure etc

I think it's one area ripe for an AI takeover. I'd be interested then. Let the AI bots go with only cold hard data, no ego and a history of human psychology. Maybe then it'll be worth the 1% fee.

Northender

14th Oct '23

Thanks Kevin, I have a similar strategy and table above very interesting. Sorry to nitpick but I hold JGGI and I think the performance is quite a bit better than in the table, possibly reinvested dividends excluded? The below is from AIC.

KevinS1

15th Oct '23

Hi Northender.

Thanks for that.....you have made me question myself and you are correct with regards to the AIC website.

Originally I thought the difference between HL figures and the AIC were as you say due to dividends, but I then checked Schroder UK Mid Cap Fund (LON:SCP) and agin found a large difference between HL & AIC.

However it can't be due to dividends surely - the 1yr return on HL is 9.98% and on the AIC it is 16.8% - its dividend yield is 3.65% although I guess its discount could be closing - but it seems it hasn't moved a lot (if at all).

Anyway, I will trust the AIC figures more than HL, so will bear that in mind when I start looking at some others IT's. For ETF's I use JustETF for all of my data.

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Video - Jean Roche of Schroders explains how her UK midcap fund consistently delivers 'Alpha'

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About the Author

Paul Hill

8 comments

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