January 2010 Monthly Report Schroder Global Quality Total return % 1 month 3 month 6 months Inception Schroder Global Quality Fund (pre-fee) -1.48 5.24 2.98 5.96 MSCI World ex Australia Index -2.88 3.43 0.70 3.88 Relative performance 1.40 1.81 2.28 2.08 Schroder Global Quality Fund (post-fee) -1.56 4.98 2.47 5.27 MSCI World ex Australia Index -2.88 3.43 0.70 3.88 Relative performance 1.32 1.55 1.77 1.39 Inception date of the Schroder Global Quality Fund is 2nd June 2009 Past performance is not a reliable indicator of future performance Please refer to www.schroders.com.au for post-tax returns Portfolio characteristics Market review Portfolio After a buoyant start to the year, global equity markets ended January on a weaker No. of stocks 418 footing, weighed down by concerns over the tightening of monetary policy in China, Active share* 79.4% sovereign default risk in Europe and the threat of new regulations upon financial Beta relative to MSCI 0.88 institutions. In local currency terms, the MSCI World Index declined by 3.6% (-2.9% in Tracking error %p.a. (Not targeted) 3.8 AUD), with previously strong areas of the market exhibiting the weakest performance *Active share is % sum of absolute active positions x 1/2 (Resources and Technology particularly in Asian and Emerging Markets). It was far from a simple top-down market however. Whilst Health Care and Staples outperformed the index, so did Industrials whilst defensive Utilities and Telecoms in 1 month performance attribution by region particular lagged behind. Regionally, Japan was the strongest performing market whilst Asset Stock smaller and mid-cap stocks also performed well despite the weaker overall tone. Group Allocation Selection Total Effect North America -0.01% 0.14% 0.13% Global Quality outperformed the MSCI World ex Australia Index in January, driven by Pan Europe 0.11% 1.07% 1.17% good stock selection within Telecoms, Consumer Discretionary, Resources and Japan -0.06% 0.15% 0.08% Technology where we avoided a partial reversal of some of the excess optimism in Pacific ex Japan -0.11% 0.25% 0.14% areas such as Semi-conductors that was evident late last year. Sector allocation was Emerging Markets Asia -0.09% 0.00% -0.09% also beneficial (particularly the underweight in Materials). Emerging Markets EMEA 0.04% 0.00% 0.04% Emerging Markets LatAm -0.08% 0.00% -0.08% We retain a preference for Industrials (particularly aero and defence) over Technology Cash 0.00% 0.00% 0.00% and prefer Staples and Health within the defensive sectors. That said, the allocation to Total -0.20% 1.60% 1.40% Health Care Equipment Makers and Consumer Staples has been trimmed as some stocks have become a little ‘hot’ in the short term. We also remain underweight Europe at a regional level in favour of Asia and the more established Emerging Markets such 1 month performance attribution by sector as China, Taiwan, Korea and Brazil. Asset Stock Group Allocation Selection Total Effect It was interesting to observe that both our Quality and Value strategies outperformed Consumer Staples 0.04% -0.10% -0.06% the benchmark by similar amounts in January despite approaching the investment Health Care 0.03% 0.06% 0.09% opportunity in very different ways. To a large extent this reveals the much changed Telecommunication Services 0.02% 0.29% 0.31% composition of Value over the past year but we are still finding plenty of opportunities to Utilities 0.04% 0.03% 0.07% purchase higher quality companies on attractive valuations in most sectors. Materials Consumer Discretionary 0.03% 0.26% 0.30% and Technology are the primary areas of the market where this has not been the case Information Technology 0.04% 0.18% 0.22% of late. Industrials 0.10% -0.06% 0.04% Materials 0.11% 0.12% 0.23% Energy 0.00% 0.15% 0.15% Financials 0.02% 0.04% 0.05% Cash 0.00% 0.00% 0.00% Total 0.42% 0.98% 1.40% Unless otherwise stated figures are as at the end of January 2010 Please note numbers may not total 100 due to rounding Monthly Report Schroder Global Quality January 2010 Fund objective Sector weightings versus benchmark To obtain exposure to global equities through Fund (%) Index (%) Active weight (%) investment in an underlying active diversified portfolio of equity and equity related securities of 14.4 10.9 Industrials 3.5 companies worldwide ex Australia. 12.8 9.8 Consumer Discretionary 3.0 12.6 10.5 Consumer Staples 2.1 11.5 10.7 Health Care 0.8 Investment style 10.9 10.9 Energy 0.0 – Quality style which is Growth investing 3.8 4.4 Telecommunication Services -0.6 avoiding 'Glamour' stocks 10.5 11.9 Information Technology -1.5 – Broad universe - over 5,000 stocks from 4.3 6.4 Materials -2.1 over 40 countries 17.5 19.8 Financials -2.2 – Large and mid cap exposure 1.6 4.7 Utilities -3.1 – Non-market cap stock weighting based on 0.2 - Cash 0.2 fundamentals not on size – Benchmark unaware - 'bottom up' unconstrained region and sector allocations Regional weightings versus benchmark – Highly diversified portfolio of +300 stocks Fund (%) Index (%) Active weight (%) 9.2 - Emerging Markets 9.2 6.6 1.9 Pacific ex Japan 4.7 5.2 4.9 Canada 0.3 19.5 21.6 Continental Europe -2.1 8.1 10.8 Japan -2.7 7.4 10.5 United Kingdom -3.0 43.8 50.3 United States -6.6 0.2 - Cash 0.2 Fund details Market cap exposure versus benchmark APIR code SCH0041AU Fund size (AUD) $63,188,616 Fund (%) Index (%) Active weight (%) Redemption unit price (AUD) $1.0495 Fund inception date Jun-09 33.2 64.7 Mega -31.6 Buy/sell spread 0.30%/0.30% 33.8 27.8 Large 6.0 Management costs 0.98% 32.2 7.5 Mid 24.7 Distribution frequency Normally twice yearly - 0.7 - Small 0.7 Jun and Dec - - Micro - Contact www.schroders.com.au E-mail: email@example.com Schroder Investment Management Australia Limited ABN 22 000 443 274 Australian Financial Services Licence 226473 Level 20 Angel Place, 123 Pitt Street, Sydney NSW 2000 Phone: 1300 136 471 Fax: (02) 9231 1137 Investment in the Schroder Global Quality Fund may be made on an application form in the Product Disclosure Statements dated 1 May 2009, available from the Manager, Schroder Investment Management Australia Limited (ABN 22 000 443 274 AFSL 226473) (“Schroders”).This Report is intended solely for the information of the person to whom it is provided by Schroders. 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