Schroder UK Mid Cap Fund Underperforms Benchmark In Half Year

LONDON (Alliance News) - Schroder UK Mid Cap Fund PLC said Friday that it underperformed its benchmark in the half year to end-March, which it attributed to a hit from falling oil and other commodities prices on a number of its portfolio companies.

The company produced a total return on net asset value of 5.6%, compared to a total return of 12.7% for its benchmark, the FTSE 250 excluding Investment Companies Index.

Mid caps performed better than large caps over the half year, the company said, with the 12.7% rise in the benchmark beating a 4.0% by the FTSE 100 Index.

The trust said that the result of the UK general election potentially removes some of the political uncertainty from the stock market, but said it would be "misleading to imply that the UK's economic challenges have gone away."

"The new government is constrained by high public sector debt and its own electoral promises (not least on a referendum on the UK staying in the EU), while the improvement in the domestic economy is still relatively fragile," the trust said in a statement.

"Our strategy of concentrating on companies with strong market positions, sound balance sheets and above all relative pricing power has never been more necessary. The setbacks in individual share prices, the weakness of sterling and continuing strong corporate balance sheets should see further corporate activity despite the many uncertainties," the trust added.

Shares in Schroder UK Mid Cap Fund are trading up 0.3% at 501.00 pence Friday afternoon.

By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews

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Schroder UK Mid & Small Cap Fund