Schroder launches geared global equities fund
Schroder Investment Management Australia has announced the launch of its Geared Global Active Value Fund (hedged) on July 1, 2008.
Schroder head of products Stephen Kwa said the fund borrowed from external lenders to leverage exposure, a benchmark unconstrained global equity strategy with a value bias.
According to Kwa, unlike geared Australian equities funds, there were few good international equities funds in the Australian market.
“As one of the highest dividend yielding global equity funds in the market, the Schroder Global Active Value Fund (hedged) is ideally suited to gearing not only because its yield can support borrowing costs but also because it is highly diversified across a large number of stocks from up to 50 countries, including emerging markets,” he said.
Kwa said the targeted gearing level is 50 per cent, which means that $1 of unit holder assets is matched with $1 of borrowing. Gearing provides investors with the potential to magnify returns on investments, albeit with increased volatility in returns.
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