SKANDIA GLOBAL FUNDS PLC - Fidelity Investments

Skandia Global Funds plc
Annual Report and Audited Financial Statements for the year ended 31 December 2011
SKANDIA US CAPITAL GROWTH FUND
INVESTMENT ADVISER’S REPORT FOR THE YEAR ENDED 31 December 2011
Skandia US Capital Growth Fund – Marsico Capital Management, LLC
Below is a report from the Investment Adviser of the Skandia U.S. Capital Growth Fund for 2011.
The Skandia US Capital Growth Fund was launched on 17 April 2002 with a starting Net Asset Value per share of USD 10.00.
Investment Adviser’s Commentary
The Skandia US Capital Growth Fund underperformed its benchmark, the Russell 3000 Growth Index, in 2011. The fund returned -
4.98%, while the benchmark index returned +3.61% over the period.*
During the first quarter, stock selection within financials and, to a lesser extent, industrials had a negative impact over the quarter. The
underweight exposure to energy was also a drag on performance. At stock level, the main detractors were Nike (consumer durables
and apparel), F5 Networks (technology hardware and equipment), Broadcom (semiconductors and semiconductor equipment),
Citigroup (diversified financials) and Freeport-McMoRan Copper & Gold (materials).
On the positive side, stock selection within information technology was strong. Top individual stock contributors included Baidu
(software and services), priceline.com (retailing), Dow Chemical (materials), EOG Resources (energy), and Apple (technology
hardware and equipment).
During the second quarter, stock selection within financials was the key driver of the weaker performance over the quarter. At stock
level, the main detractors were Goldman Sachs and Citigroup (both diversified financials), EOG Resources (energy), Hutchison Port
Holdings (transportation) and Dow Chemical (materials).
On the positive side, stock selection within consumer discretionary was strong, while the fund‟s overweight exposure to this sector
also added value. Top individual stock contributors included Tiffany & Co (retailing), Nike (consumer durables and apparel),
Amazon.com (retailing), Green Mountain Coffee Roasters (food beverage and tobacco) and Compagnie Financiere Richemont
(consumer durables & apparel).
The Skandia US Capital Growth Fund modestly lagged its primary benchmark index, the Russell 1000 Growth Index, amid the heavy
volatility of the third quarter. Both sector allocation and stock selection had a negative effect on performance overall during much of
the quarter. Nevertheless, in the strong consumer discretionary area being overweight and stock selection both benefited performance
in August and September. However, being underweight and stock picking in consumer staples, which outperformed in the third
quarter, proved negative for performance. The fund underperformed the benchmark in a very volatile fourth quarter. Stock picking
was negative overall, but particularly within the industrials, IT and consumer discretionary sectors. However, share selection was
positive within the areas of energy, financials and particularly healthcare.
At the sector level, positioning was beneficial in most areas with the exception of the Investment Adviser‟s underweights in energy
and financials. Among companies held in the fund, Amazon was the biggest negative for performance as its shares underperformed on
poor company newsflow and disappointing earnings. Meanwhile, First Niagara Financial was hit by investor concerns over the
banking sector in the fourth quarter. On a brighter note, Occidental Petroleum and National Oilwell Varco benefited from the recovery
in oil prices and pick up in global demand. Intuitive Surgical was one of the many winners in the healthcare industry, which gained on
the growing expectations of benefits accruing to companies in the sector from the introduction of healthcare reforms in the US.
The fund underperformed the benchmark in a very volatile fourth quarter. Stock picking was negative overall, but particularly within
the industrials, IT and consumer discretionary sectors. However, share selection was positive within the areas of energy, financials
and particularly healthcare.
Source: Marsico Capital Management, LLC as at 31 December 2011.
* Performance figures refer to Class A1 shares and are sourced from Morningstar. Calculation basis: bid to bid, net of fees, gross
income reinvested in fund base currency (US Dollars).
References to benchmarks are for illustrative purposes only and are not intended to imply a performance objective. There is no
guarantee that the Skandia US Capital Growth Fund will outperform this benchmark
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