SKANDIA GLOBAL FUNDS PLC - Fidelity Investments
SKANDIA GLOBAL FUNDS PLC - Fidelity Investments
SKANDIA GLOBAL FUNDS PLC - Fidelity Investments
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Skandia Global Funds plc<br />
Annual Report and Audited Financial Statements for the year ended 31 December 2011<br />
<strong>SKANDIA</strong> US LARGE CAP VALUE FUND<br />
INVESTMENT ADVISER’S REPORT FOR THE YEAR ENDED 31 December 2011<br />
Skandia US Large Cap Value Fund – Epoch Investment Partners, Inc.<br />
Below is a report from the Investment Adviser of the Skandia US Large Cap Value Fund for 2011.<br />
The Skandia US Large Cap Value Fund was launched on 26 February 2007 with a starting Net Asset Value per share of USD<br />
10.00.<br />
Investment Adviser’s Commentary<br />
The Skandia US Large Cap Value Fund underperformed its benchmark, the Russell 1000 Index, in 2011. The fund recorded a<br />
return of -2.02%, while the benchmark index returned 1.50% over the period.*<br />
During the first quarter, security selection contributed positively to relative performance while sector allocations were broadly<br />
neutral. Security selection was a positive contributor in healthcare, financials, information technology, materials and utilities. Stock<br />
selection in the energy, consumer discretionary, telecommunication services and industrials was a partial offset to that contribution.<br />
Underweight positions in consumer staples and consumer discretionary had a positive impact, but this was offset by the overweight<br />
positions in financials and the residual cash.<br />
The top contributors to performance this quarter included DaVita, Exxon Mobil, Franklin Resources, UnitedHealth Group and<br />
Aetna. Holdings detracting from performance included Microsoft, Staples, Hudson City Bancorp, Qwest Communications and<br />
International Game Technology.<br />
In the second quarter, positive security selection was offset by the negative impact from sector allocations over the period. Security<br />
selection was a positive or neutral contributor to relative performance in all sectors except consumer discretionary and utilities. The<br />
overweight in healthcare also contributed to relative performance, but the underweight positions in consumer staples as well as the<br />
overweight exposure to financials more than offset the benefit.<br />
The top stock contributors to performance this quarter included: Thermo Fisher Scientific, Aetna, Visa, UnitedHealth Group and<br />
Electronic Arts. Holdings detracting from performance included: Staples, Devon Energy, MEMC Electronic Materials, Corning and<br />
Cameron International.<br />
During the third quarter the Skandia US Large Cap Value Fund marginally underperformed its primary benchmark, the Russell 1000<br />
Index. The major factors behind the underperformance were a combination of security selection and sector allocation. The portfolio<br />
benefited from strong stock selection in the consumer discretionary, materials, industrials and consumer staples sectors. However,<br />
this was more than offset by stock selection in the healthcare, financials, information technology, telecommunication services and<br />
energy sectors. Underweights in consumer staples and telecommunication services detracted from relative performance, as did<br />
overweights in financials and materials. This was partially offset by an overweight in information technology and healthcare and<br />
underweights in energy and industrials, which contributed to relative performance. Among companies, the top contributors to<br />
performance this quarter included: Apple, TJX, Wisconsin Energy, Colgate Palmolive and Visa. Stock holdings that detracted from<br />
performance included: Ameriprise Financial, MetLife, National Oilwell Varco, DaVita and Ingersoll-Rand.<br />
In the last quarter the fund provided a return of 8.03% in the fourth quarter underperforming the benchmark rise of 11.84%. The<br />
weak relative performance was largely due to stock selection in the IT sector, software companies in particular, and in the industrials<br />
sector. The portfolio‟s cash position was also a drag in a rising market. On the positive side, stock selection among financials,<br />
energy and consumer discretionary companies benefited returns. A less-than-index weight in the consumer staples sector also helped<br />
results. The top individual stock contributors to performance this quarter included Exxon Mobil, National Oilwell Varco,<br />
Ameriprise Financial, Visa and Boeing. Holdings detracting from performance included Thermo Fisher Scientific, Oracle, Darden<br />
Restaurants, MEMC Electronic Materials and Marsh McLennan.<br />
Source: Epoch Investment Partners, Inc. as at 31 December 2011.<br />
* Performance figures refer to Class A1 shares and are sourced from Morningstar. Calculation basis: bid to bid, net of fees, gross<br />
income reinvested in fund base currency (US Dollars).<br />
References to benchmarks are for illustrative purposes only and are not intended to imply a performance objective. There is no<br />
guarantee that the Skandia US Large Cap Value Fund will outperform this benchmark.<br />
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