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 LARGE CAP VALUE FUND
INVESTMENT ADVISER’S REPORT FOR THE YEAR ENDED 31 December 2011
Skandia US Large Cap Value Fund – Epoch Investment Partners, Inc.
Below is a report from the Investment Adviser of the Skandia US Large Cap Value Fund for 2011.
The Skandia US Large Cap Value Fund was launched on 26 February 2007 with a starting Net Asset Value per share of USD
10.00.
Investment Adviser’s Commentary
The Skandia US Large Cap Value Fund underperformed its benchmark, the Russell 1000 Index, in 2011. The fund recorded a
return of -2.02%, while the benchmark index returned 1.50% over the period.*
During the first quarter, security selection contributed positively to relative performance while sector allocations were broadly
neutral. Security selection was a positive contributor in healthcare, financials, information technology, materials and utilities. Stock
selection in the energy, consumer discretionary, telecommunication services and industrials was a partial offset to that contribution.
Underweight positions in consumer staples and consumer discretionary had a positive impact, but this was offset by the overweight
positions in financials and the residual cash.
The top contributors to performance this quarter included DaVita, Exxon Mobil, Franklin Resources, UnitedHealth Group and
Aetna. Holdings detracting from performance included Microsoft, Staples, Hudson City Bancorp, Qwest Communications and
International Game Technology.
In the second quarter, positive security selection was offset by the negative impact from sector allocations over the period. Security
selection was a positive or neutral contributor to relative performance in all sectors except consumer discretionary and utilities. The
overweight in healthcare also contributed to relative performance, but the underweight positions in consumer staples as well as the
overweight exposure to financials more than offset the benefit.
The top stock contributors to performance this quarter included: Thermo Fisher Scientific, Aetna, Visa, UnitedHealth Group and
Electronic Arts. Holdings detracting from performance included: Staples, Devon Energy, MEMC Electronic Materials, Corning and
Cameron International.
During the third quarter the Skandia US Large Cap Value Fund marginally underperformed its primary benchmark, the Russell 1000
Index. The major factors behind the underperformance were a combination of security selection and sector allocation. The portfolio
benefited from strong stock selection in the consumer discretionary, materials, industrials and consumer staples sectors. However,
this was more than offset by stock selection in the healthcare, financials, information technology, telecommunication services and
energy sectors. Underweights in consumer staples and telecommunication services detracted from relative performance, as did
overweights in financials and materials. This was partially offset by an overweight in information technology and healthcare and
underweights in energy and industrials, which contributed to relative performance. Among companies, the top contributors to
performance this quarter included: Apple, TJX, Wisconsin Energy, Colgate Palmolive and Visa. Stock holdings that detracted from
performance included: Ameriprise Financial, MetLife, National Oilwell Varco, DaVita and Ingersoll-Rand.
In the last quarter the fund provided a return of 8.03% in the fourth quarter underperforming the benchmark rise of 11.84%. The
weak relative performance was largely due to stock selection in the IT sector, software companies in particular, and in the industrials
sector. The portfolio‟s cash position was also a drag in a rising market. On the positive side, stock selection among financials,
energy and consumer discretionary companies benefited returns. A less-than-index weight in the consumer staples sector also helped
results. The top individual stock contributors to performance this quarter included Exxon Mobil, National Oilwell Varco,
Ameriprise Financial, Visa and Boeing. Holdings detracting from performance included Thermo Fisher Scientific, Oracle, Darden
Restaurants, MEMC Electronic Materials and Marsh McLennan.
Source: Epoch Investment Partners, Inc. 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 Large Cap Value Fund will outperform this benchmark.
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