SKANDIA GLOBAL FUNDS PLC - Fidelity Investments

Skandia Global Funds plc
Interim Report and Unaudited Financial Statements for the period ended 30 June 2012
SKANDIA US ALL CAP VALUE FUND
INVESTMENT ADVISER’S REPORT FOR THE PERIOD ENDED 30 June 2012
Skandia US All Cap Value Fund – GAMCO Asset Management, Inc.
Below is a report from the Investment Adviser of the Skandia US All Cap Value Fund for the first six months of 2012.
The Skandia US All Cap Value Fund was launched on 11 April 2002 with a starting Net Asset Value per share of USD 10.00.
Investment Adviser’s Commentary
The Skandia US All Cap Value Fund underperformed its benchmark, the Russell 3000 Index, for the first half of 2012. The
Fund returned +0.86%, while the benchmark index returned +9.32% over the period.* The Fund achieved a solid real gain in the
first quarter, but lagged the benchmark. Both sector allocation and stock picking were unhelpful to relative performance during
the period, although being underweight in the utilities, energy and healthcare sectors, and an overweight position in
outperforming consumer discretionaries proved beneficial. Stock selection among financials was another significant plus for
performance. But this was outweighed by unsuccessful security selection elsewhere, while an underweight position in strongly
outperforming IT stocks and overweights in the lagging industrials and telecoms sectors significantly weighed on the Fund’s
relative performance.
The Fund underperformed its benchmark in the second quarter. Stock selection overall was the single biggest detractor from
performance, notably in telecoms, consumer discretionary, industrials and healthcare. However sector allocation was a net
positive; especially beneficial were underweights in IT and energy, plus an overweight in consumer staples.
At the stock level, the three biggest detractors from performance were carmaker Ford Motor Company, large vehicle producer
Navistar and NII Holdings. Ford’s stock faced headwinds in the second quarter from investor worries over future sales, amid
signs that the global economy was cooling. Meanwhile, truck/bus manufacturer Navistar, based in Lisle, Illinois, saw its shares
fall because of a lack of positive news regarding EPA certification of the company’s 13L EGR engine. Furthermore, the
announcement of $25 million in non-conforming penalties and higher foundry start-up costs headlined the company’s guidance
change following a weaker than expected first quarter. Wireless telecoms group NII Holdings, focused primarily on business
customers in Latin America, saw its shares decline amid investor concerns about postponements to the start dates for 3G
commercial network launches, as it was experiencing construction-related delays.
Source: GAMCO Asset Management, Inc., as at 29th June 2012.
* Performance figures refer to Class A 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 All Cap Value Fund will outperform this benchmark.
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