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