Schroder have recently announced the following changes to the Schroder UK Absolute Target fund, effective as at 1st April 2015:

The fund's investment objective and policy has changed from investing in predominantly the UK to investing on a Pan-European basis.

The fund's name will be changed from the Schroder UK Absolute Target Fund to the Schroder European Absolute Target Fund.

• The performance fee methodology has also changed. The Fund currently applies a performance fee equal to 20% per cent of the increase in the net asset value of each Share of the Fund in respect of each 12-month performance period. For the performance fee to be payable any previous underperformance needs to have been made good during the course of that performance period.  Schroder's have now introduced a hurdle rate, so the fund will be required to outperform 3 Month LIBOR over the relevant twelve month performance period before the performance fee becomes payable. Any shortfall of the performance return to the hurdle rate will need to be made good before the performance fee is charged.

There will now be a change to the fund's share class hedging strategy, so that the Pounds Sterling denominated share classes will be hedged against the Euro and the Euro denominated hedged classes will not be currency hedged.

Square Mile view the changes positively as the introduction of the hurdle rate will reduce the funds OCF while the broadening of the investment universe should provide the fund manager Steve Cordell with a wider opportunity set. This is particularly true for a number of sectors such as luxury goods, automobiles and chemicals that are more prominent in European than the UK market. The change also better reflects Mr Cordell's skill set and experience given that he has previously managed pan European mandates.

Schroder's have confirmed that the costs and expenses of the proposed changes including the costs of convening and holding the Shareholder meeting will be paid for by Schroder Unit Trusts Limited. Any costs incurred in respect of the restructuring of the portfolio of investments of the Schroder UK Absolute Target Fund from the current holdings, to holdings primarily European will be borne by the Fund. It is estimated that such costs will be less than 50 basis points.