Schroder Income Fund Class Z Income GBP


March 2026
 
  • Opinion
    Square Mile rating
  • Performance
    3 years annualised returns
    15.08%
    % of time met performance objective over 5 years
    53.7%
  • Risks
    Risk of asset class
    1 2 3 4 5 6 7 8 9 10
    Risk of fund within asset class
    1 2 3 4 5
  • Costs
    Ongoing charges
    0.89%
    Transaction costs
    0.16%
    Total cost of investment
    1.05%
  • Responsible
    What type of investor are you?

Source: Square Mile and LSEG Lipper (all rights reserved), Data as at: 31st January 2026.

Overview

The managers are looking to generate a high dividend income, primarily from UK listed equities, that is expected to grow over time. The level of distributions is dependent upon market conditions and the level of income can fluctuate.

Equity income funds are a suitable capital accumulation strategy, when income is reinvested.

 

Square Mile’s Expected Outcome

We believe a return of 2% p.a. ahead of the FTSE All Share index over rolling five year periods, alongside a growing dividend distribution is a reasonable expectation for this fund.

Square Mile’s Opinion

The strategy deployed by the fund's managers, Mr Kirrage and Mr Evans, is a credible one that we feel should add value over the longer term, yet it is also a little different from the more traditional equity income approach. Indeed, this fund is run in a similar manner to the Schroder Recovery fund that Mr Kirrage also manages. However, given this strategy, as its name suggests, has a greater inclination toward income generation, it tends to be managed in a more conservative manner than its Schroder Recovery counterpart.

The central tenet of the managers' philosophy is that share prices tend to move further than the changes in the companies' fundamentals justify. Moreover, when markets are low and falling, the managers are likely to be aggressively positioned as often they see short term volatility as an opportunity to increase exposure to their preferred stocks. We would highlight that, although this can be painful for investors in the short term, these periods may often represent times at which the strategy has the greatest opportunities ahead of it. That being said, investors should note that a contrarian style such as this does tend to be more volatile than other equity income strategies.

We believe that the managers are capable of coping with difficulties that could arise from market volatility. Ably assisted by the strong Schroder's Global Value team, the managers adhere to a disciplined investment approach and process which enables them to remain focused regardless of market noise as well as remaining dispassionate about companies, which means that they can focus purely on their valuation discipline.

Fund Manager’s Formal Objective

The fund aims to provide income and capital growth in excess of the FTSE All Share (Gross Total Return) index (after fees have been deducted) over a three to five year period by investing in equities of UK companies.

Capital Accumulation, Income UK
Active FTSE All Share
Equity IA UK Equity Income
4.01% £1,269M
Andrew Lyddon, Tom Grady April, October
0.9 Pounds Semi-annual
GBP 11/05/2011
0.9 Pounds 25/02/2026
0.00% -
- -

Source: Square Mile and LSEG Lipper (all rights reserved), Data as at: 31st January 2026
 
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Schroder Income Fund Class Z Income GBP
 
 

Asset Manager Overview

Schroders is a FTSE 100 listed large global investment management firm that has a heritage which dates back over 200 years. Today, it is responsible for £778.7 billion of assets (as of end of December 2024), has 38 offices worldwide and manages funds across all asset classes. 

Fund Manager/Team Overview

In June 2024, it was announced that co-head and longstanding member of the Schroder Global Value team, Kevin Murphy, would be leaving the firm that month. Schroders re-structured the team such that Mr Murphy's co-head, Nick Kirrage, assumed sole leadership of the team. In addition, Mr Kirrage stepped back from focussing on the team's global mandates (a role he assumed in September 2022), and returned to the day to day involvement on the UK strategies. The result is a three-person sub-team overseeing all UK value mandates and he now works closely with experienced current co-managers Andrew Lyddon (Recovery) and Andy Evans (Income and Income Maximiser).

Investment Philosophy & Process Overview

In essence, the managers believe that markets tend to overreact in the short term and that opportunities are available for investors willing to take longer-term views. The managers screen the market for stocks that have underperformed over the medium term and that have interesting valuation metrics. They then undertake a rigorous fundamental assessment of the company and they aim to understand the reasons for the share price underperformance and how this might be reversed.

The managers screen the market for stocks trading on low valuations when compared to their long term historical averages. Quite what defines long term in this context depends upon the specific circumstances of the businesses. Certain industries will never replicate their former glory days, for example newspaper businesses, but this is not to say that their franchises are terminally impaired. The fund will often take positions in companies that have structural problems, though the team will steer clear of situations where problems on the balance sheet hint that the viability of the business may be in jeopardy.

The type of stocks that the team is seeking tend to be high dividend yielding stocks and stocks where the dividend has room to grow materially. This fund has a bias towards larger companies listed within the FTSE 350 and there may be material differences between the sector positioning within the fund and the market. The fund often has some positions in shares listed abroad, though total exposure will not exceed 20%. Such overseas exposure may be currency hedged. The fund is typically made up of between 30 and 50 stocks.

 
 
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Schroder Income Fund Class Z Income GBP
 
 

ESG Integration

Fund ESG Integration

ESG analysis is incorporated into the investment process applied to this fund. In fact, it forms part of the initial quantitative screen used in idea generation, which enables the managers to identify any potential value traps by highlighting any seemingly red flags or risks which could prevent a company's true value from being realised. Once these have been identified, the qualitative research begins to see if they are actually material.

In recent years, the managers have become increasingly aware of the potential impact, both positive and negative, that ESG factors could have on a company's viability, and so it is an area that they have focussed on more than perhaps in the past. Essentially, they want to ensure that they have truly understood the key risks and/or rewards relevant to their holdings and how this might impact upon their performance over time. To do so, they use the insights gained from the team's internal research, in particular, Roberta Barr who joined the Value team in 2017 and in 2020, became Head of Value ESG. Alongside this the team also has frequent interactions with the wider Schroder ESG team, as well as access to information gained from external data sources.

We would note here that this analysis is used to give as broad a perspective as possible of a company and, unless something is considered significantly damaging to the business model or the company's ability to recover in the short term, it would not prevent the managers from investment if they felt the opportunity was too compelling to ignore. All engagement is conducted at a group level.

 
 
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Schroder Income Fund Class Z Income GBP
 
 

Risk Summary

This is an equity based fund typically investing in UK listed companies. The fund is exposed to moves in the UK stock market, which can exhibit significant volatility. The managers are looking to generate a high dividend income, primarily from UK listed equities, that is expected to grow over time. The level of distributions are dependent upon market conditions and the amount of income can fluctuate. Furthermore, the underlying investment process seeks to invest in companies that are out of favour with the market and therefore this approach can bring higher levels of risk when compared to the FTSE All Share index and a number of peers. As these companies have the potential to produce high returns over time, this strategy may be better suited to investors with a longer time investment horizon.

 

Additional Information

15.08%
13.19%
-11.58%
16.21%
-10.06%
1.04
0.99

(3 years data to last month end unless otherwise stated)

Qualitative Risk Assessment

Significant Potentially Significant Not Significant

For the full summary of the risks, click here
 
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Schroder Income Fund Class Z Income GBP
 
 
 

Calendar Year Performance To Quarter End

Period Fund (%) Sector (%)
2025 27.3 18.4
2024 13.6 8.7
2023 11.2 7.0
2022 1.4 -2.0
2021 29.5 18.4

Source: Square Mile and LSEG Lipper (all rights reserved), Data as at: 30th March 2026

Value for Money

The fund's total cost of investment (TCI) is higher than the peer group median. However, we feel this has been somewhat justified by the performance of the strategy, given it is ahead of its reference benchmark over three and five years. In addition, we feel that the stragey is underpinned by a high quality investment team and given the nature of this strategy we feel that it is appropriately priced. Therefore we feel the strategy represents good value for money.

OCF v Peer Group

0.89%
Transaction Costs v Peer Group

0.16%
TCI v Peer Group

1.05%

Source: Square Mile and LSEG Lipper (all rights reserved), Data as at: 31st January 2026.
 
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Schroder Income Fund Class Z Income GBP
 
 

Rating Changes

The Square Mile ratings are reviewed every 6 months. For full details on the methodologies, click here.
For a full list of all Square Mile rated funds, click here.

Rating Changes over last 12 months Time & Date rating changed
 

Disclaimer

This document is issued by Square Mile Investment Consulting and Research Limited which is registered in England and Wales (08791142) and is a wholly owned subsidiary of Titan Wealth Holdings Limited (Registered Address: 101 Wigmore Street, London, W1U 1QU).

Unless otherwise agreed by Square Mile, this factsheet is only for internal use by the permitted recipients and shall not be published or be provided to any third parties. This factsheet is for the use of professional advisers and other regulated firms only and should not be relied upon by any other persons. It is published by, and remains the copyright of, Square Mile Investment Consulting and Research Ltd (“SM”). SM makes no warranties or representations regarding the accuracy or completeness of the information contained herein. This information represents the views and forecasts of SM at the date of issue but may be subject to change without reference or notification to you. SM does not offer investment advice or make recommendations regarding investments and nothing in this factsheet shall be deemed to constitute financial or investment advice in any way and shall not constitute a regulated activity for the purposes of the Financial Services and Markets Act 2000. This factsheet shall not constitute or be deemed to constitute an invitation or inducement to any person to engage in investment activity. Should you undertake any investment activity based on information contained herein, you do so entirely at your own risk and SM shall have no liability whatsoever for any loss, damage, costs or expenses incurred or suffered by you as a result. SM does not accept any responsibility for errors, inaccuracies, omissions, or any inconsistencies herein. Unless indicated, all figures are sourced by LSEG Lipper (all rights reserved). Past performance is not a guide to future returns.

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