Morningstar has downgraded the £2.5bn Schroder ISF US Small & Mid Cap Equity fund and £349.5m ISF US Smaller Companies fund from silver to bronze.
“The fund’s fees are high and represent a structural disadvantage compared with peers,” said Lena Tsymbaluk, analyst at Morningstar, on updates on both products.
The fund’s ongoing charge for the clean share class C is 1.30% on both funds compared with the median of 0.85%, Morningstar said.
A Schroders spokesperson said the asset manager is currently reviewing the fees on both Jones’ (pictured) funds.
Architas investment director Adrian Lowcock said fees on the ISF (International Selection Fund) funds are high and act as a drag on performance.
Succession planning
Tsymbaluk described Jones as a seasoned investor. She noted Robert Kaynor was appointed co-manager on both funds as part of Schroders’ long-term succession planning.
“While there is some uncertainty in terms of how much influence Kaynor is going to have on portfolios as comanager, it is unlikely there will be a wholesale change. We also draw comfort from Jones still being actively involved with the strategy, and our qualitative assessment doesn’t currently raise any red flags,” she said.
Lowcock said Jones has been able to deliver some periods of strong performance over her tenure. She has managed the ISF US Smaller Companies fund since 2002 and the ISF US Small & Mid Cap Equity fund since 2004.
Performance on Schroder ISF US Small & Mid Cap Equity and US Smaller Companies
| 1yr | 3yr | 5yr | 10yr | |
| Schroder ISF US Small & Mid Cap Equity | 3.85 | 49.84 | 108.64 | 242.67 |
| Schroder ISF US Smaller Companies | 6.87 | 51.41 | 101.43 | 236.59 |
| Russell 2000 | 13.52 | 59.25 | 112.73 | 293.08 |
| Russell 2500 | 13.06 | 55.81 | 111.89 | 297.39 |
