About the fund
Schroders Global Cities Real Estate invests in property companies that are listed on recognised exchanges around the world. This means the underlying properties are securitised, so clients have a partial stake in the underlying assets rather than having to own direct.
The Schroders Global Cities approach is unique. This is because the team invests by first understanding where a company owns real estate.
Their philosophy is that the rents of a company should increase faster the closer to the point of consumption the properties are. This means they have pricing power.
This means, the larger and wealthier a population in a city is, the more rent a property owner can charge. This, in the long-term, should be beneficial to an investor.
What does the fund aim to do?
The fund aims to offer income and capital growth by investing in shares of real estate companies worldwide
The potential return on the investment is part of the profit made from renting out these buildings.However, the return is not guaranteed. The value of these companies can fall as well as rise and capital is at risk.
What are the risks?
- When considering fund performance, past performance should not be used as a guide to the future
- This investment could fall as well as rise in value and your money is at risk
- This fund invests in a smaller number of real estate companies. A smaller number can be riskier than an equivalent fund that spreads the risk across a higher number of companies. This also applies to funds that focus on specific industries compared with those that spread over a number of different industries
- The fund invests globally, so changes in foreign exchange rates could have a negative impact on performance
- Investments in smaller companies can be less liquid than investments in larger companies and price swings may therefore be greater than in larger company funds
- The share prices of companies can be impacted by many factors, including the state of the company, the industry and the economy
- In difficult market conditions, the fund may not be able to sell off stocks, which could affect performance and cause the fund to defer or suspend redemptions of its shares. Failures at service providers could lead to disruptions of fund operations or losses
- The fund uses financial tools called derivatives. A derivative may not perform as expected and could create losses greater than the cost of the derivative. If its counterparty becomes unable to honour its commitments, it could create a loss. When used for leverage, derivatives may cause above-average volatility and risk of loss
- The way in which this fund invests is likely to differ significantly from the broader market index, which for the purpose of comparisons should only be used as a reference.