Schroder ISF Sustainable Euro Credit

The fund aims to provide capital growth and income in excess of the ICE BofA Euro Corporate Index after fees have been deducted over a three to five year period by investing in bonds denominated in Euro issued by companies worldwide, which meet the investment manager's sustainability criteria.

The fund has environmental and/or social characteristics within the meaning of Article 8 of Regulation (EU) 2019/2088 on Sustainability-related Disclosures in the Financial Services Sector (the “SFDR”). This means that the fund maintains a higher overall level of avoided emissions sustainability score than its sustainability benchmark based on the investment manager’s rating system.

ESG Integration
ESG is fully integrated into analysis, bond selection and portfolio construction.

Portfolio Over-/Underweighting
The Fund underweight companies that are rated in the D bucket (based on our internal ESG assessment of each issuers). Lower ESG rated names by MSCI are underweight. By tilting the portfolio to lower carbon intensity as well as higher ESG improvers, the portfolio aims to be sustainable.

Normative screening

The Fund Managers shall verify whether investee companies are not involved in controversies and violations.

Exclusion
Companies involved in harmful activities that could lead to adverse impacts on sustainability factors will be excluded, the Fund excludes specifically the following sectors:

Tobacco
Weapons
Coal
Unconventional Oil & Gas
Conventional Oil & Gas
Power Generation based on fossil fuels or nuclear energy

Engagement
With engagement, the aim is to focus on positively influencing corporate behaviour, which will lead to improved performance on the topics of the engagement and on the long-term sustainable returns.

Best-in-class/universe selection

Our best-in-class approach is based on our internal ESG assessments of each issuers. Companies that are rated A+ to C are eligible. Companies that are rated D stable or declining cannot be purchased, however, companies that are rated D improving can be purchased. These companies are subject to engagement and they will be encouraged in their transition toward more sustainable business practices and less carbon emissions. The investment process pays strong attention to the absolute quality (A, B, C, D) as well as the direction of the rating (improving, stable, declining). We have a preference for improving stories and are careful with companies that show declining ESG characteristics.

Objective to outperform BM on ESG indicator

The Fund maintains a higher overall sustainability score than its sustainability benchmark based on the investment manager’s rating system.

Link to the fund documentation

SFDR Pre-Contractual Disclosures

Sustainability Related Disclosures

Additional information sustainability practices Schroder ISF Sustainable Euro Credit May 2024