QEP Global ESG*

QEP Global ESG aims to outperform the MSCI AC World Index (NDR) by 3% p.a. gross of fees over a full market cycle.1 In addition, the strategy aims to build portfolios that are positively exposed to stocks that perform well on ESG2 measures and avoid those that do not meet our minimum acceptable standards. Through engagement we also aim to encourage good practice from companies in terms of their environmental and social impact, as well as strong corporate governance.

¹There can be no guarantee that any investment objectives or outcomes will be achieved. 
²Environmental, Social and Governance is referred to as ESG throughout the website.

The strategy is active in all areas of ESG.  We incorporate environmental, social and governance considerations into the investment process in four principal ways:

1. Exclusions.  We implement both industry-specific and revenue-based exclusions of ‘sin’ stocks defined as tobacco, alcohol, armaments and gambling stocks.
2. Integration.  ESG considerations are incorporated into our fundamental analysis of companies; we allocate more capital to stocks with good ESG characteristics and penalize those which are poor.
3. Ongoing research.  We analyze key ESG themes to look for opportunities to integrate these insights into our process.
4. Engagement.  Working in partnership with Schroders’ Sustainable Investment team, we carry out an active program of company engagement.

In addition to the ESG aspects of the strategy, stock selection is grounded in the analysis of company fundamentals indicating Value and Quality.  The advantage of investing in both Value and Quality is that, while both tend to outperform over time, they deliver their returns at different stages of the economic cycle, creating the potential for outperformance across a broad range of market environments.

We believe that intelligent portfolio construction can greatly enhance the ability to generate repeatable long-run returns. We reduce stock specific risk by building a highly diversified portfolio, but with conviction in every single stock. Recognizing the limitations of market cap-weighted indices, we take an index-unconstrained approach which enables us to invest wherever we find the best Value or Quality opportunities and to capitalize upon those which may be missed by other managers, including those at the lower end of the market cap spectrum and across emerging markets.

*QEP Global ESG is also available in Fossil Fuel Free.

• Separate Accounts

To find out more about this strategy, email our team at canada@schroders.com.

*The strategies listed include those which may be subject to the ability to meet investment minimums and other specific criteria, and may not be directly available to U.S. investors.

Investment risks: All investments, domestic and foreign, involve risks including the risk of possible loss of principal. The market value of the portfolio may decline as a result of a number of factors, including adverse economic and market conditions, prospects of stocks in the portfolio, changing interest rates, and real or perceived adverse competitive industry conditions. Investing overseas involves special risks including among others, risks related to political or economic instability, foreign currency (such as exchange, valuation, and fluctuation) risk, market entry or exit restrictions, illiquidity and taxation. Emerging markets pose greater risks than investments in developed markets.

There can be no guarantee these strategies will be successful or that the investment objective can be achieved.