Schroder ISF* Global Credit Income

An unconstrained approach to a vast global opportunity

For income seekers, the global corporate bond opportunity is huge. And, for those concerned about rising interest rates and inflation, credit can provide a better cushion than some of the more interest-rate-sensitive asset classes like government bonds. Schroder ISF Global Credit Income, Schroders’ flagship unconstrained global credit fund invests flexibly across regions and rating categories, aiming to deliver attractive income while also looking to mitigate the risks of capital loss

*Schroder International Selection Fund is referred to as Schroder ISF.

Why invest?

Themes-driven research

We identify broad investment themes that we believe will shape returns ‒ like the end of diesel, income inequality, migration or the rise of e-commerce. Credit analysts across all sectors then try to predict which companies in their coverage are potential winners and losers from these trends. This approach can uncover the less-obvious second- and third-order effects and highlight early-stage opportunities and risks.

Harnessing the “best of Schroders”

There are both top-down and bottom-up elements to the Schroder ISF Global Credit Income strategy. The lead portfolio managers decide the asset allocation among credit sectors and regions. Then, within each sector sleeve, bottom-up credit selection is delegated to Schroders’ investment-grade and high-yield experts on the ground across our global fixed income platform, in both developed and emerging markets.

Experience and scale

With a global platform of 40+ credit analysts, Schroders specializes in intensive bottom-up credit research and security selection. And, with more than 50 years of experience running fixed income portfolios, we have built up a strong track record of making our clients’ money work harder for them ‒ across all phases of the market cycle.

Meet the Fund Manager

Julien Houdain

Head of Credit, Europe

Find out more about Schroder ISF Global Credit Income

For more information including literature and performance data, visit our fund centre.

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Risk considerations

ABS and MBS risk: The fund may invest in mortgage or asset-backed securities. The underlying borrowers of these securities may not be able to pay back the full amount that they owe, which may result in losses to the fund.

Contingent convertible bonds: The fund may invest in contingent convertible bonds. If the financial strength of the issuer of a contingent convertible bond falls in a prescribed way, the value of the bond may fall significantly and, in the worst case, may result in losses to the fund.

Counterparty risk: The fund may have contractual agreements with counterparties. If a counterparty is unable to fulfil their obligations, the sum that they owe to the fund may be lost in part or in whole.

Credit risk: A decline in the financial health of an issuer could cause the value of its bonds to fall or become worthless.

Currency risk: The fund may lose value as a result of movements in foreign exchange rates.

Derivatives risk: Derivatives may be used to manage the fund efficiently. The fund may also materially invest in derivatives including using short selling and leverage techniques with the aim of making a return. A derivative may not perform as expected, may create losses greater than the cost of the derivative and may result in losses to the fund.

Emerging markets & frontier risk: Emerging markets, and especially frontier markets, generally carry greater political, legal, counterparty, operational and liquidity risk than developed markets.

High yield bond risk: High yield bonds (normally lower rated or unrated) generally carry greater market, credit and liquidity risk.

IBOR risk: The transition of the financial markets away from the use of interbank offered rates (IBORs) to alternative reference rates may impact the valuation of certain holdings and disrupt liquidity in certain instruments. This may impact the investment performance of the fund.

Interest rate risk: The fund may lose value as a direct result of interest rate changes.

Liquidity risk: In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares.

Market risk: The value of investments can go up and down and an investor may not get back the amount initially invested.

Operational risk: Operational processes, including those related to the safekeeping of assets, may fail. This may result in losses to the fund.

Performance risk: Investment objectives express an intended result but there is no guarantee that such a result will be achieved. Depending on market conditions and the macro economic environment, investment objectives may become more difficult to achieve.

Sustainability risk: The fund has environmental and/or social characteristics. This means it may have limited exposure to some companies, industries or sectors and may forego certain investment opportunities, or dispose of certain holdings, that do not align with its sustainability criteria chosen by the investment manager. The fund may invest in companies that do not reflect the beliefs and values of any particular investor.