Schroder ISF* Sustainable EURO Credit

Dynamic management of sustainable corporate bonds

More and more investors are convinced that the long-term performance of an investment, including corporate bonds, is closely linked to the sustainability performance of the issuer. Dynamically aligned investment strategies make it possible to sensibly combine return and sustainability. Schroder ISF Sustainable EURO Credit aims to outperform the ICE BofA Merrill Lynch Euro Corporate Index over a three to five year period by investing in bonds issued by companies that have either a strong sustainability profile or a credible transition.

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

Why sustainable corporate bonds?

1. Revaluation

The bond markets have re-set and are now offering extremely attractive yields. Strong corporate fundamentals with solid interest coverage ratios and low refinancing risks also point to a flat default cycle.

2. Our strategy

The long-term performance of an investment is increasingly determined by the sustainability of the issuer - this also applies to corporate bonds. Our strategy combines a unique approach to sustainability with over 20 years of experience across the fund management team. Schroders acts as an active investor, maintaining regular dialogue with companies to encourage their sustainability transformation.

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Sustainability as a selection principle

A multi-stage selection process ensures that sustainability is implemented in the fund. Companies whose business models are incompatible with key ESG criteria are excluded. This is followed by a comprehensive ESG assessment of the portfolio candidates based on in-house research and external analysis.

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Dynamic investment approach

The fund mainly invests in euro-denominated corporate bonds; in addition, non-euro-denominated or high-yield bonds, green bonds and derivatives can be included. All of these options enable the management to act flexibly and exploit various sources of return.

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Active Engagement

To support the transition towards sustainability, the fund also invests in companies that are on a credible path towards greater sustainability. We actively engage with companies about steps they need to take to improve their sustainability profiles

Find out more about Schroder ISF Sustainable EURO Credit

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

"Sustainable credit primarily includes 'green bonds' and social bonds, which fund a range of projects from access to education to affordable transportation to protecting the food supply. In addition, there are sustainability bonds where the issuer has made an explicit commitment to future improvements in sustainability outcomes within a set time frame.”

Saida Eggerstedt

Head of Sustainable Credit

Investing in credit with Schroders

In global corporate bond markets, there’s a constant race for information. The winners are those who spot the key trends early and uncover opportunities that are overlooked by their competitors.