Schroder ISF* Global Sustainable ValueSeeking ESG leaders offering better value for responsible investors
The value opportunity
Global equity investors are increasing their exposure to sustainable strategies, but there are currently far more growth and core funds available in the sustainable sector than value funds. The growth style has enjoyed an unusually long period of dominance for more than a decade, but history suggests that value strategies have an important role to play in portfolios. We believe that the combination of value and sustainability offers an attractive way to meet clients’ need for style diversification.
*Schroder International Selection Fund is referred to as Schroder ISF.
Why invest in a global sustainable value fund?
Exploiting attractive valuations
Active value investing seeks to unearth opportunities of many kinds, including temporarily “unloved” stocks and early-stage turnaround stories. Identifying pricing anomalies, together with the catalysts that will cause the market to re-rate an undervalued company, makes Value a true stock-picker’s market. As the sustainable investment market is biased towards growth, this strategy offers clear style diversification.
Focus on ESG leaders
By our definition, environmental, social and governance leaders are those that score highly on both absolute and relative measures. They have a net positive social impact on society and the environment, and are also best-in-class versus peers in their industry.
What makes a successful value investing process?
The Global Sustainable Value strategy offers the Schroder Global Value team’s tried and tested value approach with investment in companies that we believe will improve their sustainability practices and have an industry leading sustainability profile. We only invest in companies which we believe to be undervalued and who are actively improving their sustainability credentials. Our “triple lens” assessment applies in-house models, data from external providers and fundamental analysis to a proprietary universe of global stocks that meet our criteria.
Systematic active engagement
We engage with every company in the portfolio to improve ESG outcomes over time, focusing on three main areas: their business practices; their operations (for example audit of supply chains); and the social and environmental impact of their products and services.
"Our unique approach proves that you can invest in true ESG Leaders without sacrificing valuation. Sustainability and Value are a compelling combination and investors really can have the best of both worlds. We also benefit from first mover advantage. There are very few competitors and if clients want sustainability and value - Schroders is in a position to deliver.”
Head of Value ESG and Fund Manager, Equity Value
What are the risks?
- Concentration risk: The fund may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the fund, both up or down.
- Currency risk: The portfolio may lose value as a result of movements in foreign exchange rates.
- Derivatives risk: Derivatives, which are financial instruments deriving their value from an underlying asset, may be used to manage the portfolio efficiently. 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.
- Stock connect risk: The fund may be investing in China "A" shares via the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect which may involve clearing and settlement, regulatory, operational and counterparty risks.
- Higher volatility risk: The price of this fund may be volatile as it may take higher risks in search of higher rewards, meaning the price may go up and down to a greater extent.
- IBOR: The transition of the financial markets away from the use of interbank offered rates (IBORs) to alternative reference interest rates may impact the valuation of certain holdings and disrupt liquidity in certain instruments. This may impact the investment performance of the fund.
- 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, meaning investors may not be able to have immediate access to their holdings.
- 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.
Marketing material for professional clients only.
This webpage does not constitute an offer to anyone, or a solicitation by anyone, to subscribe for shares of Schroder International Selection Fund (the “Company”). Nothing on this webpage should be construed as advice and is therefore not a recommendation to buy or sell shares. An investment in the Company entails risks, which are fully described in the prospectus.
Subscriptions for shares of the Company can only be made on the basis of its latest Key Investor Information Document and prospectus, together with the latest audited annual report (and subsequent unaudited semi-annual report, if published), copies of which can be obtained, free of charge, from Schroder Investment Management (Europe) S.A. For Luxembourg, these documents may be obtained in English, free of charge, from the following link: www.eifs.lu/schroders.
Schroders may decide to cease the distribution of any fund(s) in any EEA country at any time but we will publish our intention to do so on our website, in line with applicable regulatory requirements.
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”). For information on sustainability-related aspects of this fund please go to www.schroders.com. Any reference to sectors/countries/stocks/securities are for illustrative purposes only and not a recommendation to buy or sell any financial instrument/securities or adopt any investment strategy.
Past Performance is not a guide to future performance and may not be repeated.
The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise.
Schroders has expressed its own views and opinions in this document and these may change.
A summary of investor rights may be obtained from https://www.schroders.com/en/lu/private-investor/footer/complaints-handling/
For your security, communications may be recorded or monitored.
Issued by Schroder Investment Management (Europe) S.A., 5, rue Höhenhof, L-1736 Senningerberg, Luxembourg. Registration No B 37.799.