Schroder ISF* Global Alternative Energy
Not just an opportunity - but a necessitySISF Global Energy Transition shareholder letter - Change of Name
Our approach
Schroder ISF* Global Alternative Energy provides focused thematic exposure to the low-carbon energy transition. It seeks opportunities in multiple investable markets across key value chains, including renewable power and energy storage. It is an actively managed global equity fund, 100% free from fossil fuels and nuclear, that aims to deliver long-term capital growth by investing in the best-in-class companies driving the transition to a low-carbon economy.
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Why Invest?
Alpha Equity
The impacts of climate change have been well documented. The transition to clean energy will play a vital role in addressing the challenges posed by climate change and will result in widespread change to how we produce, distribute and consume energy.
Sustainability
This change will require $120 trillion of investment across the value chain by 2050 if we are to achieve our climate targets. Such mammoth investment will create significant opportunities for companies to generate strong real earnings growth, translating into more value for shareholders and sizable opportunities for investors.
Why Invest Now?
Three key factors are now working in unison that will help companies involved in the energy transition generate significant long-term earnings growth, resulting in a powerful investment environment:
- Environmental concerns and policy support: Current policies are tackling climate change but we expect these to be enhanced in the coming years, leading to higher rates of investment into the energy transition space.
- Renewable energy is now cost-competitive: From a purely economic perspective, renewable energy makes the most sense as it is now cheaper than traditional fuel sources like gas and coal.
- Increased consumer demand: There is strong consumer demand for technologies that use renewable energy. Electrical vehicles, solar-powered homes and self-administering energy storage are just some examples of areas that are rapidly growing.
Investment Approach
Unconstrained approach that transects traditional sector classifications, style biases, geographies and market capitalisations.
Use of an investment process established since 2005 and designed specifically for active investment management in resource equities.
Focus on finding long-term, sustainable earnings and cash flow growth at a reasonable value.
Highly active allocation that creates opportunities to generate excess returns above passively-managed alternatives.
Long-only, no leverage, no complicated derivatives.
Risk controlled through liquidity limits, the 5/10/40 concentration rule and use of cash.
Role in Portfolios
As a long-term, sustainable growth play that takes advantage of structural earnings growth over multiple business cycles.
As a source of equity diversification due to the agnostic approach taken to geographies, style biases and traditional sectors.
As a thematic investment, able to circumvent issues such as political and monetary policy challenges and tap into the growth sectors of the future.
Meet the Managers
Schroder ISF* Global Alternative Energy is managed by Head of Thematic Equities, Mark Lacey, and fund managers, Alex Monk and Felix Odey.
Risk considerations
*Schroder International Selection Fund is referred to as Schroder ISF.
- 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.
- 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.
- Currency risk: If the fund’s investments are denominated in currencies different to the fund’s base currency, the fund may lose value as a result of movements in foreign exchange rates, otherwise known as currency rates. If the investor holds a share class in a different currency to the base currency of the fund, investors may be exposed to losses as a result of movements in currency rates.
- Currency risk / hedged share class: The currency hedging of the share class may not be fully effective and residual currency exposure may remain. The cost associated with hedging may impact performance and potential gains may be more limited than for unhedged share classes.
- 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.
- 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 the objective of sustainable investment. 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.
Important information:
For professional investors and advisers only. The material is not suitable for retail clients. We define "Professional Investors" as those who have the appropriate expertise and knowledge e.g. asset managers, distributors and financial intermediaries.This document does not constitute an offer to anyone, or a solicitation by anyone, to subscribe for shares of Schroder International Selection Fund (the “Company”). Nothing in this document 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 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.
Disclosures and Risk Factors
Collective investment schemes are generally medium to long-term investments.
The value of participatory interests or the investment may go down as well as up.
Past performance is not necessarily a guide to future performance.
Collective investment schemes are traded at ruling prices and can engage in borrowing and scrip lending.
A schedule of fees and charges and maximum commissions is available on request from the manager.
The manager does not provide any guarantee either with respect to the capital or the return of a portfolio.
The manager has a right to close the portfolio to new investors in order to manage it more efficiently in accordance with its mandate.
Issued in March 2025 by Schroders Investment Management Ltd registration number: 01893220 (Incorporated in England and Wales) is authorised and regulated in the UK by the Financial Conduct Authority and an authorised financial services provider in South Africa FSP No: 48998.
This is a Section 65 approved fund under the Collective Investment Schemes Control Act 45, 2002 (CISCA). Boutique Collective Investments (RF) (Pty) Ltd is the South African Representative Office for this fund. Boutique Collective Investments (RF) (Pty) Ltd is registered and approved under the Collective Investment Schemes Control Act (No.45 of 2002).