Schroders is today announcing the UK launch of the Schroder Emerging Markets Value fund, designed to capitalise on growing UK client demand for exposure to the long-term growth potential of emerging markets.
The strategy was first launched by Schroders in September 2020 as part of its SISF[1] range. It has now been made available to UK investors. The fund is run in a contrarian way, supported by its fundamental deep-value investment philosophy and long-term investment horizon. Its process follows a strict valuation discipline which only invests in assets the managers believe are sufficiently undervalued.
The fund, which has an unconstrained, bottom-up stock picking approach, currently invests in 41 holdings across 10 sectors in 17 countries, including China, Mexico, Nigeria, and Brazil amongst others. It aims to deliver the best risk adjusted returns against its MSCI Emerging Markets benchmark.
Since launch, this successful investment philosophy has delivered a +16.7% per annum relative return against this benchmark, while absolute returns have compounded at +18.2% annualised.[2]
Vera German, Fund Manager of the Schroder Emerging Market Fund, said:
“Over the past 20 years, value investing has proven itself to be an extremely strong returning style in emerging markets[3]. Following demand from our UK-based clients to access this strategy, we are delighted to be announcing the launch of an onshore vehicle, which will provide UK investors with an opportunity to access a highly successful platform.
“What really differentiates our strategy from most other investors approaching emerging markets is that, whereas most of our peers are top-down macro driven, trying to get the country macro right and then doing the stock picking in those countries, we are bottom-up investors going first to where value has been identified and building our portfolios one stock at a time.”
Juan Torres, Fund Manager of the Schroder Emerging Market Fund, said:
“Vera and I have more than a combined 30 years of investment experience and having both grown up in emerging markets, we are able to bring an authentic bottom-up stock picking approach that has so far seen us deliver impressive performance. We believe that our flexible all-cap approach, in comparison to a number of peers that have a structural large-cap bias, has allowed us to deliver a concentrated high conviction portfolio that, first and foremost, offers clients exposure to unrivalled value opportunities.”
The Schroders Value Team manages $13bn assets[4] in a contrarian, low turnover and pure value style.
For further information, please contact:
Andy Pearce, Head of Media Relations +44 20 7658 2203 Andy.Pearce@Schroders.com
Justine Crestois, PR Executive +44 20 7658 5186 Justine.Crestois@Schroders,com
Note to Editors
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Schroder ISF Emerging Markets Value performance:
Periods to 31 May 2024
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. Performance data does not take into account any commissions and costs, if any, charged when units or shares of any fund, as applicable, are issued and redeemed.
Specific Fund Risk Factors:
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.
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 fund may lose value as a result of movements in foreign exchange rates, otherwise known as currency 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. Emerging Markets & frontier risk: Emerging markets, and especially frontier markets, generally carry greater political, legal, counterparty, operational and liquidity risk than developed markets.
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.
Liquidity risk: The fund invests in illiquid instruments which are harder to sell. Illiquidity increases the risks that the fund will be unable to sell its holdings in a timely manner in order to meet its financial obligations at a given point in time. It may also mean that there could be delays in investing committed capital into the asset class.
Operational risk: Operational processes, including those related to the safekeeping of assets, may fail. This may result in losses to the fund.
Concentrated Portfolio Risk: This Fund invests in a smaller than usual number of stocks and can invest heavily in specific types of companies, sectors or regions. A fund which invests in a smaller number of stocks may fluctuate more in value than a fund that invests in a larger number of stocks as the portfolio is more concentrated and less diversified. Stock selection will drive portfolio.
Schroders plc
Schroders is a global investment management firm with £750.6 billion (€866.2 billion; $956.9 billion) assets under management, as at 31 December 2023. Schroders continues to deliver strong financial results in ever challenging market conditions, with a market capitalisation of circa £7 billion and over 6,400 employees across 38 locations. Established in 1804, the founding family remains a core shareholder, holding approximately 44% of Schroders’ shares.
Schroders has benefited from a diverse business model by geography, asset class and client type. It offers innovative products and solutions across four core growing business areas; asset management, solutions, Schroders Capital (private markets) and wealth management. Clients include insurance companies, pension schemes, sovereign wealth funds, high net worth individuals and foundations. Schroders also manages assets for end clients as part of its relationships with distributors, financial advisers and online platforms.
Schroders aims to provide excellent investment performance to clients through active management. It also channels capital into sustainable and durable businesses to accelerate positive change in the world. Schroders’ business philosophy is based on the belief that if we deliver for clients, we will deliver for our shareholders and other stakeholders.
Issued by Schroder Investment Management Limited. Registration No 1893220 England. Authorised and regulated by the Financial Conduct Authority. For regular updates by e-mail please register online at www.schroders.com for our alerting service.
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[1] Schroder International Selection Fund. Available in Austria, Belgium, Bermuda, Bulgaria, Denmark, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Spain, Sweden, Switzerland and United Kingdom.
[2] Source: Morningstar. Performance is based on ‘I’ class shares, bid to bid, net of fees. The fund's performance should be assessed against its target benchmark being to exceed the MSCI EM (Net TR) index and compared against the MSCI EM Value (Net TR) index and the Morningstar Global Emerging Markets Equity sector. *Fund launch date: 30 September 2020.
The figures refer to the past and that past performance is not a reliable indicator of future results. Returns are in the funds base currency, USD. For GBP investors, the return may increase or decrease as a result of currency fluctuations.
[3] Societe Generale, total returns in local currency, rebased to 100 as at 29 December 2000 – 30 January 2023.
[4] Schroders, Value Team AUM as at 31st December 2023.