Schroders continues to build-out flagship UK sustainable equity suite with latest fund additions

Schroders is today announcing its intention to add two new Unit Trusts to the firm’s growing portfolio of sustainable-focused solutions; the Schroder Sustainable UK Equity Fund and Schroder Global Sustainable Value Fund.*

This follows the launch of the two UK Unit Trusts for Schroders successful Global Sustainable Growth (GSG) and Global Energy Transition (GET) funds earlier this year. The latest additions demonstrate Schroders ongoing commitment to providing a sustainable fund range to meet the evolving needs of UK investors. 

The funds’ investment universe is determined using exclusion screens and proprietary tools, such as Schroders SustainEx, as well as fundamental investment research, in alignment with the UN Sustainable Development Goals. Based on this criteria, a list of restricted companies is produced on a quarterly basis and integrated into the investment process.

Schroder Sustainable UK Equity Fund

Following recent approval from unitholders,  the Schroder Core UK Equity Fund has been restructured to create the Schroder Sustainable UK Equity Fund. This transition, effective as of 18 May 2021, incorporated significant changes in the funds’ investment objective and investment policy to deliver a sustainability driven strategy.

The Schroder UK Sustainable Equity fund will invest in companies with sustainable business models and attractive long-term growth prospects. Over the long term, the Fund will capitalise on five key investment themes: Sustainable consumer (goods and services), Energy transition, Sustainable industries, Sustainable infrastructure and Health & wellness.

The new fund will continue to be managed by Matt Bennison, who joined the Schroders Group in 2012, and has since managed several UK equity strategies including the Schroder Prime UK funds and the Schroder UK Alpha Income Fund. Matt is supported by Schroders’ long-established Prime UK Equities team that brings over 75 years of  combined investment experience, built upon consistency of process and performance.

The fund’s aims to exceed the FTSE All Share (Gross Total Return) index, and compared against the Investment Association UK All Companies sector average return.

Schroder Global Sustainable Value Fund*

The Schroder Global Sustainable Value Fund proposes an investment strategy that will invest in undervalued ESG[1] leaders. The fund will invest in companies that are undervalued versus the market and satisfy the fund’s robust ESG criteria. To be considered for the portfolio, a company will need to demonstrate that it has a positive impact, doing more good than harm, and that it is one of the most sustainable businesses in its industry.

The Schroder Global Sustainable Value fund will be restructured from the current Schroder Responsible Value UK Equity Fund, subject to unitholder agreement. The intention is that the Schroder Global Sustainable Value’s investment universe would encompass some of the cheapest companies in the market that have the potential to outperform the benchmark over the long-term.

The fund’s investment analysis would be based on a proprietary investment check list, which incorporates sustainable challenges into each step in the process. Schroders’ has integrated Environmental, Social and Corporate Governance (ESG) factors into decision-making across all investments the firm manages, fulfilling our intention announced in November 2019. Sustainability factors are therefore, considered as important as the valuation discipline which underpins the funds investment strategy.

Schroder Global Sustainable Value will be managed by Roberta Barr, Head of ESG, Schroder Equity Value, Simon Adler and Liam Nunn, who have a combined twenty one years of investment experience between them and also manage the Schroder Global Equity Income Fund and Schroder Global Recovery Fund which has a cumulative net 5 year performance of 51.0%**, and 68.5%***, respectively.

Roberta Barr, Head of ESG, Schroder Global Sustainable Value Fund, commented:

“We firmly believe the misconception that value and sustainable investing are mutually exclusive is not true. Not only is sustainable value possible, but we can also choose to be selective in this space.

“For example, we buy in the cheapest 20% of the market, which we then apply some stringent ESG criteria along with liquidity criteria. This still leaves us with enough names to reject over 85% of the companies in this universe when building our forty to sixty stock portfolio.

“ESG factors directly impact our decision whether to buy a business or not, and a company must demonstrate that it shares our value of building sustainable futures. It is our aim to identify and buy undervalued ESG best-practice  leaders, which also offer the potential for attractive returns for our clients.”

Schroders launched its first Value fund over fifty years ago, and our investors have more than one hundred years of Value investing experience between them. Over this period, Schroders Value team has developed a differentiated and distinctive value bias which is applied across our eight Value funds.

Doug Abbott, Head of UK Intermediary, Schroders commented:

“It’s great to see our sustainable offering for UK investors continue to expand. We believe that the focus of these new strategies aligns with a growing desire among clients to allocate capital to managers that can clearly demonstrate investment in companies which adopt positive sustainability practices.

“Our sustainable equity suite provides an exciting opportunity for UK investors to access a diverse range of high-conviction portfolios which harness active engagement to improve outcomes for shareholders, but also for people and the planet.”

 -End-

Note to Editors:

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 any overseas investments to rise or fall.

* Schroder Responsible Value UK Equity Fund will be repurposed to become Schroder Global Sustainable Value Fund subject to unitholder approval. Pending unitholder approval, it will be available for investment from 24 August 2021.

 

 

** Schroder Global Equity Income Fund 

Discrete Yearly Performance

As of 30.06.2021

 

June 16 - June 17

June 17 - June 18

June 18 - June 19

June 19 – June 20

June 20 – June 21

 

Share class (Net)

 

25.6%

12.1%

0.1%

-18.2%

31.1%

 

Target

 

21.6%

9.3%

10.3%

5.9%

24.4%

 

Comparator 1

 

22.1%

3.9%

8.1%

-8.7%

23.3%

 

Comparator 2

 

19.0%

3.7%

8.8%

-2.5%

21.4%

 

 

The Fund's performance should be assessed against its target benchmark, being to exceed the MSCI World (Net Total Return) Index, and compared against the MSCI World Value (Net Total Return) Index and the Investment Association Global Equity Income sector average return. The Investment Manager invests on a discretionary basis and is not limited to investing in accordance with the composition of the benchmark.


Please note that the fund's benchmarks were changed on 31 March 2021. The past performance in the above table is based on the fund's benchmarks (Target benchmark: MSCI World (Net Total Return) Index, and compared against the Investment Association Global Equity Income sector average return) in place prior to this date. Going forward, this table will show past performance from this date based on the new benchmarks (Target benchmark: MSCI World (Net Total Return) Index, and compared against the MSCI World Value (Net Total Return) Index and the Investment Association Global Equity Income sector average return).

 

*** Schroder Global Recovery Fund

 

Discrete Yearly Performance

 

As of 30.06.2021

 

June 16 - June 17

June 17 - June 18

June 18 - June 19

June 19 – June 20

June 20 – June 21

 

Share class (Net)

 

36.9%

2.8%

5.7%

-19.4%

40.5%

 

Target

 

21.6%

9.3%

10.3%

5.9%

24.4%

 

Comparator 1

 

22.1%

3.9%

8.1%

-8.7%

23.3%

 

 

The Fund's performance should be assessed against its target benchmark, being to exceed the MSCI World (Net Total Return) index, and compared against the MSCI World Value (Net Total Return) index and the Investment Association Global sector average return. The Investment Manager invests on a discretionary basis and is not limited to investing in accordance with the composition of the benchmark.


Please note that the fund's objective and benchmarks were changed on 31 March 2021. The past performance in the above table is based on the fund's objective and benchmarks (No target benchmark. Comparator benchmarks: MSCI World (Net Total Return) Index and the Investment Association Global Equity Income sector average return) in place prior to this date. Going forward, this table will show past performance from this date based on the new objective and benchmarks (Target benchmark: MSCI World (Net Total Return) Index. Comparator benchmarks: MSCI World Value (Net Total Return) Index and the Investment Association Global sector average return).

 

[1] ESG stands for Environmental Sustainable Governance