Application of valuation principles – March and April 2020

Schroder International Selection Fund range
Schroder Special Situation Fund range

We experienced a period of severe market volatility between mid-March and early-April 2020 due to the Covid-19 pandemic. This resulted in a need to consider how we appropriately valued securities across some asset classes.

To ensure Schroders was treating investors in our fund ranges fairly, we applied our relevant valuation principles to deal with this volatility.  This meant that a daily adjustment was made - in appropriate cases - so that securities held within some of our funds were valued at a price that we believed was achievable in the market.

This decision was taken to protect the interests of investors in our funds and for the fair treatment of both continuing and redeeming investors.

These principles may have been applied in conjunction with a dilution adjustment, which is an adjustment to the fund’s published net asset value per share to counter the impact of dealing and other costs.

A combination of these adjustments resulted in some funds’ daily net asset values being adjusted by up to 5%, depending on the fund’s holdings and the prevailing market conditions at the time in terms of dealing spreads, costs and trading conditions.

hese adjustments did not reflect the underlying performance of the funds. They were a result of the impact of the extraordinary market circumstances at the time. We continually monitor the situation and now that market volatility has returned to normalised levels, we have reverted to our usual pricing methodologies for underlying securities held by the fund.

For further information with respect to a particular fund, please contact your usual Schroders representative.