The Schroders Global Cities approach is unique. This is because the team invests by first understanding where a company owns real estate. Their philosophy is that the rents of a company should increase faster the closer to the point of consumption the properties are. This means they have pricing power. This means, the larger and wealthier a population in a city is, the more rent a property owner can charge. This, in the long-term, should be beneficial to an investor.
Real estate companies are listed on stock exchanges, meaning they’re tradeable securities – a partial share in the underlying properties.
Owning property directly has limitations:
And while the shares of real estate companies can move up and down on a day-to-day basis, their returns look similar to directly-invested real estate over the long-term.
Going global can help provide diversification away from owning only property in one country.
Risk is spread across a number of properties and companies, rather than relying on the success of one or two. Global Cities’ investments rely on identifying the best operators in locations where the economic demand is greatest. This results in higher rents, the bedrock of real estate investing.
The team believes these cities are the real estate ‘winners’ of tomorrow as they could be home to the most in-demand real estate.
Data is at the heart of the index and the team use data to give them an active edge.
This approach is unique in listed real estate investing and is the foundation of the Global Cities' approach.
The team has a database and can identify the location of all the assets held in the portfolio. This means each company held has a Global Cities score: the higher the score the more likely a company is to be in the portfolio.
Urbanisation will, in the team’s view, be one of the most important investment themes of the next 10 years. Global Cities sits at the centre of this theme.
Economic activity is centred in cities. Picking the cities that will gain greater share of the global economy will underpin the demand for the assets the team invests in. This long-term approach is crucial when investing in Global Cities.
The scale and diversity of the strongest Global Cities, means the team can invest in different real estate sectors, such as data centres, self-storage and manufactured homes. This is in addition to the more conventional real estate sectors such as offices, retail and industrial.
Choice means the team can gain exposure to pockets of demand both in a sub-sector and a city, without incurring the challenge of liquidity and transaction costs of a direct real estate fund.
Co-Head of Global Real Estate Securities
Co-head of Global Real Estate Securities
The fund aims to provide income and capital growth by investing in equities of real estate companies worldwide.
At least 80% of the fund will be invested in equities of real estate companies worldwide. The fund seeks exposure to cities that we believe will exhibit continued economic growth, supported by a number factors such as strong infrastructure and supportive planning regimes.The fund is not designed to have a bias to any particular country or size of company.The fund may also invest in collective investment schemes that invest in equities of real estate companies, warrants and money market instruments, and may hold cash. Derivatives may be used to seek to achieve investment gains, to reduce risk and to manage the fund more efficiently
*Schroder International Selection Fund will be referred to as Schroder ISF throughout this website
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 performance is calculated for the portfolio. The individual investor performance may differ as a result of initial fees, the actual investment date, the date of reinvestment and dividend withholding tax. All fund performance data are on a NAV to NAV basis, net income reinvested and net of ongoing charges and transaction costs. Data is not available for the time periods with no % growth stated. In case a share class is created after the fund's launch date, a simulated past performance is used, based upon the performance of an existing share class within the fund, taking into account the difference in the ongoing charges and the portfolio transaction costs, and including the impact of any performance fees if applicable.
Annualised return is the weighted average compound growth rate over the period measured.