Fund Rationale: Schroder Global Emerging Market Opportunities Fund

Schroder Global Emerging Market Opportunities Fund
SGD Retail Accumulation Shares (ISIN: SG9999006852)
Fund Manager Page

Introductory information
The Schroder Global Emerging Markets Opportunities Fund (“the Fund”) aims to provide capital growth and income by investing in equity and equity related securities of companies in emerging market countries worldwide. The Fund is benchmarked against the MSCI Emerging Market NR Index, and is suitable for investors who seek capital growth and income, and understand the risks associated with investing in emerging markets equities. The Fund is a Sub-Fund of Schroder ISF Global Emerging Market Opportunities.

The SGD Accumulation Shares are the oldest share class of the Fund, which was incepted on 7 Oct 2010. As of July 2020, the Fund managed a total asset of SGD 75.5m.

Characteristics
The Fund invests at least two-thirds of its assets in equity and equity related securities of companies in emerging market countries worldwide, and may invest up to 40% of its assets in cash and global bonds in order to protect returns when the Managers believe stock markets are expected to be particularly weak. The Fund typically holds 40-60 positions. The Fund may invest no more than 5% of its assets in China A-Shares through the Shanghai-Hong Kong Stock Connect and/or the Shenzhen-Hong Kong Stock Connect.

The Fund is managed with reference to material environmental, social and governance factors. This means issues such as climate change, environmental performance, labour standards or board composition that could impact a company’s value may be considered in the assessment of companies.

As of July 2020, the Fund holds 35.1% in equities from China, 18.0% from South Korea, and others including the Russian Federation, Brazil, Taiwan, South Africa, and Hungary. Its top 5 sector exposure includes consumer discretionary, financials, IT, communication services, and materials, each ranging from an allocation of 7.3% to 24.8%. The Fund is on the CPF Investment Scheme - List A Fund, and is included under the CPF Investment Scheme for Ordinary Account. It has been classified by the CPF Board under the risk classification of “Higher Risk – Narrowly Focused (Regional, Emerging Market).”

Background information and cost

The Fund has an underlying fund management fee of 120bps per annum (1.20% p.a.) and total expense ratio (“TER”) of 162bps per annum (1.62% p.a.). Endowus has arranged for the FMC to rebate the trailer fees which Endowus will refund 100% back to the client to achieve a lower net management fee of 84bps (0.84% p.a) and a net TER of 126bps (1.26% p.a.)*. Endowus does not charge a preliminary sales charge or any other fees, other than the all-in advice fee. 

*For Cash/SRS investors only. CPF investors receive a higher rebate from the FMC and enjoy a lower net management fee of 60bps (0.6% p.a.) and a net TER of 102bps (1.02% p.a.).

Selection criteria for Endowus
Endowus have selected the Schroder Global Emerging Markets Opportunities Fund as it provides Singaporean investors utilising the CPFIS the exposure to emerging market equities, especially securities deemed undervalued by the market. As of July 31, the Price to Book ratio of the fund is 14.2x and returned 8.4% on a five year annualised basis. In addition, the incorporation of ESG consideration differentiates the Fund from its peers.

------------------------

Updated by Endowus: 25 Sept 2020

** Disclaimer
Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Any opinions expressed reflect a judgment at the original date of publication by us and are subject to change without notice.

The prospectus, profile statement, product highlight sheet, fund factsheet or other offer or product documents may contain references about the expected risk tolerance of their target investors. These are in no way indicative of how we at Endowus have assessed your risk tolerance based on your stated objectives and financial situation. Endowus accepts no responsibility for investment decisions made in response to the expected risk tolerance levels mentioned in the product or offer documents.