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Fund Rationale: Schroder International Selection Fund Global Sustainable Growth Fund

Schroders Int’l Selection Fund Global Sustainable Growth
SGD Retail Class F Accumulation Shares (ISIN: LU2158556196)
Fund Manager Page

Introductory information
The Schroder International Selection Fund (“ISF”) Global Sustainable Growth Fund (“the Fund”) aims to provide capital growth by investing in equity and equity related securities of companies worldwide which meets the Investment Manager’s sustainability criteria. The Fund is a Sub-Fund of Schroder International Selection Fund, and is suitable for investors who seek capital growth, and understand the risks associated with investing in equity and equity related securities worldwide.

The inception date of the oldest share class of the Fund is 23 November 2010, while the SGD Class F Accumulation Shares were incepted on 4 June 2020.  As of September 2020, the Fund managed a total asset of SGD 894m.

 

Characteristics
The Fund invests at least two-thirds of its assets in equity and equity related securities of companies worldwide. As the Fund is index-unconstrained it is managed without reference to an index.

The Investment Manager believes that companies demonstrating positive sustainability characteristics, such as managing the business for the long-term, recognising its responsibilities to its customers, employees and suppliers, and respecting the environment, are better-placed to maintain their growth and returns over the long term. In addition, the Investment Manager believes that when aligned with other drivers of growth, this can result in stronger earnings growth which is often under-appreciated by the market.

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 44.5% in equities from China, 15.4% from Hong Kong, and others including Taiwan, South Korea, India, the Philippines, and Singapore. Its top 5 sector exposure includes consumer discretionary, IT, financials, communication services, and industrials, each ranging from an allocation of 6.0% to 25.3%.

 

Background information and cost
The Fund has an underlying fund management fee of 130bps per annum (1.30 p.a.) and total expense ratio (“TER”) of 153bps per annum (1.53% p.a.). Endowus have 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 65bps (0.65% p.a) and a net TER of 88bps (0.88% p.a.). Endowus do not charge a preliminary sales charge or any other fees, other than the all-in advice fee. 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 – Broadly Diversified.”

 

Selection criteria for Endowus
Endowus have selected the Schroder ISF Global Sustainable Growth Fund as it is one of the best Funds among the sustainability fund universe globally and in Singapore, offering a return of 86.6% since inception in June, far outweighing the sector average of 48.6%. Managers Katherine Davidson and Charles Somers, who have been managing the fund for almost 10 years, also possess a proven track record of minimising volatility (15.8% in the last 3 years, as compared to the peer average of 16.7%) in the concentrated pool of 39 holdings as of August 2020.

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.