Fund Rationale: Schroder ISF Global Sustainable Growth Fund

Schroder ISF Global Sustainable Growth Fund (the "Fund")
SGD Class C Accumulation Shares (ISIN: LU2289884723)
SGD Retail Class F Accumulation Shares (ISIN: LU2158556196)

Fund Manager Page

Daily Price & Charts (Class C)
Daily Price (Class F)

Endowus have selected the Fund because it has a disciplined proprietary ESG screening and analysis process, is managed by an experienced portfolio management team, and is accessible at a relatively low cost.

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Key Information

Fund Objective: Aims to provide capital growth by investing in equity and equity related securities of companies worldwide which meet the manager’s sustainability criteria.

Suitability: Investors who seek capital growth, understand the risks associated with investing in equity and equity related securities worldwide, and wish to invest in 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.

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.”

Cost (Class C, Cash/SRS):
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* Total Fund-level Fees include fund management fee of 0.65%.
** Endowus do not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Cost (Class F, CPF):
Schroder_ISF_Global_Sustainable_Growth_Fund__Class_F_CPF__Cost.png

* Total Fund-level Fees include fund management fee of 1.30%.
** Endowus do not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Fund Characteristics

Fund Inception: 23 November 2010
Share Class Inception: 11 February 2021 (Class C), 4 June 2020 (Class F)
Benchmark: MSCI All Country World Index

Fund AUM: SGD 2.0bn
Source: MorningStar as of 8 March 2021. Please refer to the FMC page for the most updated AUM.

🌱EU SFDR Rating: Article 8
Article 8 Funds promote environmental and/or social characteristics, and follow good governance practices. Please refer to “Sustainable Investing Methodology” below for more information.

Regional Allocation:

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Sector Allocation:

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Source: MorningStar as of 30 November 2020. Allocation data indicate actual exposure as a percentage of the Fund's total Net Asset Value. Please refer to the Fund Manager Page for the most updated information on Fund Holdings and Breakdown.

Selection Criteria

Endowus have selected the Schroder ISF Global Sustainable Growth Equity Fund for its proven track record, holistic ESG methodology, and low cost. The Fund was restructured from Schroder Global Demographic Fund in 2017, and since the transition, it has delivered superior risk-adjusted returns compared to its peers in the global large cap growth equity category. The Fund’s performance since 2010, despite the strategy change, is also better than its peers and is indicative of the portfolio management team’s capability as it is managed by the same team as before the transition. 

The Fund employs a disciplined investment process that integrates holistic ESG analysis. This is particularly important because there are many funds in the market that are labelled ESG but, in reality, take a superficial approach to ESG (greenwashing). The Fund’s full portfolio management team consist of an equal number of members from the equity team and from the sustainability team. Schroders define a sustainable company as a company that is managed for the long term and takes account of their impact on all stakeholders including employees, environment, supplier, customers, regulators and so on. Rather than relying on third party ESG data, the Fund uses internally developed ESG metrics complemented with the internally developed questionnaires that probe companies further on key sustainability-related issues. Only companies that pass the ESG assessment would be considered for further financial analysis. This eventually results in a high conviction portfolio of 30-50 names, and is positively tilted to growth and quality, and negatively tilted to value. 

Finally, we consider the pricing of the Fund very attractive - according to Morningstar, the average fee for the retail share class of a global large cap growth equity fund is 1.59% p.a., and the Fund comes at a fraction of this price. On top of this, Endowus have worked with Schroders to launch the C (Clean) share class for retail investors in Singapore, making the Fund one of the cheapest amongst its peers.

🌱Sustainable Investing Methodology

Schroder ISF Global Sustainable Growth Fund has been classified as an Article 8 Fund under the EU Sustainable Finance Disclosure Regulation (SFDR). Article 8 Funds promote environmental and/or social characteristics, and follow good governance practices.

The Investment Manager applies sustainability criteria when selecting investments for the Fund. 

Companies are assessed and rated against a set of questions covering issues such as respect for the environment; fair and equitable treatment of employees, suppliers and customers; corporate citizenship; capital allocation and governance.

The Investment Manager will decide on a case by case basis whether a company is eligible for inclusion in the investable universe, taking into account these ratings. While all companies are assessed against all questions, the Investment Manager’s decision will focus on those areas that are most relevant to the particular business of that company. In these areas, the company should generally be appraised as at least “strong“ in order to be accepted into the investable universe. The eligibility of each company in the Fund’s portfolio is then reviewed at least annually.

The primary sources of information used to perform the analysis are Schroders’ proprietary sustainability tools, third-party research, unconventional data sourced by our Data Insights Unit, NGO reports and expert networks. The Investment Manager also scrutinises company sustainability reports and other disclosures, which may be complemented by direct engagement with the company during the assessment process.

The Investment Manager ensures that at least 90% of companies in the Fund’s portfolio are rated against the sustainability criteria. As a result of the application of sustainability criteria, at least 20% of the Fund’s potential investment universe is excluded from the selection of investments.

For the purposes of this test, the potential investment universe is the core universe of issuers that the Investment Manager may select for the Fund prior to the application of sustainability criteria, in accordance with the other limitations of the Investment Objective and Policy. This universe is composed of equity and equity related securities of companies worldwide.

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Updated by Endowus: June 2021

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