Fund Rationale: Schroder ISF Global Climate Change Fund

Schroder ISF Global Climate Change Fund (the “Fund”)
SGD A Accumulation Shares (ISIN: LU0312595415)
Fund Manager Page
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Endowus have selected the Fund for its robust investment process focusing on capturing opportunities arising from climate change issues, its experienced and stable management team, and its  proven track record.

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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 the investment manager believes will benefit from efforts to accommodate or limit the impact of global climate change.

Suitability: Investors who wish seek capital growth by investing in equities of global companies that recognise the threats of climate change and embrace the challenges early, and will ultimately benefit from long-term structural growth.

Cost:
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* Total Fund-level Fees include fund management fee of 1.50%.
** 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: 29 June 2007
Share Class Inception: 10 August 2007
Benchmark: MSCI World

Fund AUM: SGD 5.0bn
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 Schroders ISF Global Climate Change Fund for its robust investment process focusing on capturing opportunities arising from climate change issues, its experienced and stable management team, and its  proven track record. The Fund’s management team consists of 3 portfolio managers and 2 climate change specialists, supported by over 100 analysts from Schroders’ Global and International Equity team. Simon Webber has been the lead portfolio manager of the Fund since its inception in 2007, and has over 20 years of investment management experience. 

Schroders have over 12 years of clear thought leadership on the investment implications of climate change, and have developed a robust, ESG-integrated investment process focusing on this theme. The portfolio management team identify key themes relating to climate change, such as clean energy, energy efficiency, environmental resources, and sustainable transport, and names that would benefit from various transitions that happen within each theme. The team then conduct bottom-up fundamental analysis on each company, considering factors such as growth gap, valuation, and other ESG factors using their proprietary framework. The Fund also employs an exclusion list that prohibits investment in the traditional energy sector (e.g. oil and gas, shale oil, etc), tobacco companies, and weapon manufacturers. 

This results in a high-conviction portfolio of 40 to 70 names with a slight tilt to growth. The strategy has delivered superior risk-adjusted returns relative to its global peers in the Morningstar “Sector Equity Ecology” category.

🌱Sustainable Investing Methodology

Schroder ISF Global Climate Change 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.

When assessing the significance of climate change on the long-term business outlook for a company, a company is assessed on a number of factors which include but are not limited to: 

  • If the company has significant direct industry exposure to climate change trends (mitigation –reducing greenhouse gas emissions through energy efficiency, renewable power, and cleaner vehicles; or adaptation - those that are preparing for the impacts of climate change, for example water stress, coastal flooding, community health issues, or supply chain disruptions, among other issues).
  • The proportion of business segments that are potentially exposed to climate change trends.
  • If the company has significant investment and research and development spending related to the transition to a lower carbon economy.
  • A product portfolio that takes into account the physical and transition risks posed by climate change.
  • The impact on the company of rising carbon costs in the context of its industry and competitive environment.

The Investment Manager will then decide on a case by case basis whether a company is eligible for inclusion in the Fund’s investment universe, based on this assessment. In addition, the Investment Manager’s ESG analysis seeks to evaluate the materiality and impact of a range of ESG factors on the sustainability of future earnings growth and as potential risk factors that may affect a company’s valuation. The Investment Manager’s decision will focus on ratings in the areas that are most relevant to the particular business of that company.

The Investment Manager performs its own analysis of information provided by the companies, including information provided in company sustainability reports and other relevant company material. The research draws information from a wide variety of publicly available corporate information and company meetings, broker reports and outputs from industry bodies, research organisations, think tanks, legislators, consultants, NGOs and academics. Third party research is used as a secondary consideration, and generally provides a source of challenge or endorsement for the Investment Manager’s proprietary view.

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 comprised of equity and equity related securities of companies worldwide.

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Updated by Endowus: March 2021

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