Schroder Sustainable Global Core Fund
An actively managed, highly diversified global equity fund that provides the benefits of index-based investing from a risk and cost perspective with the advantage of relative performance upside potential across a broad range of market environments.
This product is likely to be appropriate for a consumer seeking capital growth for a small or core component of their portfolio, with a high or very high risk and return profile. This product is unlikely to be suitable for a consumer seeking capital preservation or with a short investment timeframe.
To outperform the MSCI World ex Australia ex Tobacco Index (net dividends reinvested) before fees with low index-relative risk across a broad range of market environments.
The benefits of investing in the Fund include:
- Global diversification through a highly diversified portfolio with typically in excess of 500 stocks, which minimises stock-specific risk. Our research suggests that there is a long-term premium available to investors focused on valuations and on business quality. We exploit this through the Fund's broad investment universe of over 10,000 ESG-rated stocks globally.
- Limited index-relative risk as top-down risks are carefully managed by applying index-relative limits on the weights of regions, sectors and stocks in our portfolio construction process.
- Dedicated and well resourced QEP investment team with clear ownership and accountability for meeting the investment objective of the Fund.
- Market risk: includes the risk of volatility and negative returns arising from investment markets.
- Equities risk: includes the risk that changes in share prices will negatively impact on the value of investment.
- International investments risk: includes the risk that international political, economic or currency events negatively impact the value of investments.
- Emerging Markets/Frontier Markets risk: includes the risk of significantly higher price volatility, less liquidity and more government intervention in the economy than in developed markets.
For a comprehensive list of risks please refer to the PDS.
|Fund Inception date||31 October 2002|
Wholesale class - $20,000
|Buy/sell spread^||0.15% on application and 0.10% on withdrawal|
|Management fees and costs||
Wholesale class - 0.30% p.a.
Wholesale & Professional class: Normally last business day of June and DecemberInstitutional class: Accumulation only
|mFund code||SCH31 (only wholesale class available)|
^Subject to change. Refer to the Buy/Sell spreads page in the Fund Centre
*Additional fees and costs may apply. Please refer to the product disclosure statement for further details.
HOW THE FUND IS MANAGED
Our investment process can be summarised in three stages:
Stage 1: Fundamental drivers
Our starting point is the universe of over 10,000 companies with ESG data coverage. We then apply exclusions for companies facing increased ESG risks given the nature of their business involvements. All stocks in QEP's global universe are assessed in terms of their value and quality as well as their sustainability (using our proprietary QEP ESG Rating). Our QEP ESG Rating incorporates a wide spectrum of ESG considerations. The value of a company is determined across measures of dividends, cashflow, earnings and assets. Quality is assessed using measures of profitability, stability, financial strength, governance and sales growth. Our ranks are re-calculated on a daily basis in order to ensure that the latest information is incorporated e.g. price movements and company fundamentals.
Stage 2: Stock selection, including ESG integration
Of the stocks which meet our Stage 1 requirements we then decide whether to invest in each one, and if so how much, by assessing their ESG characteristics, company fundamentals, liquidity and volatility. We prioritise stocks which are attractive on ESG and fundamental measures, and where we have no concerns over their liquidity or volatility. These would be allowed our full target overweight at time of purchase. Less attractive and/or riskier characteristics are penalised, resulting in our full target purchase weight being scaled back to our maximum underweight (sometimes to zero).
Stage 3: Portfolio construction
Awareness of risk management is integrated throughout our investment process and in particular in portfolio construction. The most critical role of our portfolio managers is to understand when stocks are attractive on a risk-adjusted basis, maximising return opportunities within a comprehensive risk framework. Portfolios are exceptionally diversified, accessing a genuinely broad opportunity set across countries, sectors and market capitalisations, while reducing stock-specific risk. Stock selection is primarily driven by bottom-up decisions made on the basis of our evaluation of a company’s ESG characteristics, stock fundamentals and other metrics as described above. Sector, country and regional allocations are generally allowed to build from our stock selection process – we only invest where we see the best opportunities.
Currency exposure is typically unhedged however currency derivatives may be used with equity index futures in managing cash flows or to manage active currency positions relative to the benchmark for risk management purposes.