Schroder Global Sustainable Equity Fund
The Schroder Global Sustainable Equity Fund, managed by the QEP team, is an actively managed, index unconstrained, highly diversified global equity fund. The Fund offers the advantage of combining Value and Quality strategies in a single portfolio through investing in stocks on the basis of both attractive valuations and business quality. The combination of Value and Quality strategies provides risk and return diversifying characteristics and tends to deliver investment returns at different stages of the economic cycle, offering investors the potential for outperformance across a broad range of market environments. The Fund is available in both unhedged and hedged options.
To generate long-term returns before fees in excess of traditional capitalisation weighted global equity indices.
The benefits of investing in the Fund include:
- Our research suggests that there is a long-term premium available to investors focused on valuations and business quality (as defined by measures of company profitability, stability and financial strength). We exploit this through a highly diversified portfolio, typically invested in excess of 400 stocks. This high level of diversification minimises stock-specific risk without sacrificing conviction;
- Access to a globally unconstrained, all capitalisation portfolio which maximises the opportunity set by looking beyond the index to an investment universe of more than 15,000 stocks globally. Our bottom-up process does not impose any index-based sector or region constraints, enabling us to invest wherever we find the best opportunities. Moreover, by weighting stocks based on their fundamentals, and not their size, we are able to invest across the Market Capitalisation spectrum; and
- 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.
|Schroder Global Sustainable Equity Fund||Schroder Global Sustainable Equity Fund (Hedged)|
|Fund Inception date||8 December 2009||29 November 2010|
Wholesale class - $20,000
Wholesale class - $20,000
|Buy/sell spread^||0.20% on application
0.15% on redemption
|0.23% on application
0.18% on redemption
|Management costs (ICR)||0.75% p.a.||0.75% p.a.|
|Distributions||Normally last business day of June and December||Normally last business day of June and December|
^Subject to change. Refer to the Buy/Sell spreads page in the Fund Centre
How the Fund is managed
Our investment process can be summarised in three stages:
Stage 1: Global Blend Rank
Stock selection is focused on two key fundamental drivers of long run equity returns – Value and Quality. We create a Global Blend Rank by ranking our global universe of over 15,000 companies in terms of both their Value (across range of metrics based on dividends, earnings, cash flow, assets and sales) and Quality (based on measures of profitability, stability and financial strength). Our investment universe is the top third of the Global Blend Rank.
Stage 2: Stock selection
In deciding how much of each stock to own, a focus on business Quality (as measured by profitability, stability and financial strength) helps us to maximise our exposure to those stocks which are both attractively valued and good quality and to avoid ‘value traps’. Other considerations in scaling position sizes include measures of risk, liquidity and volatility. In order to ensure proper diversification, we apply a maximum position size limit to individual stocks and construct a highly diversified portfolio.
Stage 3: Portfolio construction
Portfolio construction is bottom-up, driven by stock selection. Portfolio managers assess the portfolio every day and re-balance according to the opportunities available. Our portfolio managers are responsible for controlling the overall risk budget of our funds, ensuring an efficient trade-off between potential risks and rewards. Exceptional diversification is one of our most important tools, maximising exposure to return opportunities across sectors, countries and market capitalisation while minimising stock-specific risk. Portfolio managers ensure that the portfolio is sufficiently diversified, typically invested across in excess of 400 stocks. Portfolio managers implement every trade decision and as experienced investors, provide an important overlay in terms of awareness of future opportunities and risks in global markets.
For the unhedged fund, 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.