Thinking about where to put your money these days can be a real head-scratcher, especially with so much talk about being green and responsible. If you’re looking into options that try to do good while also aiming for growth, the Schroder International Selection Fund Global Sustainable Growth might pop up on your radar. This article will break down what this fund is all about, from its basic setup to how it picks stocks and what risks you should know about. We’ll try to keep it simple, so you can get a clear picture.
Key Takeaways
- The Schroder International Selection Fund Global Sustainable Growth focuses on global equity investments, meaning it puts money into company stocks all over the world.
- It uses a special ‘QEP’ investment approach, which basically means they have a proven way of picking stocks, and they also look at environmental, social, and governance (ESG) factors.
- This fund is set up as a SICAV/Offshore product, which is a common type of investment fund structure for international investors.
- Even though it’s all about sustainable growth, this specific fund isn’t eligible for certain ‘SDR Labelling’ that some other sustainable funds might get.
- Like any investment, it has risks. Things like currency changes, using complex financial tools called derivatives, and changes in interest rate rules (IBOR transition) could affect its performance.
Understanding the Schroder International Selection Fund Global Sustainable Growth
This section provides an overview of the Schroder International Selection Fund Global Sustainable Growth, setting the stage for a more detailed exploration of its investment approach, sustainability focus, and performance.
Defining the Fund’s Core Objective
The primary goal of the Schroder International Selection Fund Global Sustainable Growth is to achieve long-term capital growth by investing in companies worldwide. The fund focuses on businesses that meet specific sustainability criteria, aiming to deliver both financial returns and positive environmental and social impact. It’s designed for investors who want their investments to align with their values.
Investment Horizon and Asset Class
This fund is designed for investors with a long-term investment horizon, typically five years or more. It primarily invests in global equities, meaning stocks of companies located around the world. This focus on equities provides the potential for higher returns but also comes with a higher level of risk compared to more conservative asset classes like bonds. The fund’s global equity focus allows it to tap into growth opportunities across different regions and sectors.
Launch and Amendment Dates
The Schroder International Selection Fund Global Sustainable Growth was initially launched on September 24, 2015. The fund has been amended since its launch, with the most recent amendment occurring in April 2024. These amendments may reflect changes in investment strategy, ESG considerations, or regulatory requirements. Investors should review the fund’s latest prospectus and factsheet to stay informed about any updates.
Investment Strategy and ESG Integration
The QEP Investment Approach
The Schroder International Selection Fund Global Sustainable Growth uses the QEP investment approach, which has been in place since 2000. It’s designed to beat the market over the long haul without being tied to any specific index. The team looks at over 10,000 companies with ESG ratings to build a portfolio with a lot of different stocks – usually more than 200. This approach blends traditional financial analysis with a close look at how companies handle environmental, social, and governance issues. It’s about finding companies that are not only financially sound but also responsible in their operations. The QEP approach integrates ESG considerations across all QEP investment strategies.
ESG Considerations in Stock Selection
ESG factors are a big deal when it comes to picking stocks for this fund. The fund managers actively seek out companies with strong ESG profiles and are more likely to invest in them. On the flip side, companies with poor ESG track records may face penalties in the stock selection process. This integration goes beyond just ticking boxes; it’s about understanding how ESG factors can affect a company’s long-term performance and risk. The fund also looks for companies that are disrupting existing business practices through innovative and sustainable products. The fund aims to deliver positive environmental and social impacts through its engagement with investee assets.
Portfolio Diversification and Stock Holdings
The fund aims for broad diversification, typically holding over 200 stocks. This helps to reduce risk by spreading investments across different companies and sectors. The specific holdings can change over time as the fund managers adjust the portfolio based on their ongoing analysis of companies and market conditions. The fund invests in equities of companies worldwide which meet the investment manager’s sustainability criteria. The fund also offers SRI portfolio options for DFM’s & portfolio providers.
The breadth of opportunities available in global equities allows for the full integration of ESG considerations without having to sacrifice potential returns. Incorporating ESG enhances performance, providing it is integrated in an investment led manner, and that ESG considerations are likely to become increasingly additive in the future.
Sustainable and Responsible Investment Overview
ESG Plus Style Classification
So, this fund uses something called an "ESG Plus" style. What does that even mean? Basically, it means they’re not just looking at traditional financial metrics. They’re also seriously considering environmental, social, and governance factors when picking stocks. It’s like adding another layer of analysis to make sure the investments are not only profitable but also responsible. They want to invest in companies that are doing good things for the world, or at least, not actively making it worse. It’s a pretty common approach these days, but the specifics of how they do it are what sets them apart.
Policy on Environmental and Social Characteristics
This fund has a clear policy: it aims to promote environmental or social good through its investments. The fund must maintain a higher overall sustainability score than the MSCI AC World (Net TR) index, based on the Investment Manager’s rating system. This benchmark doesn’t consider the environmental and social characteristics promoted by the Fund. The fund also invests at least 40% of its assets in sustainable investments, which are investments that the Investment Manager expects to contribute towards the advancement of one or more environmental and/or social objective(s).
Exclusions, Integration, Research, and Engagement
Okay, so how does this all work in practice? Well, first, they have some firm-wide exclusions. This means they won’t invest in certain types of companies, like those involved in controversial weapons. Then, they integrate ESG factors into their research process. This means their analysts are actively looking at ESG risks and opportunities when they’re evaluating companies. They also engage with the companies they invest in, trying to push them to improve their ESG performance. It’s not just about picking the "good" companies; it’s also about trying to make the "not-so-good" companies better. They use ESG research to inform their decisions.
It’s worth noting that this isn’t just about feeling good. There’s a growing body of evidence that suggests companies with strong ESG practices tend to perform better financially over the long term. So, it’s not just about doing the right thing; it’s also about making smart investments. They also consider hedge fund data.
Here’s a quick rundown:
- Exclusions: They avoid certain sectors or companies.
- Integration: ESG factors are part of their analysis.
- Research: They actively seek out ESG information.
- Engagement: They talk to companies about ESG issues.
Key Characteristics of the Schroder International Selection Fund Global Sustainable Growth
Global Equity Focus
The Schroder International Selection Fund Global Sustainable Growth primarily invests in equities, meaning it focuses on stocks of companies around the world. This global approach allows the fund to tap into growth opportunities across different markets and sectors. The fund aims to identify companies that not only demonstrate financial strength but also adhere to sustainable practices. This blend of financial and ethical considerations shapes the fund’s investment choices.
SICAV/Offshore Product Structure
The fund is structured as a SICAV (Société d’Investissement à Capital Variable), which is a type of open-end investment company common in Europe. Being an offshore product means it’s domiciled outside of the investor’s country of residence, often for regulatory or tax reasons. This structure offers a framework for managing and distributing the fund’s assets, and it’s important for investors to understand the implications of this structure in their specific tax and legal context.
SDR Labelling Status
Currently, the Schroder International Selection Fund Global Sustainable Growth is not eligible to use SDR labelling. SDR labels are used to indicate the sustainability level of a fund. The fund’s characteristics policy indicates that it must maintain a higher overall sustainability score than the MSCI AC World (Net TR) index, based on the Investment Manager’s rating system. This benchmark (which is a broad market index) does not take into account the environmental and social characteristics promoted by the Fund. The Fund also promises to invests at least 40% of its assets in sustainable investments, which are investments that the Investment Manager expects to contribute towards the advancement of one or more environmental and/or social objective(s).
Understanding the SDR labelling status helps investors gauge the fund’s commitment to sustainability standards. While the fund may not have a specific label, it integrates ESG factors into its investment process and aims for sustainable outcomes. Investors should review the fund’s documentation for detailed information on its sustainability approach.
Here’s a quick recap of the fund’s key features:
- Global equity investments
- SICAV structure
- Focus on sustainable companies
- Not eligible for SDR labelling
Analyzing Fund Performance and Holdings
Accessing Fund Factsheets
To really understand how the Schroder International Selection Fund Global Sustainable Growth is doing, you’ll want to check out the fund factsheets. These documents are like a report card, giving you key info on the fund’s performance, strategy, and holdings. You can usually find these on the Schroders website. The factsheets are updated regularly, so you’re always looking at the most recent data.
Reviewing Fund Holdings Information
Knowing what the fund actually invests in is super important. The fund holdings information tells you which companies the fund has positions in, and how much of the fund’s assets are allocated to each. This helps you see if the fund’s investments align with your own values and risk tolerance. You can typically find a detailed list of holdings within the fund’s factsheet or in separate reports on the Schroders website. Reviewing fund holdings helps investors understand the fund’s investment decisions.
Sustainability Information for Investors
Since this fund focuses on sustainable growth, it’s crucial to look at its sustainability information. This includes details on how the fund incorporates ESG (Environmental, Social, and Governance) factors into its investment decisions. You’ll want to see how the fund measures and reports on its sustainability performance. Look for things like:
- The fund’s ESG rating or score
- Information on the fund’s carbon footprint
- Details on the fund’s engagement with companies on ESG issues
Understanding the fund’s approach to sustainability is key for investors who want their investments to reflect their values. This information helps you assess whether the fund is truly committed to sustainable investing or if it’s just "greenwashing."
It’s also worth checking out the fund’s literature for more in-depth analysis and reports on its sustainability efforts.
Risk Considerations for the Schroder International Selection Fund Global Sustainable Growth
Investing always involves some level of risk, and the Schroder International Selection Fund Global Sustainable Growth is no exception. It’s important for investors to understand these risks before making any decisions. Let’s explore some key areas of concern.
Currency Fluctuation Risks
Because the fund invests globally, it’s exposed to currency fluctuation risks. Changes in exchange rates can impact the value of the fund’s assets when converted back into the investor’s base currency. For example, if the fund holds assets in Euros and the Euro weakens against the US Dollar, the value of those Euro-denominated assets will decrease for a US-based investor. This can lead to a reduction in overall returns, even if the underlying investments perform well.
Derivatives and Their Potential Impact
The fund may use derivatives to manage the portfolio more efficiently. Derivatives are financial instruments whose value is derived from an underlying asset, such as a stock, bond, or currency. While derivatives can be used to hedge risk or enhance returns, they also come with their own set of risks. A derivative might not perform as expected, potentially creating losses greater than the initial cost and impacting the fund’s overall performance. It’s important to remember that derivatives can amplify both gains and losses.
IBOR Transition Implications
The financial markets are transitioning away from the use of interbank offered rates (IBORs) to alternative reference rates. This transition can affect the valuation of certain fund holdings and disrupt liquidity in some instruments. This could have an impact on the investment performance of the fund. The shift from IBORs is a complex process, and its full implications are still unfolding. Investors should be aware of the potential for disruption and volatility during this period.
It’s important to remember that past performance is not indicative of future results. Market conditions can change, and the value of investments can go down as well as up. Investors should carefully consider their own risk tolerance and investment objectives before investing in the Schroder International Selection Fund Global Sustainable Growth.
Here’s a summary of the key risk considerations:
- Currency risk can reduce returns.
- Derivatives can amplify losses.
- IBOR transition may cause valuation issues.
Transparency and Reporting Standards
Dialshifter Statement and Information
Understanding a fund’s transparency is key for investors. One aspect of this is the Dialshifter statement. Fund management companies that supply Dialshifter information offer insights into their operations. This statement can provide additional context and data points for evaluating the fund’s approach.
Commitment to Disclosure
Funds demonstrate their commitment to investors through clear and consistent disclosure practices. This includes:
- Regularly updating fund factsheets with current holdings and performance data.
- Providing detailed information on the fund’s investment strategy and ESG integration.
- Publishing reports that outline the fund’s progress toward its sustainability objectives.
Transparency builds trust. Funds that prioritize open communication with investors are more likely to attract and retain capital.
Regulatory Compliance and Oversight
Regulatory compliance is a cornerstone of investor protection. Funds like the Schroder International Selection Fund Global Sustainable Growth operate under the watchful eye of regulatory bodies. This oversight helps to ensure that the fund adheres to established reporting standards and legal requirements. This includes things like TCFD reporting, which is becoming IFRS.
Conclusion
So, that’s a look at the Schroder International Selection Fund Global Sustainable Growth. It’s a fund that aims to invest in companies around the world that meet certain sustainability standards. They really focus on ESG factors, which means looking at environmental, social, and governance aspects of businesses. The fund tries to pick stocks that have good ESG characteristics, and they also consider things like company value and quality. It’s designed to be a long-term investment, and they try to build a diverse portfolio with lots of different stocks. Like any investment, there are risks involved, such as currency changes or how derivatives might perform. But for those interested in combining global growth with a focus on sustainability, this fund offers a specific approach to consider.
Frequently Asked Questions
What is the main goal of this fund?
The Schroder International Selection Fund Global Sustainable Growth aims to invest in companies all over the world. These companies must meet certain standards for being good for the environment and society. The fund’s main goal is to help your money grow over a long time by picking stocks that are both strong businesses and responsible global citizens.
Who is this fund for, and what kind of investments does it make?
This fund is designed for long-term investors, meaning people who plan to keep their money invested for many years. It focuses on buying stocks, which are small pieces of ownership in companies. This makes it an equity fund, suitable for those looking for growth over time.
How does the fund choose its investments?
The fund uses a special way of picking stocks called the QEP approach. This method looks for companies that are good value and have strong qualities. On top of that, it deeply checks how well companies handle environmental, social, and governance (ESG) issues. This means they try to find good companies that also do good things for the world.
Is this fund truly focused on sustainable investing?
Yes, the fund is very serious about responsible investing. It has an ‘ESG Plus’ rating, which means it goes beyond just basic environmental and social checks. It actively looks for companies that promote good environmental and social practices, even if it doesn’t have a specific ‘sustainable investment’ label.
What are some of the main risks involved with this fund?
Like all investments, this fund has risks. For example, if you invest in companies from different countries, the value of your money can change if exchange rates go up or down. Also, the fund might use special financial tools called derivatives, which can sometimes lead to bigger gains or losses. There are also changes happening in how interest rates are set globally, which could affect the fund’s investments.
How can I find out more about the fund’s performance and what it invests in?
The fund is very open about its operations. You can find detailed information about its performance and what companies it owns by looking at its factsheets. It also provides specific information about its sustainability efforts. The fund follows strict rules to make sure everything is clear and easy for investors to understand.
Peyman Khosravani is a global blockchain and digital transformation expert with a passion for marketing, futuristic ideas, analytics insights, startup businesses, and effective communications. He has extensive experience in blockchain and DeFi projects and is committed to using technology to bring justice and fairness to society and promote freedom. Peyman has worked with international organizations to improve digital transformation strategies and data-gathering strategies that help identify customer touchpoints and sources of data that tell the story of what is happening. With his expertise in blockchain, digital transformation, marketing, analytics insights, startup businesses, and effective communications, Peyman is dedicated to helping businesses succeed in the digital age. He believes that technology can be used as a tool for positive change in the world.
