Access income and growth from the world s fastest growing economies Schroder ISF Emerging Multi-Asset Income
Emerging Market (EM) assets are an excellent source for high yields, especially at a time when investors are facing the challenge of low interest rates. The Schroder ISF Emerging Multi-Asset Income (the Fund ) taps into this tremendous yield potential through a flexible and selective approach to investing in EM. Three key benefits 1 Focuses on attractive and sustainable monthly payouts 1 2 A diversified and dynamic approach to tapping into the best EM opportunities Expertly managed by established and well-resourced investment teams 3 Schroder International Fund is referred to as Schroder ISF throughout this document. 1 Distributions of 5% p.a. of the net asset value per unit of the Schroder ISF Emerging Multi-Asset Income (the Fund ) will be declared on a monthly basis. The distributions are not guaranteed and will be reviewed annually. In the event of income and realised gains being less than the intended distribution, distributions will be made from capital. Investors should be aware that the distributions may exceed the income and realised gains of each fund at times and lead to a reduction of the amount originally invested, depending on the date of initial investment. 2 Schroder ISF Emerging Multi-Asset Income
Why invest in Emerging Markets now? Emerging Markets are one of the world s most exciting investment opportunities, offering investors potential for both yield and growth. Strong structural advantages EM economies own a larger share of the world s land and resources, and have higher potential GDP compared to Developed Markets (DM) Broader opportunities EMs offer access to a wider universe of investment opportunities including equities, bonds, currencies and commodities Superior yields and valuations EM stocks and bonds offer superior yields compared to those in DM, while EM equities are significantly cheaper than DM equities An opportune time to access both yield and growth Schroder ISF Emerging Multi-Asset Income 3
Why invest in Schroder ISF Emerging Multi-Asset Income? Focuses on attractive and sustainable payouts 2 Diversified and dynamic approach captures best of EM income The Fund derives its yield from a wide range of EM asset classes 3. These diverse sources of income aim to provide investors with attractive potential payouts of 5% p.a. Exposure: 60.4% Yield: 3.9% Cash Exposure: 0.3% Alternatives Exposure: 3.4% Source: Schroders, as at 31 December 2017. EM Local Currency Government Bonds Exposure: 10.0% Yield: 6.0% EM USD Government Bonds Exposure: 12.6% Yield: 4.8% EM Corporate Bonds Exposure: 13.3% Yield: 4.3% While EM assets offer attractive potential, the dispersion of returns within individual markets is high. Investors need an actively managed, diversified approach to investing in EM. Robust risk management is also critical to maximise diversification benefits and limit downside risk. % 100 90 80 70 60 50 40 30 20 10 0 Apr 15 Dec 15 Aug 16 Apr 16 Dec 17 EM Absolute Return EM Corporate Bonds Cash and Income EM Local Currency Government Bonds EM USD Government Bonds Alternatives The Fund allocates dynamically between different EM asset classes according to market conditions, capturing both income and growth potential at a volatility target of 8 16% p.a. Managed by specialist investment teams The Fund is designed to draw on the asset allocation, stock selection and risk management expertise of three specialist investment teams at Schroders. This collaborative approach can generate the most efficient access to opportunities across all asset classes. Global Income Multi-Asset Team Overall asset allocation and risk management EM Fixed Income Active bond selection emerging market assets $67bn managed by Schroders Active stock selection Source: Schroders, as at 30 June 2017. 2 Distributions of 5% p.a. of the net asset value per unit of the Schroder ISF Emerging Multi-Asset Income (the Fund ) will be declared on a monthly basis. The distributions are not guaranteed and will be reviewed annually. In the event of income and realised gains being less than the intended distribution, distributions will be made from capital. Investors should be aware that the distributions may exceed the income and realised gains of each fund at times and lead to a reduction of the amount originally invested, depending on the date of initial investment. 3 Asset classes shown net of futures, cash is shown as physical allocation. Significant positions only shown. May not sum to 100% as asset class weights are shown net of futures while the cash allocation is shown gross (i.e. the physical cash allocation). For illustrative purposes only and not a recommendation to buy/sell. 4 Schroder ISF Emerging Multi-Asset Income
Proven track record Cumulative Performance: Schroder ISF Emerging Multi-Asset Income USD A Acc 8 April 2015 31 December 2017 Price Indexed 105 100 95 90 85 80 75 Fund Total Return = +14.2% Fund Annualised Return = +5.0% p.a. Apr 15 Jul 15 Nov 15 Feb 16 Jun 16 Sep 16 Dec 16 Apr 17 Schroder ISF Emerging Multi-Asset Income Representative Index Source: Morningstar, USD, bid-to-bid, net dividends reinvested. On an offer-to-bid basis, the Fund s Total Return = +8.5%, Annualised Return = +3.0% p.a. Past performance is not an indicator of future performance. The share class was launched on 8 April 2015. The representative index shown is 50% MSCI Emerging Markets Index (USD), 25% EMBI Global Diversified (USD), 25% GBI-EM Global Diversified (USD). Morningstar 2017. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Fund characteristics Geographical breakdown Portfolio at a glance EM Fixed Income 71.2% 12.3% No. of holdings 149 No. of holdings 104 Dividend yield 3.9% Gross yield 5.3% P/E ratio 11.0 Average credit rating BBB 6.9% 7.2% 2.4% Return on equity 19.5% Average duration 4.7 years Asia Others Eastern Europe Latin America Middle East & Africa EM Fixed Income 26.6% 39.2% 25.3% 36.8% EM USD EM Local 17.3% 16.9% 16.1% 21.8% Latin America Asia Eastern Europe Middles East & Africa Source: Schroders, as at 31 December 2017. Past performance is not indicative of future results. Schroder ISF Emerging Multi-Asset Income 5
Fund details Share Class SGD-H A Dis USD A Acc USD A Dis AUD-H A Dis Investment Objective The Fund aims to provide a variable income distribution of 4% to 6% per annum and capital growth over a market cycle by investing in a diversified range of assets and markets worldwide. The Fund aims to provide a volatility (a measure of how much the Fund's returns may vary over a year) of between 8 16% per annum. Launch Date 8 Apr 2015 Currency SGD USD USD AUD Mode of Subscription Cash / SRS Cash Cash Cash Minimum Subscription Amount USD 1,000 or equivalent Payout 5% p.a. 5,6 monthly N/A 5% p.a. 5 monthly 5% p.a. 5,6 monthly Sales Charge Up to 5% p.a. Management Fees Up to 1.25% p.a. Dealing Frequency Daily Share Class Available Distribution Accumulation Distribution Distribution Bloomberg Ticker SCEMAIS:LX SCEMAIA:LX SCEMAIU:LX SCEMAAA:LX ISIN Code LU1196710864 LU1196710195 LU1196710351 LU1196710781 Fund Size USD 266.4 million (as at 31 December 2017) 5 Distributions at a variable percentage of the net asset value per unit of the Fund will be declared on a monthly basis. The distributions are not guaranteed and will be reviewed annually. In the event of income and realised gains being less than the intended distribution, distributions will be made from capital. Investors should be aware that the distributions may exceed the income and realised gains of each fund at times and lead to a reduction of the amount originally invested, depending on the date of initial investment. 6 The AUD-H/USD-H/SGD-H share classes make regular distributions at a variable rate, based on gross investment income plus a premium when the foreign currency interest rate is higher than the base currency (US dollar) interest rate, and minus a discount when the foreign currency interest rate is lower. The level of premium or discount is determined by differences in the foreign and base currency interest rates and is not part of the fund s objective or investment policy. For example, when AUD interest rates are higher than USD interest rates, distributions will include a premium paid out of capital. The distributions paid out by this share class may be significantly reduced if AUD interest rates fall compared to USD interest rates. This is prepared by Schroders for information and general circulation only and the opinions expressed are subject to change without notice. It does not constitute an offer or solicitation to deal in units of the Fund and does not have regard to the specific investment objectives, financial situation or the particular needs of any specific person who may receive this. Investors may wish to seek advice from a financial adviser before purchasing units of any Fund. In the event that the investor chooses not to seek advice from a financial adviser, he should consider whether the Fund in question is suitable for him. Past performance of the Fund or the manager, and any economic and market trends or forecast, are not necessarily indicative of the future or likely performance of the Fund or the manager. The value of units in the Fund, and the income accruing to the units, if any, from the Fund, may fall as well as rise. Investors should read the prospectus, available from Schroder Investment Management (Singapore) Ltd or its distributors, before deciding to subscribe for or purchase units in any Fund. Funds may carry a sales charge of up to 5%. The Fund may use or invest in derivatives. Schroders Reg No 199201080H