For professional investors and advisers only Schroder International Selection Fund Global Multi-Asset Income Focusing on Income
Demand for a reliable and well-diversified income stream has never been stronger, yet the current economic environment has made this increasingly difficult to achieve. Generating a sustainable income stream with a moderate risk profile is no longer possible by investing in a single asset class. Before the global financial crisis in 2008, investors could expect to achieve a 5% yield by investing in government bonds with a 10-year maturity. As yields have fallen, investors seeking that level of income have had little choice but to invest in riskier assets, pushing many investors out of their comfort zone in terms of risk exposure. Now there is a solution for those seeking a regular and sustainable yield with lower risk, in-line with a typical cautious managed fund, where many investors will be more comfortable.
Targeting a clear outcome Schroder ISF* Global Multi-Asset Income is designed to help investors generate a regular income stream in the current low-growth, low-yield environment, where traditional sources of income can no longer fulfi l their requirements. We aim to provide an attractive, regular and sustainable income without an increased exposure to risk. Schroder ISF Global Multi-Asset Income offers a complete income solution for a broad range of investors. Delivering sustainable income We target a fi xed annual distribution of 5% p.a.** which can be distributed or accumulated within the fund. Alongside generating a regular income stream, we also aim to grow capital, with a total combined return of 7% p.a.** Taking advantage of global opportunities We harvest income from a range of different asset classes, including global equities, investment grade bonds, high-yield bonds and emerging market debt. Our fund managers source opportunities across asset classes, regions and sectors when establishing their asset allocation in order to take advantage of yield opportunities wherever they exist. Focus on quality Our fund managers prioritise the consistency and reliability of income.they therefore focus on the quality of securities, looking for equity and fi xed income investments where the yield is supported by strong fundamentals, and will not sacrifi ce quality to achieve the yield. Risk management Our fund managers operate a robust risk management process, where they pursue a diversifi ed approach and monitor risk at both a portfolio and security level. As such, the fund is coherently managed as a single entity rather than simply packaging together disparate strategies. Expertise and resource The fund is managed by Aymeric Forest and Iain Cunningham from the Multi-Asset team. They are responsible for overall asset allocation and risk management. Individual security selection is carried out by security specialists: Schroders Quantitative Equity Product (QEP) team and the Multi-Asset Advanced Beta team for equities, and the global Fixed Income team for bonds. *Schroder International Selection Fund is referred to as Schroder ISF throughout this brochure. **The fund intends to make regular fi xed distributions to investors. The distribution is reviewed annually by the managers to ensure that it is still suitable given the fund s focus on sustainable income. If its income is insuffi cient to cover the payments, the payments may reduce the fund s capital. The target 5% distribution and 7% return are gross of fees, targets only and are not guaranteed. 5% P.A.** INCOME TARGET 7%P.A.** TARGET TOTAL RETURN 5 7%P.A. TARGET REALISED VOLATILITY (MAXIMUM 10% P.A.) 2
Providing income for a broad range of investors Planning your clients income needs isn t all about the numbers it will take into account their current circumstances as well as establishing a realistic view of how they want to live in the future. There are a number of moments in a person s life when income-producing investments might come in handy; whether they are paying for school or university fees, needing healthcare support, or requiring supplemental income to earnings when approaching or throughout retirement. Schroder ISF Global Multi-Asset Income can be used to provide extra income when receiving a sustainable stream of income is a key requirement. Whilst the distribution share class will provide immediate access to income to cover the cost of a specific life event, the accumulation share class is designed to save for longer-term objectives. Access to regular income at your convenience Distribution share class Immediate access Accumulation share class Saving for the longer term Supplementary income Special Healthcare Education Retirement A rainy day occasions Making use of income investing requires a thorough and honest understanding of what your client wants to achieve, both personally and financially, and the level of risk they are prepared to take. For more information, please visit www.incomeiq.com 3
A robust and coherent investment process The fund s investment process centres on the Global Income Committee which leverages the breadth of Schroders expertise across the Multi-Asset, Fixed Income and QEP teams. Chaired by Aymeric Forest and Iain Cunningham, who have overall responsibility for the fund, members of the committee frequently meet to exchange investment ideas, review the fund and discuss overall asset allocation and risk management. This team-based approach is used to combine bottom-up and top-down investment approaches as effectively as possible, while responding to the challenges of choosing securities in line with the incomefocused philosophy of the fund. 3 step investment process 1 Asset allocation Flexible allocation across and within asset classes 2 Equity security selection Fixed income security selection Directly invested Highly diversified 3 Risk management overlay Focus on identifying high yielding, quality securities to generate a sustainable income stream Focusing on risk-adjusted yields Our approach to targeting risk-adjusted yields, results in the selection of securities where the yield is backed by stable fundamentals, ensuring the sustainability of income streams. 4
An experienced multi-disciplinary team Multi-Asset & Portfolio Solutions Over 100 investment professionals globally Aymeric Forest Lead Fund Manager; Head of Multi-Asset Investments Europe Iain Cunningham Co-Fund Manager Monthly Global Income Committee In-depth quarterly investment meetings, on-going dialogue Security Selection Specialist teams Over 150 investment professionals across Equities and Fixed Income US High Yield Global Equities European Investment Grade European High Yield US Investment Grade Municipal Bonds Emerging Markets Local Currency Emerging Markets Sovereign Infrastructure Property Risk management overlay Multi-Asset team The fund is supported by a global multi-disciplinary team including over 200 investment professionals, all focussed on generating sustainable income across asset classes Aymeric Forest Head of Multi-Asset Investments Europe and Lead Fund Manager 5
Aymeric Forest Head of Multi-Asset Investments Europe and Lead Fund Manager Aymeric Forest joined Schroders in May 2011. His investment career began in 1996. Aymeric is the lead manager of Schroder ISF Global Multi-Asset Income and responsible for investment on behalf of European Multi-Asset clients and complex segregated mandates. He is also a member of the Global Asset Allocation Committee and the Volatility Risk Premia group leader. Prior to joining Schroders, Aymeric was Global Head of Investment Solutions at BBVA in Madrid, responsible for the multi-asset products. He was also Head of Tactical Asset Allocation quantitative strategies and senior fund manager at ABN AMRO. He is a CFA Charterholder and has a Masters degree in Finance, Nancy 2 University (France), Giessen (Germany) and Lund (Sweden). Iain Cunningham Co-Fund Manager Iain Cunningham is responsible for the management of a number of Multi-Asset mandates that are principally focused on income and dynamic asset allocation. He specialises in currency and commodity research and is a member of the Strategic Investment Group Multi-Asset (SIGMA). He joined Schroders in 2007, is a CFA Charterholder and holds a Masters in Economics and Finance and a Bachelors in Economics from Loughborough University. Key information ISIN code Bloomberg code LU0757359368 SCHGMAA:LX Date of inception 18 April 2012 Base currency USD** Ongoing charge (latest available) 1 1.58% Entry charge 5.00% of the gross investment amount Information in the table above is for the A Accumulation share class, for further share class information please see the Prospectus. ** EUR, GBP, CHF, AUD, RMB, HKD and SGD hedged share classes also available. 1 The ongoing charges figure is based on the last year s expenses for the year ending May 2015 and may vary from year to year. 6
T R U S T E D H E R I T A G E A D V A N C E D T H I N K I N G About Schroders 437.4bn managed across equities, fixed income, multi-asset, alternatives and real estate. An extensive global network of over 3,600 employees. 37 offices in 27 countries across Europe, the Americas, Asia and the Middle East. Over 200 years experience of investment markets. Risk warnings The capital is not guaranteed. The fund intends to make regular fixed distributions to investors and, if its income is insufficient to cover these payments, these payments may reduce the fund s capital. All equity forward sales are with a single counterparty. In case of default, the relevant equities will be sold in the market and this may affect performance. Non-investment grade securities will generally pay higher yields than more highly rated securities but will be subject to greater market, credit and default risk. A security issuer may not be able to meet its obligations to make timely payments of interest and principal. This will affect the credit rating of those securities. Investments denominated in a currency other than that of the share-class may not be hedged. The market movements between those currencies will impact the shareclass. Investment in bonds and other debt instruments including related derivatives is subject to interest rate risk. The value of the fund may go down if interest rate rise and vice versa. The fund may hold indirect short exposure in anticipation of a decline of prices of these exposures or increase of interest rate. The fund may be leveraged by trading in a high volume of derivatives to achieve a risk target consistent with its risk profile. Changes in China s political, legal, economic or tax policies could cause losses or higher costs for the fund. To find out more please visit www.schroders.com/gmai or speak to your local Schroders representative Source: Schroders, as at 30 June 2015. Important information: This document does not constitute an offer to anyone, or a solicitation by anyone, to subscribe for shares of Schroder International Selection Fund (the Company ). Nothing in this document should be construed as advice and is therefore not a recommendation to buy or sell shares. Subscriptions for shares of the Company can only be made on the basis of its latest Key Investor Information Document and prospectus, together with the latest audited annual report (and subsequent unaudited semiannual report, if published), copies of which can be obtained, free of charge, from Schroder Investment Management (Luxembourg) S.A. An investment in the Company entails risks, which are fully described in the prospectus. Past performance is not a reliable indicator of future results, prices of shares and the income from them may fall as well as rise and investors may not get the amount originally invested. Schroders has expressed its own views and opinions in this document and these may change. This document is issued by Schroder Investment Management Ltd., 31, Gresham Street, EC2V 7QA, who is authorised and regulated by the Financial Conduct Authority. For your security, communications may be taped or monitored. w47820