Schroder European Smaller Companies Fund. Final Short Report 1 December 2015 to 30 November 2016

Schroder European Smaller Companies Fund Final Short Report 1 December 2015 to 30 November 2016

Schroder European Smaller Companies Fund Review of Investment Activities From 30 November 2015 to 30 November 2016, the price of A Accumulation units on a selling price to selling price basis rose 18.92%. In comparison, the Euromoney Smaller Europe ex UK Index and the FTSE* World Europe ex UK Index generated total returns of 19.85% 1 and 12.12% 1, respectively, in sterling terms. 1 Source: Thomson Reuters Datastream. The fund slightly lagged the Euromoney Smaller Europe ex UK benchmark. The main individual detractor was solar technology group Meyer Burger Technology after poor first quarter results. In turn, this raised concerns regarding the firm s ability to refinance bonds coming due in 2017 and we sold our holding in April. The shares have subsequently fallen more than 80% as an equity raise was indeed required. Certain Italian financial holdings notably Anima Holding and Banca Sistema also detracted from relative returns. Italian stocks generally underperformed amid concerns over the strength of the banks and worries around the constitutional referendum in early December. Asset manager Anima Holding does not face the capital issues confronting the banking sector; we feel the shares are cheaply valued and added to our position. Similarly, Banca Sistema is a factoring company and has a solid balance sheet. Computer peripherals maker Logitech International was the top positive contributor after disclosing strong quarterly results and raising full year sales forecasts. Medical devices producer Ambu supported fund returns as it continues to execute well. 2017 looks somewhat daunting with a calendar filled with key elections in the Netherlands, France and Germany, combined with the political reshuffle in Italy and likely triggering of Article 50 in the UK. However, 2016 has shown that the markets are often overly fearful in the run up to such political events. This creates mispricing inefficiencies from which we look to benefit. We continue to focus on companies with robust and protected business franchises or where market fears are causing the shares to disconnect from the intrinsic value of the underlying companies. Macro indicators have stealthily but persistently improved, which looks encouraging for the economic cycle in Europe in 2017. Fund Manager: Luke Biermann

Fund Information Interim Final Accounting dates 31 May 30 November Revenue allocation date 31 January For the year For the year Ongoing charges figure to 30.11.16 to 30.11.15 A Income units 1.70% 1.71% A Accumulation units 1.70% 1.71% Z Income units 0.95% 0.96% Z Accumulation units 0.95% 0.96% Performance Record Net Asset Net Asset Value as at Value as at Net Asset 30.11.16 30.11.15 Value Fund performance pence per unit pence per unit % change A Income units 609.03 517.64 17.66 A Accumulation units 651.66 552.42 17.96 Z Income units 105.57 89.69 17.71 Z Accumulation units 110.63 93.07 18.87 3 months 1 year 5 years Schroder European Smaller Companies Fund 0.40% 18.92% 128.44% Euromoney Smaller Europe ex UK Index (0.28)% 19.85% 109.48% FTSE* World Europe ex UK Index (0.42)% 12.12% 71.48% Fund Source: A Accumulation units on a selling price to selling price basis to 30.11.16. Indices Source: Thomson Reuters Datastream, total returns in sterling terms to 30.11.16. * FTSE International Limited ( FTSE ) FTSE. FTSE is a trade mark of London Stock Exchange plc and The Financial Times Limited and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE s express written consent.

Comparative Tables A Income units 2016 2015 2014 Financial year to 30 November p per unit p per unit p per unit Change in net asset value Opening net asset value 517.64 467.76 456.83 Return before operating charges 102.65 58.70 19.66 Operating charges (9.65) (8.82) (8.00) Return after operating charges* 93.00 49.88 11.66 Distributions 1 (1.61) Nil (0.73) Closing net asset value 609.03 517.64 467.76 *after direct transaction costs of (1.25) (1.09) (1.28) Performance Return after charges (%) 17.97 10.66 2.55 Other information Closing net asset value ( 000 s) 16,514 14,571 13,995 Closing number of units 2,711,501 2,814,852 2,991,859 Operating charges (%) 1.70 1.71 1.69 Direct transaction costs (%)** 0.22 0.21 0.27 Prices Highest buying price (p) 661.60 561.10 512.10 Lowest selling price (p) 479.90 452.00 403.20

Comparative Tables (continued) A Accumulation units 2016 2015 2014 Financial year to 30 November p per unit p per unit p per unit Change in net asset value Opening net asset value 552.42 499.19 486.77 Return before operating charges 109.54 62.64 20.94 Operating charges (10.30) (9.41) (8.52) Return after operating charges* 99.24 53.23 12.42 Closing net asset value 651.66 552.42 499.19 Retained distributions 1 1.67 Nil 0.80 *after direct transaction costs of (1.33) (1.16) (1.36) Performance Return after charges (%) 17.96 10.66 2.55 Other information Closing net asset value ( 000 s) 83,091 79,314 87,207 Closing number of units 12,750,784 14,357,510 17,469,740 Operating charges (%) 1.70 1.71 1.69 Direct transaction costs (%)** 0.22 0.21 0.27 Prices Highest buying price (p) 706.10 598.80 545.60 Lowest selling price (p) 512.20 482.30 429.70

Comparative Tables (continued) Z Income units 2016 2015 2014 Financial year to 30 November p per unit p per unit p per unit Change in net asset value Opening net asset value 89.69 81.01 79.18 Return before operating charges 17.86 10.18 3.40 Operating charges (0.94) (0.86) (0.77) Return after operating charges* 16.92 9.32 2.63 Distributions 1 (1.04) (0.64) (0.80) Closing net asset value 105.57 89.69 81.01 *after direct transaction costs of (0.22) (0.19) (0.22) Performance Return after charges (%) 18.86 11.50 3.32 Other information Closing net asset value ( 000 s) 3,794 2,734 1,431 Closing number of units 3,593,646 3,048,502 1,766,592 Operating charges (%) 0.95 0.96 0.94 Direct transaction costs (%)** 0.22 0.21 0.27 Prices Highest buying price (p) 115.40 97.55 89.11 Lowest selling price (p) 83.29 78.31 70.35

Comparative Tables (continued) Z Accumulation units 2016 2015 2014 Financial year to 30 November p per unit p per unit p per unit Change in net asset value Opening net asset value 93.07 83.47 80.79 Return before operating charges 18.53 10.48 3.45 Operating charges (0.97) (0.88) (0.77) Return after operating charges* 17.56 9.60 2.68 Closing net asset value 110.63 93.07 83.47 Retained distributions 1 1.07 0.66 0.83 *after direct transaction costs of (0.23) (0.19) (0.22) Performance Return after charges (%) 18.87 11.50 3.32 Other information Closing net asset value ( 000 s) 27,208 22,418 11,093 Closing number of units 24,593,911 24,087,246 13,290,090 Operating charges (%) 0.95 0.96 0.94 Direct transaction costs (%)** 0.22 0.21 0.27 Prices Highest buying price (p) 119.70 100.50 90.92 Lowest selling price (p) 86.43 80.68 71.78 1 These figures have been rounded to 2 decimal places. ** Direct transaction costs have been stated after deducting the proportion of the amounts collected from dilution adjustments. Please remember that past performance is not a guide to future performance and it might not be repeated. The value of investments and the revenue from them may go down as well as up and investors may not get back the amount originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money.

Portfolio Information % of net % of net assets assets as at as at Spread of investments 30.11.16 30.11.15 Austria 1.79 0.00 Belgium 1.34 1.09 Denmark 2.34 5.08 Finland 1.54 0.46 France 10.53 15.28 Germany 12.58 9.45 Ireland 13.61 12.76 Italy 12.40 19.70 Luxembourg 3.58 1.84 Netherlands 4.54 2.60 Norway 2.66 2.39 Spain 1.53 1.41 Sweden 9.54 9.69 Switzerland 14.49 13.47 United Kingdom 0.00 1.43 Cash Funds 4.25 0.00 Net other assets 3.28 3.35 % of net assets as at Major holdings 30.11.16 Schroder International Selection Fund SICAV EURO Liquidity I Accumulation EUR 4.25 Ascom Holding 3.42 Dalata Hotel Group 3.30 Ubisoft Entertainment 3.08 Cerved Information Solutions 3.05 BRAAS Monier Building Group 2.85 Logitech International 2.81 Paddy Power Betfair 2.72 Borregaard 2.66 Anima Holding 2.61 % of net assets as at 30.11.15 Ubisoft Entertainment 5.27 Loomis B 3.69 Dalata Hotel Group 3.50 Cerved Information Solutions 3.29 Montupet 3.19 Yoox Net-A-Porter Group 3.06 Smurfit Kappa Group 2.86 Paddy Power Betfair 2.83 Ascom Holding 2.60 Ambu 2.47

Investment Objective & Policy The fund s investment objective is to achieve capital appreciation through investment in smaller European companies. Investments will be made principally in smaller companies in Europe, excluding the UK. The fund will also be permitted to invest in European companies listed on other principal stock exchanges. Investment will be in directly held transferable securities. The fund may also invest in collective investment schemes, warrants and money market instruments. Risk Profile Risk and reward indicator Lower risk Potentially lower reward Higher risk Potentially higher reward 1 2 3 4 5 6 7 The risk category was calculated using historical performance data and may not be a reliable indicator of the fund s future risk profile. The fund is in this category because it can take higher risks in search of higher rewards and its price may rise and fall accordingly. The fund s risk category is not guaranteed to remain fixed and may change over time. A fund in the lowest category does not mean a risk free investment. Specific risks The fund invests in assets which are exposed to currencies other than sterling. Exchange rates may cause the value of overseas investments and the revenue from them to rise or fall. The fund invests in smaller companies which may be less liquid than larger companies and price swings may therefore be greater than in larger company funds. For these reasons, the purchase of units should not normally be regarded as a short term investment.

Report & Accounts This document is a short report for Schroder European Smaller Companies Fund for the year ended 30 November 2016. The long form Report & Accounts for the fund are available on our website www.schroders.co.uk or upon written request to Schroders, FREEPOST, RLTZ-CHSY-HBUT, PO Box 1102, Chelmsford, Essex CM99 2XX. Other Information The information contained in this report is designed to enable unitholders to make an informed judgement on the activities of the fund during the period it covers and the results of those activities at the end of the period. For more information about the activities and performance of the fund during this and previous periods, please contact the Manager. The Prospectus, the Key Investor Information Document and details of investment charges and costs are available on request or can be downloaded from our website www.schroders.co.uk. Please remember that past performance is not a guide to future performance and it might not be repeated. The value of investments and the revenue from them may go down as well as up and investors may not get back the amount originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money. For investors security, calls to Schroder Investor Services may be recorded. Manager: Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Authorised and regulated by the Financial Conduct Authority. Investment Adviser: Schroder Investment Management Limited, 31 Gresham Street, London, EC2V 7QA. Authorised and regulated by the Financial Conduct Authority. Trustee: J.P. Morgan Europe Limited, Chaseside, Bournemouth BH7 7DA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. Independent Auditors: PricewaterhouseCoopers LLP, Atria One, 144 Morrison Street, Edinburgh EH3 8EX. For further literature please contact Schroder Investor Services on 0800 718 777 or at investorservices@schroders.com, or visit our website at www.schroders.co.uk. Issued in January 2017 by Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Registered No: 04191730 England. Authorised and regulated by the Financial Conduct Authority. w35659 MR013BF16