January 2016
Marketing material
Schroder International Selection Fund
European Opportunities
Schroder ISF* European Opportunities invests in large to mid-cap
European companies and aims to deliver consistent outperformance
through the different market environments of the economic cycle using
our pragmatic ‘business cycle’ investment approach.
Why invest?
Asset class
Bonds
Equities
✓
Alternatives
Property
Fund ratings
Source: Morningstar rating award to A Inc
share class, as at 31 December 2015.
–
A strategy that targets consistent outperformance throughout the different phases of the
business cycle
–
By combining bottom-up stock selection with top-down macro views, the portfolio benefits
from companies that perform well on a fundamental basis and are aligned to the current
stage of the business cycle
–
No permanent style or size bias can help us to avoid prolonged periods of underperformance
–
Boasts a strong performance track record through different market environments1.
1 As at 31 December 2015, the fund has delivered first quartile performance over 1, 3 and 5 years. Peer group
is the IA Europe ex UK peer group A category. Performance is based on the share class with the lowest fee,
in EUR. Schroder ISF European Opportunities was launched on 12 March 2014 to accommodate a transfer
of shareholders from the Cazenove fund to the Schroder ISF SICAV. Prior to 12 March 2014 the fund uses the
track record of Cazenove Pan Europe Fund (launched on 02 January 2003) as a performance track record.
Highlights
A distinct investment approach
The fund manager combines a clear macro view with bottom-up stock selection, driven by a
thorough analysis of earnings changes relative to the market. Analysis of the business cycle
reduces the risk of stock selection by focusing attention on the required risk profile of the
company. At turning points in the business cycle, a change in risk appetite requires the portfolio’s
beta to change substantially. This is where we add value compared to funds run with a 100%
bottom-up stockpicking approach.
In-depth, proprietary research
The investment process follows a series of daily, weekly and monthly stock and economics
meetings. Fundamental and judgmental analysis form the vast majority of our business cycle
approach to investment. The speed with which investment ideas are implemented, and the size
of the investment, reflects the level of conviction the fund manager has and the stock liquidity.
Our approach is continually reviewed by assessing price moves, change in fundamentals and
our business cycle analysis.
Fund manager
Steve Cordell – Fund manager
Steve Cordell is an experienced European equities investor with over
22 years’ investment experience. He joined Schroders following
the acquisition of Cazenove Capital in July 2013. He was a senior
member of the pan-European equity team at Cazenove, having joined
in 2002. Prior to Cazenove, he was at HSBC Asset Management
(Europe) Ltd where he was responsible for several retail and
institutional pan-European portfolios.
Source: Schroders, January 2016.
Citywire rating awarded to Steve Cordell, as at 30 November 2015.
*Schroder International Selection Fund is referred to as Schroder ISF throughout this document.
Schroder International Selection Fund European Opportunities
The ‘business cycle’ investment approach
Schroders’ awards
Our investment process separates the stock universe into seven different style groups;
growth, growth defensive, value defensive, financials, consumer cyclicals, commodity cyclicals
and industrial cyclicals, each with specific sensitivities to certain macro drivers, which, along
with fundamental analysis, allow us to identify mis-priced securities.
The following chart illustrates the seven style groupings and their typical position at different
stages of the business cycle.
Slowdown
Recession
Recovery
Expansion
Style groups
Source: Professional Adviser, International Fund
& Product Awards 2015, Winner, Best International
Fund Group; Investment Europe ‘Investment Group of
the year’ 2014/2015; Funds Europe Awards, special
Commendation for European Asset Management
Company (AUM over €20bn).
Overweighting
Market
Underweighting
Growth
Growth defensive
Value defensive
Financials
Consumer cyclicals
Commodity cyclicals
Industrial cyclicals
Growth defensive
Value defensive
Financials
Growth
Consumer cyclicals
Commodity cyclicals
Industrial cyclicals
Industrial cyclicals
Consumer cyclicals
Financials
Growth
Commodity cyclicals
Growth defensive
Value defensive
Growth
Consumer cyclicals
Commodity cyclicals
Industrial cyclicals
Growth defensive
Financials
Value defensive
To learn more about Schroders’
Luxembourg domiciled fund ranges, visit:
We avoid any permanent investment style bias by managing the tilts towards these groupings
within the portfolio. In this way, the portfolio’s strategy can change over time because our
business cycle approach recognises that different stocks outperform at different stages of the
economic cycle and this should be reflected within the composition of the portfolio.
We combine our top-down macro view with bottom-up stock selection, driven by thorough
analysis of earnings change relative to the business cycle. Understanding the economy’s
progress through recession and expansion phases allows us to ascertain where we are in the
business cycle and tilt the portfolio accordingly. For example, cyclical stocks are overweighted
in the recovery and expansion phases whereas we will be overweight defensive stocks during
slowdown and recession phases. In between turning points we focus on bottom-up stock
selection looking for earnings revisions and inflection points in relative estimate revisions to
drive share prices.
Risk considerations
www.schroders.lu
About Schroders
€400.0bn managed across
equities, fixed income, multi-asset,
alternatives and real estate.
An extensive global network of
3,700+ employees.
37 offices in 27 countries across
Europe, the Americas, Asia and
the Middle East.
–– The capital is not guaranteed
–– Investments denominated in a currency other than that of the share class may not be
Over 200 years’ experience of
investment markets.
hedged. The market movements between those currencies will impact the share class
––
The fund will not hedge its market risk in a down cycle. The value of the fund will move
similarly to the markets.
Source: Schroders, as at 30 September 2015.
Key information
ISIN code
LU0995121059
Bloomberg code
SHEOAEA:LX
Date of inception
12 March 20141
Fund currency
Benchmark
Ongoing charges (latest available)2
Entry charge
Source: Fitch, ‘Highest Standards’ awarded to
Schroders on 1 April 2015.
EUR
MSCI Europe Net TR
1.92%
Up to 5% of the gross investment amount
All information in the table above is for the A Accumulation share class, for further share class information
please see the Prospectus.
1 Schroder ISF European Opportunities was launched on 12 March 2014 to accommodate a transfer of
shareholders from the Cazenove fund to the Schroder ISF SICAV. Prior to 12 March 2014 the fund uses the
track record of The Cazenove Pan Europe Fund (launched on 02 January 2003) as a performance track record.
ongoing charges figure shown here is an estimate of the charges because the fund was launched
2 The
recently and did not have a year’s expenses upon which to calculate the figure.
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 semi-annual
report, if published), copies of which can be obtained, free of charge, from Schroder Investment Management (Luxembourg) S.A. There will be no right to cancel any agreement
to purchase shares under section 6.7 of the UK Financial Services Conduct of Business Sourcebook. All or most of the protection provided by the UK regulatory system does not
apply to investments in the Company and compensation will not be available under the UK Financial Services Compensation Scheme. 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 Limited, 31, Gresham Street, EC2V 7QA, who is authorised and regulated by the Financial Conduct Authority. For your security,
communications may be taped or monitored. w48385