Schroders is announcing the expansion of its sustainability offering with three new specialist funds giving UK clients access to investment opportunities in Sustainable European companies, Digital Infrastructure and Sustainable Fixed Income opportunities.

The firm has received regulatory and unitholder approval to repurpose its existing European Alpha Income, Global Cities Income and Absolute Return Bond funds into the new strategies.

Doug Abbott, Head of UK Intermediary, Schroders, commented on the announcement:

“Over the past 12 months, UK domiciled sustainable funds achieved £37.1 billion[1] in sales – a significant indication that UK investor demand for sustainable investment solutions has exponentially accelerated over the past few years. Looking ahead, we expect sustainable and impact investing to become a cornerstone of many UK investors’ portfolios. In response to this rising demand, Schroders ambition is to be a leading provider of sustainable funds, solutions and investment trusts to UK investors.

I am delighted that we will now offer a range of eight UK domiciled funds which are focused on sustainability and thematics, a range of sustainable model portfolios available for advisors as well as the award winning Schroder BSC Social Impact Investment Trust. Schroders has also recently announced its intention to acquire a majority stake in Greencoat Capital. The range is further supported by our proprietary sustainability tools, SustainEx and Context which have been designed to identify and measure ESG related risks.”

The Schroder Unit Trust Digital Infrastructure fund is part of Schroders Global Transformation Range. It aims to deliver long-term capital growth by investing in companies that have a sustainable philosophy and own mission critical infrastructure to drive the transformation to a digital economy.

Tom Walker and Hugo Machin, Co-Fund Managers, Schroder Digital Infrastructure Fund, commented:

“Digital infrastructure has a key role to play in promoting economic competitiveness, social inclusion and reducing energy consumption. We believe that digital assets are mission critical and in our view, provides a compelling growth opportunity for companies that are at forefront of this transformation, but where their potential is yet to be reflected in share prices.

“By utilising Schroders extensive research and ESG capabilities, our aim is to select companies that practice good governance and have demonstrated a commitment to sustainability, as set out in the fund’s sustainability criteria. We are confident that, combined with our focus on companies backed by physical assets, we can deliver strong long-term capital growth for our shareholders.”

The Schroder European Sustainable Equity fund, has been designed to offer clients the opportunity to harness long-term outperformance driven by Environmental, Social and Governance (ESG) factors. The Fund, which was first launched as a Luxembourg domiciled strategy in 2019, combines extensive bottom-up investment research with Schroders award-winning ESG investment frameworks CONTEXT and SustainEx.

Nicholette MacDonald-Brown, Portfolio Manager, Schroder European Sustainable Equity Fund  commented:

“We established our European Sustainable fund over three years ago and we are pleased to bring this strategy directly to UK based clients.  We believe that this strategy is a compelling proposition for UK investors who are looking to harness sustainable outperformance.”

The newly launched fund, managed by Schroders Fixed Income and Currency team, will harness Schroders well-established top down thematic fixed income investment process to invest in both sovereign and corporate debt across developed and emerging markets.

Remaining closely aligned to principles set out in The United Nations Sustainable Development Goals, the fund’s selection process is focused on countries that have in place policies that are supportive of sustainable growth and net-zero ambitions.  

See related article: ESG ‘Bubble’ Is a Risk in Crowded Climate Bet, Schroders CIO Says

Paul Grainger, Portfolio Manager, Schroder Sustainable Bond Fund, commented:

“This is a great opportunity for investors who are looking to diversify their portfolio with a specialist bond investment. The strategy will benefit from the strength and depth of Schroders fixed income and sustainable investment experts to deliver a rigorous and transparent approach to sustainable investing across both sovereign and corporate debt.”

In 2021, Schroders successfully integrated Environmental, Social and Corporate Governance (ESG) factors across all of its investment desks. In practice, this means that ESG is considered in all investment analysis and decisions across every asset class.

Schroders has also published its Climate Transition Action Plan, a comprehensive strategy which outlines how Schroders will achieve net zero by 2050.

The firm has also committed to including a sustainability data at individual fund level in it’s next Assessment of Value, further demonstrating its commitment to enhancing the transparency of investment information for its clients.

These funds are offered alongside Schroders flagship UK Strategies; Schroder Global Energy Transition, Schroder Global Sustainable Growth, Schroder UK Sustainable Equity, Schroder Global Sustainable Value, Schroder Global Cities and also follows the successful IPO of Schroder BSC Social Impact Trust plc in December.

Source: Schroders