Global investment manager Schroders announced today the launch of several new sustainable investment funds. The new offerings include a digital infrastructure fund, a sustainable bond fund, and a UK Unit Trust for its European Sustainable Equity fund.
The Digital Infrastructure Fund is the latest addition to the Schroders Global Transformation Range of thematic strategies. The fund is a UK unit trust investing in companies facilitating a sustainable transition to a digital economy. The fund’s managers will apply an active investment approach focused on identifying digital infrastructure companies backed by physical assets, focusing on areas that form the backbone of connectivity, including fibre-optic cables, macro towers, data centers, and small cells.
The fund will be managed by co-Fund Managers Hugo Machin and Tom Walker. Machin and Walker said:
“Digital infrastructure has a key role to play in promoting economic competitiveness, social inclusion, and reducing energy consumption. We believe digital infrastructure is the fourth utility such is its importance to society, and for many businesses and governments, it is ‘mission-critical. In our view, we are in the early stages of the digital transformation, this provides a compelling growth opportunity for companies that are at forefront of this transformation and the true value of digital infrastructure is not fully appreciated by the market.”
“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, which meet 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 investors.”
The Schroder Sustainable Bond fund is designed to provide investors with returns through sustainable investment across the full spectrum of global fixed income markets. The fund will harness the company’s thematic fixed income investment process to invest in both sovereign and corporate debt across developed and emerging markets. At the core of the strategy is an approach to defining a sustainable investment universe of sovereign markets.
Countries targeted for investment include those making progress towards meeting the United Nations Sustainable Development Goals, those with net zero policies, and those whose political and civil freedoms support sustainable growth. The fund will aim to deliver a total return of 2.5% per annum over the ICE BofA Sterling three-month Government Bill index, over a three-to-five-year cycle.
Paul Grainger, Head of Global Fixed Income and Currency, Schroders, said:
“For the Schroder Sustainable Bond Fund, we have developed a rigorous and transparent methodology for analyzing sovereign sustainability. This complements our well-established sustainable credit approach and allows us to build holistic fixed income portfolios, which can provide our clients with long-term and diversified sustainable returns.”
Schroders’ European Sustainable Equity fund aims to enable clients to harness long-term outperformance driven by ESG factors. First launched in 2019, the European Sustainable Equity fund combines investment research with Schroders ESG investment frameworks CONTEXT and SustainEx. CONTEXT aims to identify companies with sector-leading sustainability profiles, and those classified as “improving” while screening out those that derive 10% of earnings from tobacco, weapons, fossil fuels, alcohol, or gambling. SustainEx enables Schroder’s investors to put a financial value on all the impacts that companies have on society.
Nicholette MacDonald-Brown and Scott MacLennan, Fund Managers, commented:
“The product is an option for clients seeking a concentrated, active solution with a thorough process for assessing a company’s impact on society and its ability to manage key relationships long term.”