Notification of changes to the underlying fund of Schroder Global Multi-Asset Income funds

10 Apr 2024

• L37 Schroder Global Multi-Asset Income (GBP HDG)
• L41 Schroder Global Multi-Asset Income (USD)

(Together the “Affected Mirror Funds”) 

We have been notified by the directors and the management company of Schroder International Selection Fund (the “Company”) of upcoming changes to the investment objective and comparator benchmark of the underlying fund of the Affected Mirror Funds. These changes will take effect from 8 May 2024 (the “Effective Date”).

Background and rationale 

According to the Company, for over a decade market conditions enabled explicit income ranges to be featured in the objective of the underlying fund of the Affected Mirror Funds to indicate what an investor could expect as a distribution. However, with the winding down of government quantitative easing, yields have risen sharply and interest rate volatility is unlikely to remain as static going forwards. As a result, the level of income the underlying fund of the Affected Mirror Funds is able to generate could change significantly and move outside of the target range.

Investment objective changes

In order to prevent the actual dividend payments of the underlying fund of the Affected Mirror Funds from falling outside of the target range, the income target of 3 - 5% per annum will be removed from the investment objective of the underlying fund of the Affected Mirror Funds from the Effective Date. Accordingly, the performance of the underlying fund of the Affected Mirror Funds will no longer be assessed against such income target.

The underlying fund of the Affected Mirror Funds will continue to aim to deliver income in addition to capital growth, but the reference to a three to five year period in respect of capital growth will be removed from the investment objective of the underlying fund of the Affected Mirror Funds.

Update on the use of comparator benchmark

The existing comparator benchmark of the underlying fund of the Affected Mirror Funds, which is presently used for volatility and sustainability purposes, will also be used as a performance comparator from the Effective Date.

Please refer to the Appendix opposite for full details of the changes applicable.

These changes will happen automatically within affected policies and policyholders do not need to take any action.  

Should you have any questions regarding these changes, please contact the Investment Marketing Team.