Notification of changes to the underlying fund of R148 Schroder ISF US Smaller Companies Impact (USD)
12 Apr 2024
We have been notified by the directors and the management company of Schroder International Selection Fund (the “Company”) of the following changes to the underlying fund of our R148 Schroder ISF US Smaller Companies Impact (USD) investment-linked policy sub-fund (the “ILP sub-fund”). These changes took effect from 14 March 2024 (the “Effective Date”).
Summary of Changes
The investment objective, policy, and sustainability criteria of the underlying fund of the ILP sub-fund have been updated and enhanced to better reflect the impact investment process used by the Company. In addition, the comparator benchmark of the underlying fund of the ILP sub-fund has been removed.
Updates to investment objective, policy and sustainability criteria
Under the EU Sustainable Finance Disclosure Regulation (“SFDR”) the underlying fund of the ILP sub-fund is classified as an Article 9 fund and invests in sustainable investments, which are investments that are expected to contribute towards the advancement of an environmental or social objective linked to one or more of the UN Sustainable Development Goals (“SDGs”).
The underlying fund of the ILP sub-fund also holds investments that the Investment Manager of the underlying fund deems to be neutral under its sustainability criteria, such as cash and money market investments and derivatives used with the aim of reducing risk (hedging) or managing the underlying fund of the ILP sub-fund more efficiently. The underlying fund of the ILP sub-fund is part of the Company’s Impact Driven strategies, and as such, it applies highly selective investment criteria. References to reflect this impact investment process have been added to the investment objective, investment policy, sustainability criteria and the pre-contractual disclosure of the underlying fund of the ILP sub-fund.
Removal of comparator benchmark
The underlying fund of the ILP sub-fund transitioned from SFDR Article 8 to SFDR Article 9 on 16 August 2022. The S&P Small Cap 600 (Net TR) Lagged Index was a comparator benchmark of the underlying fund of the ILP sub-fund before this transition, as this benchmark was appropriate when using the sustainability scoring system for Article 8 accreditation. However, following the transition of the underlying fund of the ILP sub-fund to Article 9, the underlying fund of the ILP sub-fund no longer applies a sustainability scoring method and the S&P Small Cap 600 (Net TR) Lagged Index is no longer relevant as a comparator.
Please refer to the sample client communication opposite for full details of the changes applicable.
The Company state that there are no other changes to the investment style, investment philosophy, investment strategy and the operation and/or manner in which the underlying fund of the ILP sub-fund is being managed following these changes. All other key features of the underlying fund of the ILP sub-fund, including the relevant risk indicators, remain the same.
We have contacted impacted policyholders and their financial advisers to notify them of the changes; primarily by e-shot, with letters sent by post where we do not hold a valid email, and to those who prefer to receive letters by post.
These changes have happened automatically within affected policies and policyholders do not need to take any action. We recommend that policyholders seek the advice of their usual financial adviser before making any investment decisions.
Should you have any questions regarding these changes, please contact the Investment Marketing Team.
