Schroders Enters European Active ETF Market
UK asset manager Schroders is finally stepping into the European active ETF space with strategies focused on global equity and investment-grade corporate bonds.
The Schroder Global Equity Active UCITS ETF is set to be listed at Deutsche Boerse starting September 26, alongside the Schroder Global Investment Grade Corporate Bond Active UCITS ETF. Following this, the ETFs will also be available on the London Stock Exchange, six Swiss Exchanges, and Borsa Italiana.
The equity strategy will be overseen by Lucas Cumblvicius, who co-leads Schroders’ Quantitative Equity Products (QEP) team. This approach, which has a notable $24 billion in assets, draws on a robust 25-year history of the QEP Global Core Strategy.
This strategy aims to achieve annual relative returns of 1% against the MSCI World Index, emphasizing controlled risk. According to the company, it has outperformed in 20 out of its 25 years since it began.
On the other hand, the bond strategy mirrors a $3 billion corporate bond initiative that has been active through segregated obligations for the last six years.
Utilizing systematic inputs and fundamental research, this bond approach seeks to generate returns above the Bloomberg Global Aggregate Index (hedged in USD). The company reports an annual relative return of 1.4% since its inception, with limited tracking errors.
Johanna Kyrklund, Schroders’ Chief Investment Officer, expressed enthusiasm about the launches, stating that Schroders is bringing over 220 years of active investment expertise to the European active ETF landscape.
In a dynamic market, she noted, having access to top-flight active management is crucial. These new products enable clients to take advantage of the flexibility and accessibility that ETFs offer, along with the potential benefits of active management.
Before the company’s inaugural ETF launch in Europe, Avni Thakrar-Neeliah, who heads the group’s product strategy, emphasized, “If you have a strong belief in a strategy, that’s great, but the challenge with ETFs can arise when there’s a high influx.”
Schroders’ move into the European ETF market follows its previous expansion into Australia’s active ETF sector in 2016 and a subsequent launch in the US in collaboration with Hartford Fund.
