Notification of changes to the underlying fund of J71 Schroder Japanese Opportunities

15 Jul 2022

We have been notified by Schroder Investment Management (Europe) S.A.  (“Schroders”) of the following upcoming changes to the underlying fund Schroder ISF Japanese Opportunities, which is the underlying fund of our Mirror Fund J71 Schroder Japanese Opportunities (the “Affected Mirror Fund”). These changes will take effect from 1 September 2022 (the “Effective Date”).

Summary of the changes to the underlying fund 

Schroders has advised that from the Effective Date the underlying fund of the Affected Mirror Fund will incorporate binding environmental and/or social characteristics, within the meaning of Article 8, under the EU’s Sustainable Finance Disclosure Regulation (“SFDR”). Article 8 funds are those that promote social and/or environmental characteristics, invest in companies that follow good governance, give binding commitments but do not have a sustainable investment objective.

Details of the environmental and/or social characteristics and how it seeks to achieve them will be disclosed in the investment policy of the underlying fund in a new section called “Sustainability Criteria” under the “Fund Characteristics” section in the fund details of the updated prospectus, which will be available after the Effective Date. 

From the Effective Date, the underlying fund:

• will actively manage and invest at least two-thirds of its assets in equity and equity related securities of Japanese companies.
• will seek to identify and invest in undervalued stocks by estimating their fair value based on predicted returns over the medium to long term.
• may also invest up to one-third of its assets directly or indirectly in other securities (including other asset classes), countries, regions, industries or currencies, investment funds, warrants and money market investments, and hold cash (subject to the restrictions provided in Appendix I of the underlying fund prospectus).
• may use derivatives with the aim of achieving investment gains, reducing risk or managing the underlying fund more efficiently.
• will maintain a higher overall sustainability score than the Tokyo Stock Exchange 1st Section (TOPIX) (Net TR) index, based on the investment manager of the underlying fund’s rating criteria.
• does not directly invest in certain activities, industries or groups of issuers above the limits listed under “Sustainability Information” on the underlying fund’s webpage.

For full details of the changes, including the updated investment policy, please refer to the Schroders shareholder notification opposite.

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