Schroder Recovery Fund 3,848 Value Global Recovery

#SICM18 @Schroders_UK

Schroder Value Investing – Focus on Value Schroders Investment Conference 2018, Manchester Kevin Murphy, Co-Head Global Value Team 22 May 2018 Marketing material for professional investors or advisers only. This material is not suitable for retail clients Don’t call it a comeback Despite recent volatility, market is within touching distance of peaks

FTSE 100 2000–2018

8,000

7,000

6,000

5,000

4,000

3,000

2,000 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18

Source: Schroders, Thomson Reuters Datastream, 1 January 2000 to 9 May 2018.

1 Everywhere we look, we see signs of risky behaviour You don’t see this at market troughs % of IPOs with negative earnings 100

1983 2004 1980 1981 1982 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Topdown Charts, Jay R. Ritter, March 2018 (data updated 27 December 2017).

2 Most money is lost when conditions and outlook are good How easily the market forgets…

Covenant-lite volume by rating $bn 400

350

300

250

200

150

100

0 2007 2011 2012 2013 2014 2015 2016 2017 BB or higher BB/B B B/CCC or lower and NR

Source: Jeffries.

3 Don’t believe the hype Why you should focus on cheap prices

10 year annualised return by starting cyclically adjusted P/E (CAPE) 12%

10%

0% ? -2%

-4% 0–7 7–14 14–21 21–28 28–35 35+

Past performance is not a guide to future performance and may not be repeated. Source: Global Financial Data and Thomson DataStream, as at 31 December 2017. Based on UK Equity market – since 1927.

4 In elevated markets, value investing is not easy The absolute opportunity is concentrated in a handful of sectors

Number of All-Share stocks cheap on cyclically adjusted profits Consumer Discretionary

Industrials

Materials

Energy

Financials

Information Technology

Real Estate

Telecommunication Services

Utilities

Consumer Staples

Health Care

0 20 40 60 80 100 120

Source: Schroders, Bloomberg data at 9 May 2018. Sectors shown are for illustrative purposes only and should not be viewed as a recommendation to buy or sell.

5 Performance comes with a catch Value investing doesn’t work all the time

Rolling 10 year relative performance % 70

-10

-30

-50 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 MSCI Global Value vs. Growth MSCI UK Value vs. Growth MSCI Europe Value vs. Growth

Past performance is not a guide to future performance and may not be repeated.

Source. Schroders, Morgan Stanley, Thomson Reuters DataStream, MSCI, data from 31 March 1987 to 31 December 2017.

6 Nothing worthwhile is easy Value’s rebound following underperformance has been significant

Cumulative outperformance of deep value 300%

250%

200%

150%

100%

50%

0% 1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 No. of months Cycle 1 Cycle 2 Cycle 3 Cycle 4 Cycle 5 Current cycle

Source: Bernstein Quantitative Services, U.S. Top 1,000 Universe, March 1971 to January 2018.

7 Schroder Global Value Team A complete product suite to leverage the value opportunity

UK Europe Global AUM (£m) Total

Schroder ISF* European Schroder ISF Recovery Schroder Recovery Fund 3,848 Value Global Recovery

Schroder ISF European Schroder ISF Strategy Income Schroder Income Fund 3,115 Equity Yield Global Equity Yield 13,347 Schroder Responsible Responsible 89 Value Fund

Schroder Income Schroder ISF European Schroder ISF Global Solution Maximisers Maximiser Dividend Maximiser Dividend Maximiser 5,326

Source: Schroders. AUM as at 31 December 2017. *Includes AUM for UK Institutional segregated portfolios (£970m). *Schroder International Selection Fund will be referred to as Schroder ISF throughout this presentation

8 Schroder Global Value Team A well-resourced franchise

Roberta Barr Andy Evans Analyst European Value Global and Europe European Yield

Investment experience: 1 yr Investment experience: 16 yrs History: Mathematics degree History: Economics degree, CFA Previously a Pan European equity analyst

Andrew Lyddon Nick Kirrage European Value Co-head Global Value team European Yield UK Income and UK Recovery Global Recovery Global Global Income and Global Recovery Investment experience: 12 yrs Investment experience: 16 yrs History: Chemistry degree, Intellectual Property History: Aeronautical Engineering degree, CFA. degree, CFA Value Previously a Pan European equity analyst Previously a Pan European equity analyst Team

Simon Adler Juan Torres Global Income Analyst Responsible Value Co-manager Institutional Value

Investment experience: 9 yrs Investment experience: 9 yrs History: MA Politics, CFA History: MBA, Finance and Foreign Affairs degree. Previously a Pan European equity analyst Previously an Emerging Markets equity analyst Kevin Murphy Co-head Global Value team UK Income and UK Recovery Global Recovery Investment experience: 17 yrs History: Economics degree, CFA Source: Schroders, 31 March 2018. Previously a Pan European equity analyst

9 Two recovery strategies. One familiar pattern of returns Only 30% commonality by weight between the funds

Cumulative return relative to benchmark Re-based to 100 150

140

130

120

110

100

80 Oct 06 Oct 07 Oct 08 Oct 09 Oct 10 Oct 11 Oct 12 Oct 13 Oct 14 Oct 15 Oct 16 Oct 17 UK Recovery strategy Schroder ISF Global Recovery

Past performance is not a guide to future performance and may not be repeated. Source: Schroders, net of fees. UK Recovery strategy A Acc in GBP relative to FTSE All-Share Index, from 31 October 2006 to 31 March 2018. Schroder ISF Global Recovery A Acc in USD relative to MSCI World Index, from 31 October 2013 to 31 March 2018. The performance is calculated for the portfolio. Individual performance may differ as a result of initial fees, the investment date, the date of reinvestment and dividend withholding tax.

10 We provide something genuinely different The screened sector has a clear bias towards quality

Deep-Value Core-Value Core Core-Growth Schroder Responsible Value UK Eqy

Aberdeen Responsible UK Equity

Castlefield B.E.S.T. Sust Inc Instl Giant EdenTree Amity UK

F&C Responsible UK Equity

F&C Responsible UK Income

Janus Henderson UK Responsible Inc

Large Jupiter Responsible Inc

Kames Ethical Equity

L&G Ethical Trust

Liontrust Sust Fut UK

Mid Liontrust UK Ethical

Premier Ethical

Royal London Sustainable Leaders

Royal London UK FTSE4Good Tracker

Source: Morningstar Direct, data as at 31 January 2018 (latest common date) report run 8 May 2018. For illustrative purposes only and not a recommendation to buy or sell shares.

11 Schroder Responsible Value UK Equity Fund A benchmark unconstrained product

Fund sector exposure Portfolio Index sector exposure Top 20 holdings weight %

Pearson 6.0 BP 5.9 Anglo American 5.3 HSBC 5.2 Royal Bank of Scotland 4.9 Royal Dutch Shell 4.8 Aviva 4.7 GlaxoSmithKline 4.7 Centrica 4.5 Barclays 4.4 Basic materials, 7.8% Tesco 4.4 Basic materials, 7.7% Consumer goods, 0.0% Consumer goods, 14.8% Standard Chartered 4.3 Consumer services, 20.7% Consumer services, 11.3% Wm Morrison Supermarkets 4.0 Financials, 31.9% Financials, 27.1% AstraZeneca 3.9 Healthcare¹, 10.6% Healthcare, 8.6% Lloyds Banking Group 3.5 Industrials, 0.0% Industrials, 10.8% Marks and Spencer Group 2.7 Oil and gas¹, 12.7% Oil and gas, 12.8% Technology¹, 2.2% BHP Billiton 2.5 Technology, 0.9% Telecoms¹, 4.4% Orange Belgium 2.2 Telecoms, 3.3% Utilities, 6.4% Vodafone Group 2.2 Utilities, 2.7% Cash, 3.3% Eni 2.1

Source: Schroders, FactSet, as at 31 March 2018. Index is FTSE All-Share Index. 1Includes overseas holdings (total overseas holdings 7.3%). Based on unaudited data. The sectors and securities shown above are for illustrative purposes only and should not be viewed as a recommendation to buy or sell.

12 The Value Perspective An extensive online resource for value investors

@Thevalueteam

thevalueperspective.com

13 Schroder Income Fund Schroder Recovery Fund Schroder Income Fund Performance as at 30 April 2018

Performance versus index in GBP % 1 year 3 years p.a. 5 years p.a. 10 years p.a. 10 years

Schroder Income Fund Z Acc 15.3 8.6 10.7 10.5 170.2

FTSE All-Share Index (TR) 8.2 7.0 7.8 6.7 90.9

Relative return +7.1 +1.6 +2.9 +3.8 +79.3

Rank1 1/85 8/80 9/78 4/55 4/55

Quartile1 1 1 1 1 1

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Schroder Income Fund Z Acc 16.7 1.1 -23.3 35.9 8.2 -8.1 26.2 33.5 4.9 -6.6 25.3 9.3

FTSE All-Share Index (TR) 16.8 5.3 -29.9 30.1 14.5 -3.5 12.3 20.8 1.2 1.0 16.8 13.1

Relative return -0.1 -4.2 +6.6 +5.8 -6.3 -4.6 +13.9 +12.7 +3.7 -7.6 +8.5 -3.8

Past performance is not a guide to future performance and may not be repeated. Source: Morningstar, bid to bid, net income reinvested, net of fees, as at 30 April 2018, based on Z Acc Units, GBP (A Acc prior to 1 June 2011). 1Rank and quartile based on Schroder Income Z Acc units within the IA UK Equity Income Sector. Source for ratings: Morningstar (please see Important Information at the end of this presentation), Square Mile, Rayner Spencer Mills, Fund Calibre and Citywire as at 30 April 2018.

15 Schroder Income Fund Calendar year performance

2017 2016 2015 2014 2013

Schroder Income Fund Z Acc 9.3 25.3 -6.6 4.9 33.5 FTSE All-Share Index (TR) 13.1 16.8 1.0 1.2 20.8

Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.

Schroder Income Fund – risk factors The fund may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the fund, both up or down, which may adversely impact the performance of the fund As a result of fees being charged to capital, the distributable income of the fund may be higher but there is the potential that performance or capital value may be eroded. The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses. Equity prices fluctuate daily, based on many factors including general, economic, industry or company news. In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares. Failures at service providers could lead to disruptions of fund operations or losses.

Source: Morningstar, bid to bid, net income reinvested, net of fees, as at 31 December 2017, based on Z Acc Units, GBP.

16 Schroder Income Fund positioning A benchmark unconstrained product

Fund sector exposure Portfolio Index sector exposure Top 20 holdings weight %

HSBC 5.4 Pearson 5.3 GlaxoSmithKline 5.1 BP 5.1 Anglo American 4.8 Centrica 4.5 Aviva 4.5 South32 4.1 Wm Morrison Supermarkets 4.0 Royal Bank of Scotland 4.0 Basic materials, 11.4% Cisco Systems 3.8 Basic materials, 7.7% Consumer goods, 0.0% Barclays 3.8 Consumer goods, 14.8% Consumer services, 20.9% Consumer services, 11.3% Standard Chartered 3.2 Financials, 30.5% Financials, 27.1% William Hill 2.9 Healthcare¹, 9.8% Healthcare, 8.6% Lloyds Banking Group 2.8 Industrials, 0.0% Industrials, 10.8% Marks and Spencer Group 2.8 Oil and gas, 9.9% Oil and gas, 12.8% Royal Dutch Shell 2.8 Technology¹, 7.0% Technology, 0.9% Telecoms, 1.5% AstraZeneca 2.6 Telecoms, 3.3% Utilities, 6.3% BHP Billiton 2.5 Utilities, 2.7% Cash, 2.6% Tesco 2.3

Source: Schroders, FactSet, as at 31 March 2018. Index is FTSE All-Share Index. 1Includes overseas holdings (total overseas holdings 11.1%). Based on unaudited data. The sectors and securities shown above are for illustrative purposes only and should not be viewed as a recommendation to buy or sell.

17 Schroder Income Fund activity Our typical holding period is around five years

Schroder Income Fund: Stocks bought or sold over 12 months to 31 March 2018

New purchases Complete sales

Sector Rationale

Eni Energy BAE Systems Fair value

Provident Financial Financials Staples Acquired

Source: Schroders, 31 March 2017 to 31 March 2018. The securities shown above are for illustrative purposes only and not to be considered a recommendation to buy or sell.

18 UK’s income culture means it remains relatively attractive In a world thirsty for income, the UK stands out

Australia UK EM Europe Nordic EM EMEA Europe ex UK EMU EAFE Canada EM LatAm Pacific MSCI AC WORLD Japan EM Asia USA

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Trailing dividend yield (%)

Source: Morgan Stanley, Thomson Reuters DataStream, 31 March 2018.

19 A dividend growth heritage Dividend grew 5.6% p.a. over the last 29 years (while growing capital)

Dividend distributions (pence per unit) 50p

40.7 40p

30p

20p

10p 8.3

0p 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Past performance is not a guide to future performance and may not be repeated. Source: Schroders to 30 October 2017. Dividends are paid twice per year in April and October. Data based on Schroder Income Fund A Inc shares as the Z share class was not launched until 2011.

20 The success of a Recovery approach Performance of the UK fund as at 30 April 2018

Performance versus index in GBP % 1 year 3 years p.a. 5 years p.a. 10 years p.a. 10 years

Schroder Recovery Fund Z Acc 11.7 8.0 10.6 11.7 201.8

FTSE All-Share Index (TR) 8.2 7.0 7.8 6.7 90.9

Relative return +3.5 +1.0 +2.8 +5.0 +110.9

Rank1 33/260 83/246 62/234 12/195 12/195

Quartile1 1 2 2 1 1

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Schroder Recovery Fund 20.5 -3.3 -26.9 50.0 15.9 -14.1 35.2 46.5 2.4 -12.5 31.1 8.1

FTSE All-Share Index (TR) 16.8 5.3 -29.9 30.1 14.5 -3.5 12.3 20.8 1.2 1.0 16.8 13.1

Relative return +3.7 -8.6 +3.0 +19.9 +1.4 -10.6 +22.9 +25.7 +1.2 -13.5 +14.3 -5.0

Past performance is not a guide to future performance and may not be repeated. Source: Morningstar, bid to bid, net income reinvested, net of fees, GBP as at 30 April 2018, based on Z Acc Units. 1IA UK All Companies peer group. Source for ratings: Square Mile, Fund Calibre, Fundhouse, Rayner Spencer Mills, City Financial and Morningstar (refer to additional disclaimers on Important Information page) as at 30 April 2018. Rank and quartile based on Schroder Recovery Z Acc units within the IA UK All Companies Sector.

21 Schroder Recovery Fund Calendar year performance

2017 2016 2015 2014 2013

Schroder Recovery Fund Z Acc 8.1 31.1 -12.7 2.2 46.2 FTSE All-Share Index (TR) 13.1 16.8 1.0 1.2 20.8

Schroder Recovery Fund – risk factors The fund may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the fund, both up or down, which may adversely impact the performance of the fund. The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses. The fund is not tied to replicating a benchmark and holdings can therefore vary from those in the index quoted. For this reason the comparison index should be used for reference only. Equity prices fluctuate daily, based on many factors including general, economic, industry or company news. In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares. Failures at service providers could lead to disruptions of fund operations or losses.

Source: Morningstar, bid to bid, net income reinvested, net of fees, GBP as at 31 December 2013 to 2017, based on Z Acc Units.

22 Schroder Recovery Fund Risk factors (continued)

The counterparty to a derivative or other contractual agreement or synthetic financial product could become unable to honour its commitments to the fund, potentially creating a partial or total loss for the fund. A derivative may not perform as expected, and may create losses greater than the cost of the derivative. The fund uses derivatives for leverage, which makes it more sensitive to certain market or interest rate movements and may cause above-average volatility and risk of loss.

23 Schroder Recovery Fund A benchmark unconstrained product

Fund sector exposure Portfolio Index sector exposure Top 20 holdings weight %

Anglo American 6.0 Pearson 5.5 HSBC 5.2 Barclays 5.2 Royal Bank of Scotland 5.0 South32 5.0 Standard Chartered 4.8 BP 4.6 Centrica 4.5 GlaxoSmithKline 4.0 Basic materials, 11.6% Wm Morrison Supermarkets 4.0 Basic materials, 7.7% Consumer goods, 0.0% Consumer goods, 14.8% Lloyds Banking Group 3.5 Consumer services, 17.2% Consumer services, 11.3% Aviva 2.9 Financials, 32.0% Financials, 27.1% Healthcare, 6.1% Marks and Spencer 2.7 Healthcare, 8.6% Industrials, 2.2% Cisco Systems 2.6 Industrials, 10.8% Oil and gas, 6.6% Drax Group 2.6 Oil and gas, 12.8% Technology¹, 5.8% AstraZeneca 2.0 Telecoms, 0.0% Technology, 0.9% Royal Dutch Shell 1.9 Utilities, 7.2% Telecoms, 3.3% Tesco 1.8 Cash, 11.3% Utilities, 2.7% Provident Financial 1.6

For illustrative purposes only and should not be viewed as a recommendation to buy or sell. Source: Schroders, FactSet, as at 31 March 2018. Based on unaudited data. 1Includes direct overseas holdings.

24 Valuation takes time to be reflected in share prices Our typical holding period is around five years

Schroder Recovery Fund: Stocks bought or sold over 12 months to 31 March 2018

New purchases Complete sales

Sector Rationale

Consumer William Hill Staples Acquired discretionary

Provident Financial Financials Future Reappraisal

Sports Direct Reappraisal

Vodafone Group Fair value

Coats Group Fair value

Stock examples are for illustrative purposes only and not a recommendation to buy or sell securities. Source: Schroders, 31 March 2017 to 31 March 2018.

25 Thank you Appendix How to ensure clients benefit from the bounce Go global. Value can be found in all sectors

Number of global stocks cheap on cyclically-adjusted profits

Consumer Discretionary

Industrials

Materials

Energy

Financials

Information Technology

Real Estate

Telecommunication Services

Utilities

Consumer Staples

Health Care

0 20 40 60 80 100 120

Source: Schroders, data at 20 February 2018. Sectors shown are for illustrative purposes only and should not be viewed as a recommendation to buy or sell.

28 The Global Value Team Similar thinking, distinct portfolios

Commonality by portfolio weight (%) and number of common holdings

UK Global Global European European Value strategy Responsible UK Income UK Recovery Income Recovery Yield Value Value 25% 30% 32% 33% 70% 76% UK Recovery 100 8 12 10 11 24 30

29% 30% 36% 35% 81% UK Income 100 10 12 12 12 29

UK Responsible 29% 29% 40% 38% 100 Value 10 11 13 13 37% 35% 63% European Value 100 13 17 23

37% 26% European Yield 100 13 12

34% Global Recovery 100 14

Global Income 100

Source: Schroders, FactSet, as at 31 March 2018.

29 Schroder Responsible Value UK Equity Fund ESG effects are identified, quantified and used to generate value for our clients

Examples of how this may impact on our stock judgement… Factor Reward Risk

– Environmental costs may impact – Heavy polluters may have a E long-term profit assumptions higher risk score

– Unsustainable employee relations – Industries with uncertain tax S may impact our long-term profit regimes (e.g. gambling) may margin assumptions have higher risk

– Poor management investment – Aggressive accounting or a lack G decisions may lead us to write of checks and balances may down balance sheet assets impact our risk score

30 What changes did we make to the fund? The exclusions had a limited effect

We bought three new stocks that were already held in other funds run by the Value Team

New purchases

Sector Held elsewhere by Value Team Upside1 Risk score Sanofi Health care 18% 4 Eni Oil and Gas 39% 5 Orange Belgium Telecoms 65% 5 Average 41% 4.7

Complete sales

Complete sales Sector Rationale Upside1 Risk score

BAE Systems Industrials Excluded by screen -7% 3 Qinetiq Industrials Excluded by screen 55% 2 South 32 Materials Excluded by screen 60% 3 Average 36% 2.7

Source: Schroders, 31 March 2017 to 31 March 2018. 1Upside to fair value, based on team estimate. Fund name changed on 14 February 2018, previously named Schroder Specialist Value UK Equity Fund. The securities shown above are for illustrative purposes only and not to be considered a recommendation to buy or sell.

31 Is passive a solution? The Value ETF is a poor proxy for value

MSCI World Value index, market cap vs. weight Weight %

3.0

2.5

2.0

1.5

1.0

0.5

0.0 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000

Free-float market capitalisation (USD billions)

Source: Schroders, Bloomberg. Reported data at 31 March 2017.

32 Disclaimer

Marketing material for professional investors or advisers only. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall. The views and opinions contained herein are those of Nick Kirrage and Kevin Murphy, Co-heads of the Global Value team, views are subject to change and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy. Nothing in this material should be construed as advice or a recommendation to buy or sell. Information herein is believed to be reliable but we do not warrant its completeness or accuracy. Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data. The material is not intended to provide, and should not be relied on for accounting, legal or tax advice. Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. No responsibility can be accepted for error of fact or opinion. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. For the purposes of the Data Protection Act 1998, the data controller in respect of any personal data you supply is Schroder Investment Management Limited. Personal information you supply may be processed for the purposes of investment administration by any company within the Schroders Group and by third parties who provide services and such processing and which may include the transfer of data outside of the European Economic Area. Schroder Investment Management Limited may also use such information to advise you of other services or products offered by the Schroder Group unless you notify it otherwise in writing.

Disclaimer

Schroder Income Fund – risk factors: The fund may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the fund, both up or down, which may adversely impact the performance of the fund. As a result of fees being charged to capital, the distributable income of the fund may be higher but there is the potential that performance or capital value may be eroded. The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses. Equity prices fluctuate daily, based on many factors including general, economic, industry or company news. In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares. Failures at service providers could lead to disruptions of fund operations or losses.

Schroder Recovery Fund – risk factors:

The fund may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the fund, both up or down, which may adversely impact the performance of the fund. The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses. The fund is not tied to replicating a benchmark and holdings can therefore vary from those in the index quoted. For this reason the comparison index should be used for reference only. Equity prices fluctuate daily, based on many factors including general, economic, industry or company news. In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares. Failures at service providers could lead to disruptions of fund operations or losses. The counterparty to a derivative or other contractual agreement or synthetic financial product could become unable to honour its commitments to the fund, potentially creating a partial or total loss for the fund. A derivative may not perform as expected, and may create losses greater than the cost of the derivative. The fund uses derivatives for leverage, which makes it more sensitive to certain market or interest rate movements and may cause above-average volatility and risk of loss.

34 Disclaimer

Schroder Responsible Value UK Equity Fund – risk factors:

Equity prices fluctuate daily, based on many factors including general, economic, industry or company news. The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses. A derivative may not perform as expected, and may create losses greater than the cost of the derivative. The counterparty to a derivative or other contractual agreement or synthetic financial product could become unable to honour its commitments to the fund, potentially creating a partial or total loss for the fund. In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares. Failures at service providers could lead to disruptions of fund operations or losses

FTSE Third Party Data Disclaimer: FTSE International Limited (“FTSE”) © FTSE. “FTSE®” is a trade mark of London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited under licence. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE's express written consent.

MSCI Third Party Data Disclaimer: Third party data is owned or licensed by the data provider and may not be reproduced or extracted and used for any other purpose without the data provider's consent. Third party data is provided without any warranties of any kind. The data provider and issuer of the document shall have no liability in connection with the third party data. The Prospectus and/or www.schroders.com contains additional disclaimers which apply to the third party data.

35 Disclaimer

Morningstar: © 2018 Morningstar UK Ltd. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. For more detailed information about Morningstar's Analyst Rating, including its methodology, please go to: http://corporate.morningstar.com/us/documents/MethodologyDocuments/AnalystRatingforFundsMethodology.pdf

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36 Contact Kevin Murphy, Co-Head Global Value Team T +44 (0)207 658 6587 [email protected] Schroder Investment Management Limited, 31 Gresham Street, London EC2V 7QA.

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