Key Features of the Schroders Investment Trust ISA March 2019

The Financial Conduct Authority is the independent financial services regulator. It requires us, Schroders, to give you this important information to help you decide whether our investment trusts are right for you. You should read this document carefully so that you understand what you are buying, and then keep it for future reference.

Contents

About this Key Features document______2 Schroders’ range of investment trusts______2 Investment Trust ISA investments______2 How do I invest?______3 The risks______3 Cancellation______4 Income______4 Charges and expenses information______5 Switching______5 Selling______5 Transferring______5 General information ______6 Complaints ______6 Glossary ______7

Investment Trust ISA Key Features 1 About this Key Features document

Schroders are required to provide you with important information to help you decide whether our Investment Trusts are right for you.

You should read this document carefully in addition to the Key Information Document so that you understand what you are buying, and then keep it for future reference.

If, however, there is further information you require or you would like to learn more about the investment trusts, please contact your financial adviser or Schroders on 0800 718 777*. Please note that at Schroders we can only provide you with information on our funds and are not able to advise you as to what investment trust is most suitable for you. For advice you should contact your financial adviser. If you do not have a financial adviser you can find one at www.schroders.co.uk/unbiased

*Please note, for your security, calls to Schroders may be recorded. Schroders’ range of investment trusts

Investment trust is used in this Aims documentation to describe a listed An investment trust aims to increase investment company that owns a portfolio capital and/or income for its shareholders of investments managed by Schroders. by investing in the shares of different The investment trusts available in the companies, which enables shareholders Schroders Investment Trust ISA include to access a wider range of stocks than UK investment trusts and overseas they would normally be able to invest in investment companies, but all are and so benefit from holding a diversified listed on the London Stock Exchange. portfolio of shares in a single investment. The Schroders Investment Trust ISA is Each investment trust has a specific aim, categorised as a stocks and shares ISA. which determines the types of shares or securities in which it invests. These are

detailed on each of the investment trust

information pages.

Investment Trust ISA investments

How much can I invest in an ISA? Your commitment The annual ISA allowance for the tax year To invest you will need a lump sum 2019/2020 is £20,000 which can be split investment of at least £1,000. If you wish between a cash ISA and a stocks and to top up your investment you can do shares ISA as the investor wishes. Where so with any amount over £500. As an an investor subscribes to both a cash ISA alternative, you may invest a minimum and a stocks and shares ISA the amount of £50 a month. You can start and stop subscribed must not exceed the overall investing whenever you like by informing subscription limit of £20,000. us in writing. The Schroders Investment Trust ISA There is no minimum term that you must The Schroders Investment Trust ISA allows hold your investments for, although you you to invest up to £20,000 in a stocks and should note that if you sell your shares shares component (Schroders does not shortly after purchasing them you are offer a cash ISA). likely to make a loss on your initial capital due to the difference between the buying

and selling price.

2 Investment Trust ISA Key Features How do I invest?

Complete and return application form will not normally be the same as the number 1 in the application form booklet. value of the underlying investments in the portfolio, known as the net asset value Who do I make the cheque payable to? per share. If the price is higher than the net You should make your cheque payable to asset value, you are paying a premium, if “Schroder Unit Trusts Limited”. the price is lower, you are buying shares at When will my direct debit be collected? a discount. Your direct debit will be collected on or What documentation will I receive? around the 10th of each month. ISA Shortly after you invest you will receive direct debits will automatically rollover a confirmation letter and contract note, into the next tax year unless you notify which should be returned as instructed. It us differently. will show the price and date at which you When will my investment be opened? have bought your shares. We do not issue We will invest your money on the day we share certificates so we suggest that you receive your application, if it is before retain the contract note. 12 noon, or otherwise on the following A statement will be sent twice a year as at working day. 5 April and 5 October. How are share prices of the trusts determined? The price you pay for shares will be determined by the market makers on the basis of the supply and demand for the shares. The price that you pay per share The risks

If you invest in investment trusts you – Market risk: there is the risk of losses should be aware that there are risks due to changes in market prices. involved. – Liquidity risk: the risk that a position Most importantly you may not get back cannot be liquidated (sold) in a timely what you originally invested when you manner at a reasonable price. sell. Both your initial capital sum and the income the investment may pay, can go – Inflation risk: inflation will reduce the down as well as up due to price changes purchasing power of your money in the financial markets outside Schroders’ in the future. control. – Change in tax regime: the favourable You should be aware that the past treatment of ISAs may not be maintained. performance of your investment is not an indicator of its future performance. – The share price of an investment trust will not always reflect the underlying value of the investments in its portfolio. This is because the share price is determined by the demand for and supply of shares traded on the stockmarket and not the value of the trust’s investments. If the share price is higher than the net asset value per share, the shares are said to be trading at a premium and if it is lower, they are said to be trading at a discount. Therefore, shareholders may realise returns which are lower or higher than the net asset value performance of the shares in the investment trusts.

Investment Trust ISA Key Features 3 Cancellation

Will I have cancellation rights? If you have received advice from an authorised financial adviser, you are entitled to a ‘cancellation’ period of 14 days, from the receipt of your notice of cancellation rights. During this time, if you change your mind, simply complete and return the cancellation form (which will be sent to you with your confirmation letter). We will sell the investments made on your behalf and send you the proceeds including a refund of any initial charges, less any fall in the share price. If you change your mind during the cancellation period, you will be able to open another ISA of the same type in the same tax year. However, if you change your mind after 14 days, you will have to sell your ISA, and will not be allowed to open another stocks and shares ISA in the same tax year. Income

How and when will I receive What are the tax advantages? my income? Any income you receive, or is When a trust pays a dividend it will accumulated, will not be liable to further automatically be re-invested on the income tax, irrespective of your tax payment date to purchase further shares status. Income tax suffered on interest in the trust in which you have invested distributions/ accumulations will be to maximise the potential long term reclaimed by Schroders on your behalf. investment returns. When you eventually come to sell your investment, there will be no chargeable If you would like to have your dividends gain or allowable loss arising in respect of paid out to you, you must select this Capital Gains Tax. option on the application form you complete. Income will then be paid directly to your bank/building society account on the dividend payment date. You may change your choice by providing us with the relevant details of the changes you would like to make.

What do I have to tell HM Revenue Can I add to my investment? and Customs? Yes. Let us know in writing how much you Nothing – you do not have to declare ISAs wish to add and into which investment in your tax return. trust (or trusts) and send us a cheque made payable to Schroder Unit Trusts Can I invest if I am living abroad? Limited quoting your account number. You cannot open an ISA whilst living or Please remember, you cannot exceed your working abroad unless you are a Crown £20,000 annual contribution limit. Employee or the spouse of, or in a civil partnership with a Crown Employee working abroad. You can invest in an ISA before you go, but you cannot make any further contributions to it whilst you are living abroad.

4 Investment Trust ISA Key Features Charges and expenses information

What are the charges? In addition to the charges that are set out in the Key Information Document, Schroders shall also be entitled to levy an annual ISA charge of 0.5% + VAT per annum. The charge is calculated and deducted every six months on a pro rata basis from your holding at which point we will sell a proportion of your holding.

Switching

Can I switch between trusts once my ISA is open? Yes. You can instruct us in writing to switch between investment trusts. The investment trust shares will be sold at the relevant share price and new shares will be bought subject to stamp duty of 0.5% (except for Schroder Oriental Income Fund Limited) and a 0.5% dealing charge. Selling

How do I sell my ISA and how quickly Do I have to keep my investment for will I get my proceeds? a minimum length of time? You can instruct Schroders to sell shares in No, you can sell all or part of your writing, by telephone or by signed fax. We investment whenever you like, subject to will sell your holdings on the day of receipt a 0.5% dealing charge. If you do want to of your instructions, subject to a 0.5% sell part or all of your investment, simply dealing charge, provided they are received write and let us know. Remember, it is the before 12 noon. We will then send a cheque contributions into your ISA which count for the proceeds to you on or by the close towards the annual limit of £20,000. Once of business four working days later. If (after you have withdrawn cash from your ISA you have sold your shares) you have less you will be unable to put it back in the than the minimum investment of £1,000 same tax year. we reserve the right to sell your remaining shares on your behalf. Transferring

Can I transfer my ISA investments the current tax year. This may mean that between different managers? if the value of your current year’s ISA is If you have taken out an ISA in the current lower than the sum of your current year’s tax year, the rules require you to transfer contributions, we may have to transfer out your entire ISA holding for that tax investments from a previous year’s ISA to year. Because Schroders previously make up the difference. However, if you merged investment trust ISAs from hold ISAs from previous tax years, you can different tax years, it will not always be indicate how much of your accrued ISA possible for us to transfer your precise investments you wish to transfer. investments from a specific tax year. For To make such a transfer, please complete transfer purposes, Schroders calculates application form number 2 from the your current tax year’s ISA holding as application form booklet. the total of all your contributions over

Investment Trust ISA Key Features 5 General information

Who is the plan manager of my ISA? Schroders can also give you information The ISA manager is Schroder Unit Trusts about dividends that have been paid as Limited, 1 London Wall Place, London well as arranging for you to receive copies EC2Y 5AU. Schroder Unit Trusts Limited is of the Annual Reports, if required. authorised and regulated by the Financial What is my best source of information Conduct Authority (FCA) and is entered about my ISA? on the Financial Services register under Please contact Schroders for the Annual register number 197288. The principal Report and Accounts and the monthly business of the plan manager is the Investment Trust Factsheets. These are provision of ISA administration services available free of charge. The monthly and marketing of unit trusts. factsheets can be found at www. Who is the administrator of the schroders.co.uk. All other information Schroders Investment Trust ISA? about Schroders’ investment trusts is DST Financial Services Europe Ltd available on request from Schroders at administers your investment on behalf the following address: Schroders Investor of Schroder Unit Trusts Limited. Services, PO Box 1102, Chelmsford CM99 2XX. Telephone number: 0800 718 777*. What is the ISA administration address? Schroders Investor Services, PO Box 1102, Where can I find the latest prices Chelmsford CM99 2XX. for my investment trust? Prices can be found on the internet at: Where can I find out about the net www.schroders.com/en/uk/private- asset value, premium or discount? investor/fund-centre/funds-in-focus/ The net asset value of each investment investment-trusts/ trust is published daily and is available from www.schroders.co.uk or each trust’s How much will any advice cost? individual website (details on pages 5 to We only provide you with information 13). Information about the share price about Schroders’ products and will not and the dividend is also available from offer any advice based on individual www.schroders.co.uk. Alternatively, circumstances. If you are in doubt as information is available monthly from to whether a product is suitable, you the Association of Investment Companies should consult a financial adviser. (020 7282 5555). Complaints

Complaints should be addressed to What happens if Schroders is unable to Head of Investor Services, Schroders, meet its liabilities? PO Box 1102, Chelmsford CM99 2XX. A statement of your rights to compensation You can request a copy of our written in the event of Schroders being unable internal complaints procedures by to meet its liabilities to you is available writing to the above address or by from the FCA and the Financial Services telephoning Schroders Investor Services Compensation Scheme. Further details can on 0800 718 777*. You may also have the be found at www.fscs.org.uk. right to refer the complaint direct to the: *Please note, for your security telephone calls to Financial Ombudsman Service, Schroders may be recorded. South Quay Plaza, 183 Marsh Wall, London E14 9SR Tel: 0845 080 1800 www.financial-ombudsman.org.uk

6 Investment Trust ISA Key Features Glossary

Dividends Payments made by a company to its shareholders. When an investment (also refer to ‘income’) trust makes a revenue, the board decides to either reinvest the money in the company or pay its shareholders.

Income The return investors receive from their portfolios. The sort of investments that produce income include securities such as stocks, bonds and mutual funds. Income can take the form of dividends, interest and capital gain generated from securities and other forms of investment.

Investment Trust An investment trust is a listed company that invests in the shares of different companies.

ISA Individual Savings Accounts (ISAs) are tax free wrappers you can invest cash or shares in. Please refer to page 2 for more information.

Market Makers People who trade in the market as principals, and create a market in a specific stock by quoting prices at which they will buy or sell on demand.

Net Asset Value The total value of a trust measured by taking the total value of its assets, (NAV) less its liabilities. The NAV per share is calculated by dividing the resulting number by the number of ordinary shares in issue. This term is used to describe the underlying value of an investment trust’s share.

Share price – At a discount If the share price of a trust is lower than the NAV per share, the trust is said to be trading at a discount. The discount is shown as a percentage of the NAV. – At a premium If the share price of a trust is higher then the NAV per share, the trust is said to be trading at a premium. The premium is shown as a percentage of the NAV.

For further explanation of financial terms visit www.schroders.co.uk/glossary. Printed copies are available by contacting the company address overleaf.

Investment Trust ISA Key Features 7

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Issued in March 2019 by Schroder Unit Trusts Limited, 1 London Wall Place, London EC2Y 5AU. Authorised and regulated by the Financial Conduct Authority. Please note that for investors’ security all telephone calls to Schroders Investor Services may be recorded. ITKFD. CS1255