Washington, D.C. 20549
The Registrant’s schedules as of the close of the reporting period, as set forth in §§ 210.12-12 through 210.12-14 of Regulation S-X [17 CFR §§ 210-12.12-12.14], are attached hereto.
A description of the Funds’ proxy voting policies and procedures is available upon request, without charge, by visiting the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov, or by calling 1-800-464-3108 and requesting a copy of the applicable Fund’s Statement of Additional Information or on the Schroder Funds website at http://www.schroderfunds.com, by downloading the Funds’ Statement of Additional Information. Information regarding how the Funds voted proxies related to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request by calling 1-800-464-3108 and on the SEC’s website at http://www.sec.gov.
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available on the SEC’s website at http://www.sec. gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Performance quoted represents past performance and does not guarantee or predict future results. Investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost. Please keep in mind that any double digit returns are highly unusual and cannot be sustained. Fees and expenses are factored into the net asset value of your shares and any performance numbers we release. Total return figures reflect expense limitations in effect during the periods shown; without such limitations, the performance shown would have been lower. Performance results assume the reinvestment of dividends and capital gains. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. Current and month- end performance and other information, which may be lower or higher than that cited, is available by contacting SIMNA at (212) 641-3800 and is periodically updated on our website: www.schroderfunds.com.
“Total Return” is calculated including reinvestment of all dividends and distributions. Results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for certain periods reflect fee waivers and/or reimbursements in effect for that period; absent fee waivers and reimbursements, performance would have been lower. Results represent past performance and do not indicate future results. The value of an investment in the Fund and the return on investment both will fluctuate and redemption proceeds may be higher or lower than an investor’s original cost.
“Total Return” is calculated including reinvestment of all dividends and distributions. Results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for certain periods reflect fee waivers and/or reimbursements in effect for that period; absent fee waivers and reimbursements, performance would have been lower. Results represent past performance and do not indicate future results. The value of an investment in the Fund and the return on investment both will fluctuate and redemption proceeds may be higher or lower than an investor’s original cost.
“Total Return” is calculated including reinvestment of all dividends and distributions. Results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for certain periods reflect fee waivers and/or reimbursements in effect for that period; absent fee waivers and reimbursements, performance would have been lower. Results represent past performance and do not indicate future results. The value of an investment in the Fund and the return on investment both will fluctuate and redemption proceeds may be higher or lower than an investor’s original cost.
“Total Return” is calculated including reinvestment of all dividends and distributions. Results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for certain periods reflect fee waivers and/or reimbursements in effect for that period; absent fee waivers and reimbursements, performance would have been lower. Results represent past performance and do not indicate future results. The value of an investment in the Fund and the return on investment both will fluctuate and redemption proceeds may be higher or lower than an investor’s original cost.
“Total Return” is calculated including reinvestment of all dividends and distributions. Results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for certain periods reflect fee waivers and/or reimbursements in effect for that period; absent fee waivers and reimbursements, performance would have been lower. Results represent past performance and do not indicate future results. The value of an investment in the Fund and the return on investment both will fluctuate and redemption proceeds may be higher or lower than an investor’s original cost.
“Total Return” is calculated including reinvestment of all dividends and distributions. Results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for certain periods reflect fee waivers and/or reimbursements in effect for that period; absent fee waivers and reimbursements, performance would have been lower. Results represent past performance and do not indicate future results. The value of an investment in the Fund and the return on investment both will fluctuate and redemption proceeds may be higher or lower than an investor’s original cost.
A summary of the outstanding forward foreign currency contracts held by the Fund at April 30, 2018, is as follows:
The following is a summary of the inputs used as of April 30, 2018, in valuing the Fund’s investments carried at value:
(1) There were no transfers between levels during the reporting period, based on the input levels assigned under the hierarchy at the end of the reporting period.
(2) All securities in this category are Level 1 securities. For a detailed break-out by classification, please refer to the Schedule of Investments.
Schroder Total Return Fixed Income Fund
Schedule of Investments(continued)
April 30, 2018(unaudited)
The open futures contracts held by the Fund at April 30, 2018, is as follows:
Type of Contract | | Number of Contracts Long (Short) | | Expiration Date | | Notional Amount | | | Value | | | Unrealized Appreciation (Depreciation) | |
| Euro-BOBL | | | (22 | ) | Jun-2018 | | $ | (3,539,482 | ) | | $ | (3,480,298 | ) | | $ | (15,891 | ) |
| Euro-BTP | | | (13 | ) | Jun-2018 | | | (2,172,213 | ) | | | (2,182,287 | ) | | | (68,896 | ) |
| Euro-Bund | | | (2 | ) | Jun-2018 | | | (388,144 | ) | | | (383,388 | ) | | | (3,498 | ) |
| Euro-OAT | | | (10 | ) | Jun-2018 | | | (1,877,833 | ) | | | (1,857,407 | ) | | | (29,785 | ) |
| U.S. 2-Year Treasury Note | | | 20 | | Jun-2018 | | | 4,252,221 | | | | 4,240,938 | | | | (11,283 | ) |
| U.S. 5-Year Treasury Note | | | 74 | | Jun-2018 | | | 8,442,616 | | | | 8,399,578 | | | | (43,038 | ) |
| U.S. 10-Year Treasury Note | | | 3 | | Jun-2018 | | | 359,357 | | | | 358,875 | | | | (482 | ) |
| U.S. Long Treasury Bond | | | 4 | | Jun-2018 | | | 573,726 | | | | 575,375 | | | | 1,649 | |
| U.S. Ultra Long Treasury Bond | | | 8 | | Jun-2018 | | | 1,230,341 | | | | 1,257,000 | | | | 26,659 | |
| | | | | | | | $ | 6,880,589 | | | $ | 6,928,386 | | | $ | (144,565 | ) |
A summary of the outstanding forward foreign currency contracts held by the Fund at April 30, 2018, is as follows:
| Counterparty | Settlement Date | Currency to Deliver | Currency to Receive | | Unrealized Appreciation (Depreciation) | |
| Morgan Stanley | 06/15/18 | MXN 15,100,000 | USD 788,063 | | $ | (13,352 | ) |
A list of the open centrally cleared swap agreements held by the Fund at April 30, 2018 is as follows:
Credit Default Swaps
| Reference Entity | Buy/Sell Protection | | (Pays)/ Receives Rate | | Payment Frequency | Termination Date | | Notional Amount | | | Value | | | Upfront Payments/ Receipts | | | Net Unrealized Appreciation (Depreciation) | |
| CDX High Yield S29 | Buy | | | (5.00)% | | Quarterly | 12/20/2022 | | $ | 1,200,000 | | | $ | (87,089 | ) | | $ | (95,312 | ) | | $ | 8,223 | |
ARS — Argentine Peso
BRL — Brazilian Real
CDX — Credit Derivatives Index
CLO — Collateralized Loan Obligation
FHLMC — Federal Home Loan Mortgage Corporation
FNMA — Federal National Mortgage Association
GNMA — Government National Mortgage Association
ICE — Intercontinental Exchange
IO — Interest Only
LIBOR — London Interbank Offered Rate
LLC — Limited Liability Company
MTN — Medium Term Note
MXN — Mexican Peso
NATL — National Public Finance Guarantee Corporation
RB — Revenue Bond
REIT — Real Estate Investment Trust
USD — United States Dollar
VAR — Variable Rate
ZAR — South African Rand
Schroder Total Return Fixed Income Fund
Schedule of Investments(concluded)
April 30, 2018(unaudited)
The following is a summary of the inputs used as of April 30, 2018, in valuing the Fund’s investments carried at value
| Investments in Securities | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Corporate Obligations | | $ | — | | | $ | 30,979,591 | | | $ | — | | | $ | 30,979,591 | |
| U.S. Treasury Obligations | | | — | | | | 10,366,439 | | | | — | | | | 10,366,439 | |
| Asset-Backed Securities | | | — | | | | 8,250,386 | | | | — | | | | 8,250,386 | |
| U.S. Government Mortgage-Backed Obligations | | | — | | | | 6,772,246 | | | | — | | | | 6,772,246 | |
| Collateralized Mortgage Obligations | | | — | | | | 4,251,834 | | | | — | | | | 4,251,834 | |
| Sovereign Governments | | | — | | | | 3,239,954 | | | | — | | | | 3,239,954 | |
| Taxable Municipal Bonds | | | — | | | | 1,149,587 | | | | — | | | | 1,149,587 | |
| Commercial Mortgage-Backed Obligation | | | — | | | | 241,415 | | | | — | | | | 241,415 | |
| Total Investments in Securities | | $ | — | | | $ | 65,251,452 | | | $ | — | | | $ | 65,251,452 | |
| Other Financial Instruments | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Futures — Unrealized Appreciation | | $ | 28,308 | | | $ | — | | | $ | — | | | $ | 28,308 | |
| Futures — Unrealized Depreciation | | | (172,873 | ) | | | — | | | | — | | | | (172,873 | ) |
| Forwards — Unrealized Depreciation | | | — | | | | (13,352 | ) | | | — | | | | (13,352 | ) |
| Credit Default Swaps — Unrealized Appreciation | | | — | | | | 8,223 | | | | — | | | | 8,223 | |
| Total Other Financial Instruments | | $ | (144,565 | ) | | $ | (5,129 | ) | | $ | — | | | $ | (149,694 | ) |
The following is a reconciliation of the investments in which significant unobservable inputs (Level 3) were used in determining value:
Collateralized Mortgage Obligations
| Beginning balance as of November 1, 2017 | | $ | 940,031 | |
| Realized gain/(loss) | | | — | |
| Change in unrealized appreciation/(depreciation) | | | — | |
| Purchases | | | — | |
| Sales | | | — | |
| Transfer into Level 3 | | | — | |
| Transfer out of Level 3 | | | (940,031 | ) |
| Ending balance as of April 30, 2018 | | $ | — | |
For the period ended April 30, 2018, there have been no transfers between Level 1 and Level 2 investments. For the period ended April 30, 2018, there have been no transfers between Level 1 and Level 3 investments.
For the period ended April 30, 2018, there were transfers between Level 3 and Level 2 investments due to the valuation changes at the prior year end. For the period ended April 30, 2018, there were no Level 3 securities. The Fund generally recognizes transfers between the levels as of the end of the reporting period.
Schroder Mutual Funds
Statements of Assets and Liabilities
April 30, 2018 (unaudited)
| | | North American Equity Fund | | | Emerging Markets Small Cap Fund | | | Core Bond Fund | | | Long Duration Investment- Grade Bond Fund | | | Short Duration Bond Fund | | | Total Return Fixed Income Fund | |
| ASSETS | | | | | | | | | | | | | | | | | | | | | | | | |
| Investments in securities, at value — Note 2. | | $ | 1,043,704,598 | | | $ | 2,167,591 | | | $ | 18,311,434 | | | $ | 78,496,597 | | | $ | 15,688,133 | | | $ | 65,251,452 | |
| Cash | | | 23,334,645 | | | | 154,816 | | | | 556,117 | | | | 604,267 | | | | 144,241 | | | | 138,231 | |
| Foreign currency | | | 9,570 | | | | 8,924 | | | | — | | | | — | | | | — | | | | 79,342 | |
| Receivable for securities sold | | | 343,347 | | | | 18,438 | | | | — | | | | 261,479 | | | | — | | | | 400,068 | |
| Receivable for Fund shares sold | | | 5,203 | | | | — | | | | — | | | | 1,728 | | | | 704 | | | | 5,273 | |
| Due from Investment Adviser — Note 3 | | | — | | | | 23,000 | | | | 47,771 | | | | 4,333 | | | | 18,732 | | | | 7,157 | |
| Unrealized appreciation on forward foreign currency contracts | | | 216,412 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Initial margin for futures contracts | | | 1,085,600 | | | | — | | | | — | | | | — | | | | 14,780 | | | | 179,358 | |
| Initial margin for centrally cleared swap contracts | | | — | | | | — | | | | — | | | | — | | | | — | | | | 34,609 | |
| Interest receivable | | | 1,056,233 | | | | 1,473 | | | | 130,008 | | | | 896,031 | | | | 81,682 | | | | 532,733 | |
| Variation margin receivable for centrally cleared swap contracts | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,414 | |
| Receivable from Transfer Agent | | | 2,019 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Variation margin receivable for futures contracts | | | — | | | | — | | | | — | | | | — | | | | 250 | | | | 22,102 | |
| Deferred offering cost | | | — | | | | — | | | | 41,739 | | | | — | | | | — | | | | — | |
| Prepaid expenses | | | 43,652 | | | | 13,857 | | | | — | | | | 19,095 | | | | 10,171 | | | | 20,602 | |
| TOTAL ASSETS | | | 1,069,801,279 | | | | 2,388,099 | | | | 19,087,069 | | | | 80,283,530 | | | | 15,958,693 | | | | 66,672,341 | |
| LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | |
| Payable for securities purchased | | | 522,719 | | | | 7,437 | | | | 119,268 | | | | 663,546 | | | | — | | | | 68,490 | |
| Variation margin payable for futures contracts | | | 146,400 | | | | — | | | | — | | | | — | | | | 659 | | | | 2,824 | |
| Income distributions payable | | | — | | | | — | | | | — | | | | — | | | | — | | | | 24,132 | |
| Accrued foreign capital gains tax | | | — | | | | 1,695 | | | | — | | | | — | | | | — | | | | — | |
| Unrealized depreciation on forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | | | | — | | | | 13,352 | |
| Payable for Fund shares redeemed | | | — | | | | — | | | | — | | | | 234,376 | | | | — | | | | 11,140 | |
| Investment Advisory fees payable — Note 3 | | | 219,870 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Sub-administration fees payable — Note 3 | | | 43,976 | | | | 10,274 | | | | 10,274 | | | | 10,274 | | | | 10,274 | | | | 10,241 | |
| Audit fees payable | | | 21,003 | | | | 21,174 | | | | 10,066 | | | | 20,406 | | | | 24,295 | | | | 20,406 | |
| Trustees’ fees payable | | | 9,828 | | | | 1,578 | | | | 2,086 | | �� | | 2,163 | | | | 1,687 | | | | 2,083 | |
| Legal fees payable | | | — | | | | — | | | | 2,104 | | | | — | | | | — | | | | — | |
| Offering cost payable | | | — | | | | — | | | | 55,149 | | | | — | | | | — | | | | — | |
| Shareholder Servicing Fees, Investor Class — Note 3 | | | — | | | | — | | | | — | | | | 28,273 | | | | — | | | | 43,592 | |
| Accrued expenses and other liabilities | | | 87,780 | | | | 45,933 | | | | 15,519 | | | | 24,667 | | | | 25,675 | | | | 40,952 | |
| TOTAL LIABILITIES | | | 1,051,576 | | | | 88,058 | | | | 214,466 | | | | 983,705 | | | | 62,590 | | | | 237,245 | |
| NET ASSETS | | $ | 1,068,749,703 | | | $ | 2,300,041 | | | $ | 18,872,603 | | | $ | 79,299,825 | | | $ | 15,896,103 | | | $ | 66,435,096 | |
| Cost of securities | | $ | 749,755,060 | | | $ | 1,601,337 | | | $ | 18,640,505 | | | $ | 80,822,785 | | | $ | 15,846,012 | | | $ | 66,918,534 | |
| Cost of foreign currency | | $ | 9,570 | | | $ | 8,869 | | | $ | — | | | $ | — | | | $ | — | | | $ | 81,286 | |
Schroder Mutual Funds
Statements of Assets and Liabilities
April 30, 2018 (unaudited)
| | | | | | Emerging | | | Core Bond Fund | | | Long | | | Short | | | Total Return | |
| NET ASSETS | | | | | | | | | | | | | | | | | | |
| Capital paid-in | | $ | 720,869,294 | | | $ | 1,688,955 | | | $ | 19,230,058 | | | $ | 82,209,898 | | | $ | 16,154,820 | | | $ | 71,791,020 | |
| Undistributed (distributions in excess of) net investment income | | | 5,686,092 | | | | (3,732 | ) | | | 5,618 | | | | 27,451 | | | | 3,426 | | | | (201,750 | ) |
| Accumulated net realized gain (loss) on investments, futures, swap contracts, forward foreign currency contracts and foreign currency transactions | | | 48,516,300 | | | | 50,149 | | | | (34,002 | ) | | | (611,336 | ) | | | (88,695 | ) | | | (3,336,452 | ) |
| Accumulated foreign capital gains tax on appreciated securities | | | — | | | | (1,695 | ) | | | — | | | | — | | | | — | | | | — | |
| Net unrealized appreciation (depreciation) on investments | | | 293,949,538 | | | | 566,254 | | | | (329,071 | ) | | | (2,326,188 | ) | | | (157,879 | ) | | | (1,667,082 | ) |
| Net unrealized appreciation (depreciation) on futures, swap contracts, forward foreign currency contracts and foreign currency transactions and translations | | | (271,521 | ) | | | 110 | | | | — | | | | — | | | | (15,569 | ) | | | (150,640 | ) |
| NET ASSETS | | $ | 1,068,749,703 | | | $ | 2,300,041 | | | $ | 18,872,603 | | | $ | 79,299,825 | | | $ | 15,896,103 | | | $ | 66,435,096 | |
| Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| R6 | | $ | N/A | | | $ | 2,271,658 | | | $ | 18,872,603 | | | $ | N/A | | | $ | 15,795,030 | | | $ | N/A | |
| Investor | | | 1,068,749,703 | | | | 28,383 | | | | N/A | | | | 79,299,825 | | | | 101,073 | | | | 66,435,096 | |
| Total shares outstanding end of period: | | | | | | | | | | | | | | | | | | | | | | | | |
| R6 | | | N/A | | | | 191,049 | | | | 1,921,840 | | | | N/A | | | | 1,606,311 | | | | N/A | |
| Investor | | | 63,970,538 | | | | 2,387 | | | | N/A | | | | 9,384,716 | | | | 10,276 | | | | 6,948,247 | |
| Net asset value, offering and redemption price per share (net assets ÷ shares outstanding) | | | | | | | | | | | | | | | | | | | | | | | | |
| R6 | | $ | N/A | | | $ | 11.89 | | | $ | 9.82 | | | $ | N/A | | | $ | 9.83 | | | $ | N/A | |
| Investor | | | 16.71 | | | | 11.89 | | | | N/A | | | | 8.45 | | | | 9.84 | | | | 9.56 | |
N/A — R6 or Investor Shares currently not offered.
Schroder Mutual Funds
For the Six Months Ended April 30, 2018 (unaudited)
| | | North American Equity Fund | | | Emerging Markets Small Cap Fund | |
| INVESTMENT INCOME | | | | | | |
| Dividend income | | $ | 11,271,578 | | | $ | 24,538 | |
| Interest income | | | — | | | | — | |
| Foreign taxes withheld | | | (39,855 | ) | | | (1,859 | ) |
| TOTAL INCOME | | | 11,231,723 | | | | 22,679 | |
| EXPENSES | | | | | | | | |
| Investment Advisory fees — Note 3 | | | 1,333,449 | | | | 13,193 | |
| Sub-administration fees — Note 3 | | | 266,698 | | | | 61,987 | |
| Trustees fees and expenses | | | 17,984 | | | | 3,120 | |
| Shareholder Service fees, Investor Shares — Note 3 | | | — | | | | — | |
| Transfer agent fees | | | 37,663 | | | | 29,031 | |
| Legal fees | | | 19,932 | | | | 3,441 | |
| Custodian fees | | | 16,338 | | | | 18,922 | |
| Audit fees | | | 15,448 | | | | 19,367 | |
| Printing | | | 15,344 | | | | 2,201 | |
| Registration fees | | | 14,452 | | | | 10,662 | |
| Insurance | | | 9,962 | | | | 1,857 | |
| Pricing fees | | | 5,867 | | | | 2,532 | |
| Offering costs | | | — | | | | — | |
| Other | | | 24,464 | | | | 4,382 | |
| TOTAL EXPENSES | | | 1,777,601 | | | | 170,695 | |
| Expenses waived by Investment Adviser — Note 3 | | | — | | | | (13,193 | ) |
| Reimbursement from Investment Adviser | | | — | | | | (141,798 | ) |
| Custody Offset — Note 2 | | | (11,658 | ) | | | (238 | ) |
| NET EXPENSES | | | 1,765,943 | | | | 15,466 | |
| NET INVESTMENT INCOME | | | 9,465,780 | | | | 7,213 | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FUTURES, PURCHASED OPTIONS,
SWAP CONTRACTS, FORWARD FOREIGN CURRENCY CONTRACTS AND FOREIGN CURRENCY
TRANSACTIONS AND TRANSLATIONS
| Net realized gain (loss) on investments sold | | | 52,317,783 | | | | 61,575 | |
| Net realized gain (loss) on futures | | | 41,203 | | | | — | |
| Net realized loss on purchased options | | | — | | | | — | |
| Net realized loss on swap contracts | | | — | | | | — | |
| Net realized gain (loss) on forward foreign currency contracts and foreign currency transactions | | | 105,800 | | | | (345 | ) |
| Net realized gain (loss) on investments, futures, purchased options, swap contracts, forward foreign currency contracts and foreign currency transactions | | | 52,464,786 | | | | 61,230 | |
| Change in unrealized appreciation (depreciation) on investments | | | (22,707,869 | ) | | | 17,018 | |
| Change in unrealized depreciation on futures | | | (858,201 | ) | | | — | |
| Change in unrealized appreciation on purchased options | | | — | | | | — | |
| Change in unrealized appreciation on swap contracts | | | — | | | | — | |
| Change in accrued foreign capital gains tax on appreciated securities | | | — | | | | 1,738 | |
| Change in unrealized appreciation (depreciation) on forward foreign currency contracts and foreign currency transactions and translations | | | (134,747 | ) | | | 102 | |
| Net change in unrealized appreciation (depreciation) on investments, futures, purchased options, swap contracts, accrued foreign capital gains tax on appreciated securities, forward foreign currency contracts and foreign currency transactions and translations | | | (23,700,817 | ) | | | 18,858 | |
| NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 28,763,969 | | | | 80,088 | |
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 38,229,749 | | | $ | 87,301 | |
| | | Long Duration Investment-Grade Bond Fund | | | Short Duration Bond Fund | | | Total Return Fixed Income Fund | |
| | | | | | | | | | | |
| $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | 138,290 | | | | 1,390,166 | | | | 180,654 | | | | 1,223,406 | |
| | — | | | | — | | | | — | | | | (997 | ) |
| | 138,290 | | | | 1,390,166 | | | | 180,654 | | | | 1,222,409 | |
| | | | | | | | | | | | | | | |
| | 11,728 | | | | 125,720 | | | | 22,848 | | | | 84,429 | |
| | 30,480 | | | | 61,987 | | | | 61,987 | | | | 61,987 | |
| | 2,086 | | | | 4,178 | | | | 3,312 | | | | 4,021 | |
| | — | | | | 19,847 | | | | — | | | | 27,018 | |
| | 9,103 | | | | 19,292 | | | | 29,287 | | | | 19,125 | |
| | 2,104 | | | | 4,623 | | | | 3,657 | | | | 4,448 | |
| | 1,751 | | | | 2,226 | | | | 1,779 | | | | 7,411 | |
| | 10,066 | | | | 15,251 | | | | 16,540 | | | | 15,251 | |
| | 8,674 | | | | 3,698 | | | | 2,377 | | | | 9,225 | |
| | 122 | | | | 12,187 | | | | 11,016 | | | | 13,041 | |
| | — | | | | 2,529 | | | | 2,003 | | | | 2,428 | |
| | 1,956 | | | | 4,511 | | | | 4,622 | | | | 15,692 | |
| | 13,410 | | | | — | | | | — | | | | — | |
| | 4,401 | | | | 6,168 | | | | 4,659 | | | | 5,183 | |
| | 95,881 | | | | 282,217 | | | | 164,087 | | | | 269,259 | |
| | (11,728 | ) | | | (125,720 | ) | | | (22,848 | ) | | | (84,429 | ) |
| | (68,467 | ) | | | (10,025 | ) | | | (111,216 | ) | | | (48,535 | ) |
| | (675 | ) | | | (1,252 | ) | | | (510 | ) | | | (1,394 | ) |
| | 15,011 | | | | 145,220 | | | | 29,513 | | | | 134,901 | |
| | 123,279 | | | | 1,244,946 | | | | 151,141 | | | | 1,087,508 | |
| | (34,002 | ) | | | 65,719 | | | | (17,182 | ) | | | (159,590 | ) |
| | — | | | | — | | | | (40,533 | ) | | | (310,437 | ) |
| | — | | | | — | | | | — | | | | (5,108 | ) |
| | — | | | | — | | | | — | | | | (97,059 | ) |
| | — | | | | — | | | | 58 | | | | (39,976 | ) |
| | | | | | | | | | | | | | | |
| | (34,002 | ) | | | 65,719 | | | | (57,657 | ) | | | (612,170 | ) |
| | (329,071 | ) | | | (4,195,475 | ) | | | (197,786 | ) | | | (1,828,443 | ) |
| | — | | | | — | | | | (5,327 | ) | | | (24,470 | ) |
| | — | | | | — | | | | — | | | | 1,046 | |
| | — | | | | — | | | | — | | | | 78,496 | |
| | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| | — | | | | — | | | | (90 | ) | | | (73,705 | ) |
| | | | | | | | | | | | | | | |
| | (329,071 | ) | | | (4,195,475 | ) | | | (203,203 | ) | | | (1,847,076 | ) |
| | (363,073 | ) | | | (4,129,756 | ) | | | (260,860 | ) | | | (2,459,246 | ) |
| $ | (239,794 | ) | | $ | (2,884,810 | ) | | $ | (109,719 | ) | | $ | (1,371,738 | ) |
(a) Fund commenced operations on January 31, 2018.
Statements of Changes in Net Assets
| | North American Equity Fund | |
| | Six Months Ended April 30, 2018 (Unaudited) | | | Year Ended October 31, 2017 | |
| | | | | | |
INCREASE (DECREASE) IN NET ASSETS From Operations: | | | | | | |
| Net investment income | | $ | 9,465,780 | | | $ | 17,451,942 | |
| Net realized gain (loss) on investments sold, futures, forward foreign currency contracts and foreign currency transactions | | | 52,464,786 | | | | 40,156,220 | |
| Net change in unrealized appreciation (depreciation) on investments, futures, accrued foreign capital gains tax on appreciated securities, forward foreign currency contracts and foreign currency transactions and translations. | | | (23,700,817 | ) | | | 130,535,315 | |
| Net increase (decrease) in net assets resulting from operations | | | 38,229,749 | | | | 188,143,477 | |
| | | | | | | | | |
| Dividends and Distributions to Shareholders: | | | | | | | | |
| Net investment income: | | | | | | | | |
| R6 Shares | | | N/A | | | | N/A | |
| Investor Shares | | | (16,694,633 | ) | | | (17,040,884 | ) |
| Advisor Shares* | | | — | | | | (2,399 | ) |
| Net realized gains: | | | | | | | | |
| R6 Shares | | | N/A | | | | N/A | |
| Investor Shares | | | (40,869,758 | ) | | | (34,629,983 | ) |
| Advisor Shares* | | | — | | | | (6,225 | ) |
| Total dividends and distributions | | | (57,564,391 | ) | | | (51,679,491 | ) |
| | | | | | | | | |
| Share Transactions: | | | | | | | | |
| R6 Shares: | | | | | | | | |
| Sales of shares | | | N/A | | | | N/A | |
| Reinvestment of distributions | | | N/A | | | | N/A | |
| Issued in connection with in-kind transfer - Note 8 | | | N/A | | | | N/A | |
| Redemption of shares | | | N/A | | | | N/A | |
| Total increase (decrease) from R6 Share transactions | | | N/A | | | | N/A | |
| Investor Shares: | | | | | | | | |
| Sales of shares | | | 10,095,032 | | | | 24,120,420 | |
| Reinvestment of distributions | | | 57,353,134 | | | | 51,436,832 | |
| Redemption of shares | | | (831,879 | ) | | | (79,948,808 | ) |
| Total increase (decrease) from Investor Share transactions | | | 66,616,287 | | | | (4,391,556 | ) |
| Advisor Shares*: | | | | | | | | |
| Sales of shares | | | — | | | | 339 | |
| Reinvestment of distributions | | | — | | | | 7,955 | |
| Redemption of shares | | | — | | | | (183,795 | ) |
| Total decrease from Advisor Share transactions | | | — | | | | (175,501 | ) |
| Net increase (decrease) in net assets from share transactions | | | 66,616,287 | | | | (4,567,057 | ) |
| Total increase (decrease) in net assets | | | 47,281,645 | | | | 131,896,929 | |
| | | | | | | | | |
| Net Assets | | | | | | | | |
| Beginning of period | | | 1,021,468,058 | | | | 889,571,129 | |
| End of period | | $ | 1,068,749,703 | | | $ | 1,021,468,058 | |
| Undistributed (distributions in excess of) net investment income | | $ | 5,686,092 | | | $ | 12,914,945 | |
* Advisor Shares were terminated on December 20, 2016.
N/A — R6 or Investor Shares currently not offered. Advisor Shares were not offered by these funds.
| Emerging Markets Small Cap Fund | | | Core Bond Fund | |
Six Months Ended April 30, 2018 (Unaudited) | | | Year Ended October 31, 2017 | | | Period Ended April 30, 2018 (a) (Unaudited) | |
| | | | | | | | |
| $ | 7,213 | | | $ | 3,661 | | | $ | 123,279 | |
| | | | | | | | | | | |
| | 61,230 | | | | 2,740,589 | | | | (34,002 | ) |
| | | | | | | | | | | |
| | 18,858 | | | | (1,255,339 | ) | | | (329,071 | ) |
| | 87,301 | | | | 1,488,911 | | | | (239,794 | ) |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | — | | | | (128,224 | ) | | | (117,661 | ) |
| | — | | | | (172 | ) | | | N/A | |
| | N/A | | | | N/A | | | | N/A | |
| | | | | | | | | | | |
| | (355,583 | ) | | | (551,226 | ) | | | — | |
| | (4,444 | ) | | | (809 | ) | | | N/A | |
| | N/A | | | | N/A | | | | N/A | |
| | (360,027 | ) | | | (680,431 | ) | | | (117,661 | ) |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | — | | | | 3,503,306 | | | | 100 | |
| | 355,582 | | | | 679,450 | | | | 75,193 | |
| | — | | | | — | | | | 20,054,765 | |
| | — | | | | (18,563,469 | ) | | | (900,000 | ) |
| | 355,582 | | | | (14,380,713 | ) | | | 19,230,058 | |
| | | | | | | | | | | |
| | — | | | | — | | | | N/A | |
| | 4,444 | | | | — | | | | N/A | |
| | — | | | | — | | | | N/A | |
| | 4,444 | | | | — | | | | N/A | |
| | | | | | | | | | | |
| | N/A | | | | N/A | | | | N/A | |
| | N/A | | | | N/A | | | | N/A | |
| | N/A | | | | N/A | | | | N/A | |
| | N/A | | | | N/A | | | | N/A | |
| | 360,026 | | | | (14,380,713 | ) | | | 19,230,058 | |
| | 87,300 | | | | (13,572,233 | ) | | | 18,872,603 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | 2,212,741 | | | | 15,784,974 | | | | — | |
| $ | 2,300,041 | | | $ | 2,212,741 | | | $ | 18,872,603 | |
| $ | (3,732 | ) | | $ | (10,945 | ) | | $ | 5,618 | |
(a) Fund commenced operations on January 31, 2018.
Schroder Mutual Funds
Statements of Changes in Net Assets
| | Long Duration Investment-Grade Bond Fund | |
| | Six Months Ended April 30, 2018 (Unaudited) | | | Year Ended October 31, 2017 | |
INCREASE (DECREASE) IN NET ASSETS From Operations: | | | | | | |
| Net investment income | | $ | 1,244,946 | | | $ | 2,348,696 | |
| Net realized gain (loss) on investments, futures, purchased options, swap contracts, forward foreign currency contracts and foreign currency transactions | | | 65,719 | | | | (576,662 | ) |
| Net change in unrealized appreciation (depreciation) on investments, futures, purchased options, swap contracts, forward foreign currency contracts and foreign currency transactions and translations | | | (4,195,475 | ) | | | (256,949 | ) |
| Net increase (decrease) in net assets resulting from operations | | | (2,884,810 | ) | | | 1,515,085 | |
| | | | | | | | | |
| Dividends and Distributions to Shareholders: | | | | | | | | |
| Net investment income: | | | | | | | | |
| R6 Shares | | | N/A | | | | N/A | |
| Investor Shares | | | (1,242,633 | ) | | | (2,352,791 | ) |
| Advisor Shares* | | | N/A | | | | N/A | |
| Net realized gains: | | | | | | | | |
| R6 Shares | | | N/A | | | | N/A | |
| Investor Shares | | | — | | | | (2,278,988 | ) |
| Return of Capital: | | | | | | | | |
| Investor Shares | | | — | | | | — | |
| Total dividends and distributions | | | (1,242,633 | ) | | | (4,631,779 | ) |
| | | | | | | | | |
| Share Transactions: | | | | | | | | |
| R6 Shares: | | | | | | | | |
| Sales of shares | | | N/A | | | | N/A | |
| Reinvestment of distributions | | | N/A | | | | N/A | |
| Redemption of shares | | | N/A | | | | N/A | |
| Total decrease from R6 Share transactions | | | N/A | | | | N/A | |
| Investor Shares: | | | | | | | | |
| Sales of shares | | | 7,301,520 | | | | 4,810,316 | |
| Reinvestment of distributions | | | 1,217,413 | | | | 4,566,592 | |
| Redemption of shares | | | (1,817,826 | ) | | | (3,766,397 | ) |
| Total increase (decrease) from Investor Share transactions | | | 6,701,107 | | | | 5,610,511 | |
| Advisor Shares*: | | | | | | | | |
| Reinvestment of distributions | | | N/A | | | | N/A | |
| Redemption of shares | | | N/A | | | | N/A | |
| Total decrease from Advisor Share transactions | | | N/A | | | | N/A | |
| Net increase (decrease) in net assets from share transactions | | | 6,701,107 | | | | 5,610,511 | |
| Total increase (decrease) in net assets | | | 2,573,664 | | | | 2,493,817 | |
| | | | | | | | | |
| Net Assets | | | | | | | | |
| Beginning of period | | | 76,726,161 | | | | 74,232,344 | |
| End of period | | $ | 79,299,825 | | | $ | 76,726,161 | |
| Undistributed (distributions in excess of) net investment income | | $ | 27,451 | | | $ | 25,138 | |
* Advisor Shares were terminated on December 20, 2016.
N/A — R6 Shares currently not offered. Advisor Shares were not offered by these funds.
| Short Duration Bond Fund | | | Total Return Fixed Income Fund | |
Six Months Ended April 30, 2018 (Unaudited) | | | Six Months Ended Year Ended October 31, 2017 | | | April 30, 2018 (Unaudited) | | | Year Ended October 31, 2017 | |
| | | | | | | | | | | |
| $ | 151,141 | | | $ | 264,944 | | | $ | 1,087,508 | | | $ | 1,954,867 | |
| | | | | | | | | | | | | | | |
| | (57,657 | ) | | | (31,502 | ) | | | (612,170 | ) | | | (2,380,740 | ) |
| | | | | | | | | | | | | | | |
| | (203,203 | ) | | | (127,479 | ) | | | (1,847,076 | ) | | | 579,387 | |
| | (109,719 | ) | | | 105,963 | | | | (1,371,738 | ) | | | 153,514 | |
| | | | | | | | | | | | | | | |
| | (150,119 | ) | | | (261,791 | ) | | | N/A | | | | N/A | |
| | (944 | ) | | | (3,712 | ) | | | (1,070,099 | ) | | | (1,497,110 | ) |
| | N/A | | | | N/A | | | | — | | | | (6,690 | ) |
| | | | | | | | | | | | | | | |
| | — | | | | (4,377 | ) | | | N/A | | | | N/A | |
| | — | | | | (180 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| | — | | | | — | | | | — | | | | (397,236 | ) |
| | (151,063 | ) | | | (270,060 | ) | | | (1,070,099 | ) | | | (1,901,036 | ) |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | 533,616 | | | | 1,247,465 | | | | N/A | | | | N/A | |
| | 150,119 | | | | 9,599 | | | | N/A | | | | N/A | |
| | (819,374 | ) | | | (9,325,310 | ) | | | N/A | | | | N/A | |
| | (135,639 | ) | | | (8,068,246 | ) | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | |
| | — | | | | — | | | | 5,259,414 | | | | 11,599,389 | |
| | 1,292 | | | | — | | | | 939,929 | | | | 1,580,853 | |
| | — | | | | (900,000 | ) | | | (4,521,596 | ) | | | (41,976,983 | ) |
| | 1,292 | | | | (900,000 | ) | | | 1,677,747 | | | | (28,796,741 | ) |
| | | | | | | | | | | | | | | |
| | N/A | | | | N/A | | | | — | | | | 2,831 | |
| | N/A | | | | N/A | | | | — | | | | (1,264,850 | ) |
| | N/A | | | | N/A | | | | — | | | | (1,262,019 | ) |
| | (134,347 | ) | | | (8,968,246 | ) | | | 1,677,747 | | | | (30,058,760 | ) |
| | (395,129 | ) | | | (9,132,343 | ) | | | (764,090 | ) | | | (31,806,282 | ) |
| | | | | | | | | | | | | | | |
| | 16,291,232 | | | | 25,423,575 | | | | 67,199,186 | | | | 99,005,468 | |
| $ | 15,896,103 | | | $ | 16,291,232 | | | $ | 66,435,096 | | | $ | 67,199,186 | |
| $ | 3,426 | | | $ | 3,348 | | | $ | (201,750 | ) | | $ | (219,159 | ) |
Schroder Mutual Funds
For the Period Ended April 30, (unaudited) and the Years or Period Ended October 31,
Selected Per Share Data and Ratios for a Share Outstanding Throughout each Year or Period
| | | Net Asset Value, Beginning of Period | | | Net Investment Income (Loss) | | | Unrealized Gains (Losses) | | | Total from Investment Operations | | | Investment Income | | | Distributions from Net Realized Gain | | | Total Distributions | |
| North American Equity Fund | | | | | | | | | | | | | | | | | | | | | | |
| Investor Shares | | | | | | | | | | | | | | | | | | | | | | |
| 2018* | | | $ | 17.02 | | | $ | 0.15 | | | $ | 0.50 | | | $ | 0.65 | | | $ | (0.28 | ) | | $ | (0.68 | ) | | $ | (0.96 | ) |
| 2017 | | | | 14.79 | | | | 0.30 | | | | 2.83 | | | | 3.13 | | | | (0.30 | ) | | | (0.60 | ) | | | (0.90 | ) |
| 2016 | | | | 15.14 | | | | 0.27 | | | | 0.31 | | | | 0.58 | | | | (0.33 | ) | | | (0.60 | ) | | | (0.93 | ) |
| 2015 | | | | 15.42 | | | | 0.34 | | | | 0.21 | | | | 0.55 | | | | (0.29 | ) | | | (0.54 | ) | | | (0.83 | ) |
| 2014 | | | | 13.57 | | | | 0.27 | | | | 1.83 | | | | 2.10 | | | | (0.25 | ) | | | — | | | | (0.25 | ) |
| 2013 | | | | 10.92 | | | | 0.24 | | | | 2.63 | | | | 2.87 | | | | (0.22 | ) | | | — | | | | (0.22 | ) |
| Emerging Markets Small Cap Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| R6 Shares | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2018* | | | $ | 13.65 | | | $ | 0.04 | (1) | | $ | 0.42 | | | $ | 0.46 | | | $ | — | | | $ | (2.22 | ) | | $ | (2.22 | ) |
| 2017 | | | | 12.07 | | | | — | (1) (2) | | | 2.07 | | | | 2.07 | | | | (0.09 | ) | | | (0.40 | ) | | | (0.49 | ) |
| 2016 | | | | 10.52 | | | | 0.11 | (1) | | | 1.44 | | | | 1.55 | | | | — | | | | — | | | | — | |
2015(b) | | | | 10.00 | | | | (0.01 | )(1) | | | 0.53 | | | | 0.52 | | | | — | | | | — | | | | — | |
| Investor Shares | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2018* | | | $ | 13.65 | | | $ | 0.04 | (1) | | $ | 0.42 | | | $ | 0.46 | | | $ | — | | | $ | (2.22 | ) | | $ | (2.22 | ) |
| 2017 | | | | 12.06 | | | | 0.10 | (1) | | | 1.98 | | | | 2.08 | | | | (0.09 | ) | | | (0.40 | ) | | | (0.49 | ) |
| 2016 | | | | 10.52 | | | | 0.10 | (1) | | | 1.44 | | | | 1.54 | | | | — | | | | — | | | | — | |
2015(b) | | | | 10.00 | | | | (0.01 | )(1) | | | 0.53 | | | | 0.52 | | | | — | | | | — | | | | — | |
| Core Bond Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| R6 Shares | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2018(c) | | | $ | 10.00 | | | $ | 0.06 | (1) | | $ | (0.18 | ) | | $ | (0.12 | ) | | $ | (0.06 | ) | | $ | — | | | $ | (0.06 | ) |
| * | For the six months ended April 30, 2018 (unaudited). All ratios for the period have been annualized, except for the Total Return and Portfolio Turnover Rate. |
(1) | Per share net investment income (loss) calculated using average shares. |
(2) | Amount was less than $0.01 per share. |
(3) | Ratios reflect the impact of low level of average net assets. Under normal asset levels, ratios would have been 1.45% and 1.60%. |
(4) | Ratio reflects the impact of low level of average net assets. Under normal asset levels, ratio would have been 1.50%. |
(a) | Total returns would have been lower had certain Fund expenses not been waived or reimbursed, as applicable, during the periods shown (See Note 3). Total return calculations for a period of less than one year are not annualized. |
(b) | Commenced operations on August 26, 2015. All ratios for the period have been annualized, except for the Total Return and Portfolio Turnover Rate. |
(c) | Commenced operations on January 31, 2018. All ratios for the period have been annualized, except for the Total Return and Portfolio Turnover Rate. |
Net Asset Value, End of Period | | | Total Return(a) | | | Net Assets, End of Period (000) | | | Ratio of Expenses to Average Net Assets (Including Waivers and Reimbursements, Excluding Offsets) | | | Ratio of Expenses to Average Net Assets (Excluding Waivers, Reimbursements and Offsets) | | | (Including Waivers, Reimbursements and Offsets) | | | Portfolio Turnover Rate | |
| | | | | | | | | | | | | | | | | | | | |
| $ | 16.71 | | | | 3.78 | % | | $ | 1,068,750 | | | | 0.33 | % | | | 0.33 | % | | | 1.77 | % | | | 29 | % |
| | 17.02 | | | | 21.96 | | | | 1,021,468 | | | | 0.33 | | | | 0.33 | | | | 1.83 | | | | 46 | |
| | 14.79 | | | | 4.20 | | | | 889,400 | | | | 0.32 | | | | 0.32 | | | | 2.03 | | | | 70 | |
| | 15.14 | | | | 3.77 | | | | 759,878 | | | | 0.32 | | | | 0.32 | | | | 1.91 | | | | 57 | |
| | 15.42 | | | | 15.75 | | | | 805,906 | | | | 0.31 | | | | 0.31 | | | | 1.80 | | | | 48 | |
| | 13.57 | | | | 26.76 | | | | 693,207 | | | | 0.33 | | | | 0.33 | | | | 1.96 | | | | 31 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 11.89 | | | | 3.93 | % | | $ | 2,272 | | | | 1.35 | % | | | 14.88 | % | | | 0.63 | % | | | 19 | % |
| | 13.65 | | | | 18.09 | | | | 2,185 | | | | 1.48 | (3) | | | 4.80 | | | | 0.04 | | | | 42 | |
| | 12.07 | | | | 14.73 | | | | 15,761 | | | | 1.50 | | | | 3.01 | | | | 0.98 | | | | 41 | |
| | 10.52 | | | | 5.20 | | | | 12,103 | | | | 1.50 | | | | 6.52 | | | | (0.57 | ) | | | 5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 11.89 | | | | 3.93 | % | | $ | 28 | | | | 1.35 | %(4) | | | 14.88 | % | | | 0.63 | % | | | 19 | % |
| | 13.65 | | | | 18.12 | | | | 27 | | | | 1.46 | (3) | | | 10.31 | | | | 0.82 | | | | 42 | |
| | 12.06 | | | | 14.64 | | | | 24 | | | | 1.60 | | | | 3.10 | | | | 0.91 | | | | 41 | |
| | 10.52 | | | | 5.20 | | | | 21 | | | | 1.65 | | | | 6.67 | | | | (0.72 | ) | | | 5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 9.82 | | | | (1.20 | )% | | $ | 18,873 | | | | 0.32 | % | | | 2.02 | % | | | 2.60 | % | | | 26 | % |
Schroder Mutual Funds
Financial Highlights
For the Period Ended April 30, (unaudited) and the Years or Period Ended October 31 (unless otherwise indicated),
Selected Per Share Data and Ratios for a Share Outstanding Throughout each Year or Period
| | | Net Asset Value, Beginning of Period | | | | | | Net Realized and | | | Total from Investment Operations | | | Dividends from Net Investment Income | | | | | | | |
| Long Duration Investment-Grade Bond Fund | | | | | | | | | | | | | | | | | | | | | | |
| Investor Shares | | | | | | | | | | | | | | | | | | | | | | |
| 2018* | | | $ | 8.88 | | | $ | 0.14 | (1) | | $ | (0.43 | ) | | $ | (0.29 | ) | | $ | (0.14 | ) | | $ | — | | | $ | — | |
| 2017 | | | | 9.31 | | | | 0.28 | (1) | | | (0.14 | ) | | | 0.14 | | | | (0.28 | ) | | | (0.29 | ) | | | — | |
| 2016 | | | | 8.99 | | | | 0.32 | (1) | | | 0.53 | | | | 0.85 | | | | (0.34 | ) | | | (0.19 | ) | | | — | |
| 2015 | | | | 10.53 | | | | 0.36 | (1) | | | (0.24 | ) | | | 0.12 | | | | (0.36 | ) | | | (1.30 | ) | | | — | |
| 2014 | | | | 9.96 | | | | 0.44 | (1) | | | 1.00 | | | | 1.44 | | | | (0.45 | ) | | | (0.42 | ) | | | — | |
2013† | | | | 9.85 | | | | 0.12 | (1) | | | 0.11 | | | | 0.23 | | | | (0.12 | ) | | | — | | | | — | |
2013†† | | | | 11.11 | | | | 0.46 | (1) | | | (1.05 | ) | | | (0.59 | ) | | | (0.46 | ) | | | (0.21 | ) | | | — | |
| Short Duration Bond Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| R6 Shares | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2018* | | | $ | 9.99 | | | $ | 0.09 | (1) | | $ | (0.16 | ) | | $ | (0.07 | ) | | $ | (0.09 | ) | | $ | — | | | $ | — | |
| 2017 | | | | 10.07 | | | | 0.15 | (1) | | | (0.08 | ) | | | 0.07 | | | | (0.15 | ) | | | — | (2) | | | — | |
| 2016 | | | | 10.01 | | | | 0.13 | (1) | | | 0.06 | | | | 0.19 | | | | (0.13 | ) | | | — | (2) | | | — | |
2015(b) | | | | 10.00 | | | | 0.02 | (1) | | | 0.00 | (2) | | | 0.02 | | | | (0.01 | ) | | | — | | | | — | |
| Investor Shares | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2018* | | | $ | 9.99 | | | $ | 0.09 | (1) | | $ | (0.15 | ) | | $ | (0.06 | ) | | $ | (0.09 | ) | | $ | — | | | $ | — | |
| 2017 | | | | 10.07 | | | | 0.14 | (1) | | | (0.07 | ) | | | 0.07 | | | | (0.15 | ) | | | — | (2) | | | — | |
| 2016 | | | | 10.01 | | | | 0.12 | (1) | | | 0.06 | | | | 0.18 | | | | (0.12 | ) | | | — | (2) | | | — | |
2015(b) | | | | 10.00 | | | | 0.01 | (1) | | | 0.01 | | | | 0.02 | | | | (0.01 | ) | | | — | | | | — | |
| Total Return Fixed Income Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investor Shares | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2018* | | | $ | 9.91 | | | $ | 0.15 | | | $ | (0.35 | ) | | $ | (0.20 | ) | | $ | (0.15 | ) | | $ | — | | | $ | — | |
| 2017 | | | | 10.03 | | | | 0.27 | | | | (0.11 | ) | | | 0.16 | | | | (0.22 | ) | | | — | | | | (0.06 | ) |
| 2016 | | | | 9.97 | | | | 0.25 | | | | 0.12 | | | | 0.37 | | | | (0.26 | ) | | | (0.04 | ) | | | (0.01 | ) |
| 2015 | | | | 10.20 | | | | 0.26 | | | | (0.23 | ) | | | 0.03 | | | | (0.26 | ) | | | — | | | | — | |
| 2014 | | | | 9.97 | | | | 0.27 | | | | 0.22 | | | | 0.49 | | | | (0.26 | ) | | | — | | | | — | |
| 2013 | | | | 10.73 | | | | 0.22 | | | | (0.34 | ) | | | (0.12 | ) | | | (0.23 | ) | | | (0.41 | ) | | | — | |
| * | For the six months ended April 30, 2018 (unaudited). All ratios for the period have been annualized, except for the Total Return and Portfolio Turnover Rate. † August 1, 2013 to October 31, 2013 (See Note 1). |
†† | For the year ended July 31, 2013. |
(1) | Per share net investment income calculated using average shares. |
(2) | Amount was less than $0.01 per share |
(a) | Total returns would have been lower had certain Fund expenses not been waived or reimbursed, as applicable, during the periods shown (See Note 3). Total return calculations for a period of less than one year are not annualized. |
(b) | Commenced operations on August 26, 2015. All ratios for the period have been annualized, except for the Total Return and Portfolio Turnover Rate. |
| | | Net Asset Value, End of Period | | | | | | Net Assets, End of Period (000) | | | Ratio of Expenses to Average Net Assets (Including Waivers and Reimbursements, Excluding Offsets) | | | Ratio of Expenses to Average Net Assets (Excluding Waivers, Reimbursements and Offsets) | | | Ratio of Net Investment Income to Average Net Assets (Including Waivers, Reimbursements and Offsets) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| $ | (0.14 | ) | | $ | 8.45 | | | | (3.35 | )% | | $ | 79,300 | | | | 0.36 | % | | | 0.71 | % | | | 3.14 | % | | | 27 | % |
| | (0.57 | ) | | | 8.88 | | | | 1.79 | | | | 76,726 | | | | 0.39 | | | | 0.77 | | | | 3.17 | | | | 62 | |
| | (0.53 | ) | | | 9.31 | | | | 9.80 | | | | 74,232 | | | | 0.39 | | | | 0.75 | | | | 3.48 | | | | 160 | |
| | (1.66 | ) | | | 8.99 | | | | 0.94 | | | | 21,082 | | | | 0.40 | | | | 1.05 | | | | 3.80 | | | | 126 | |
| | (0.87 | ) | | | 10.53 | | | | 15.51 | | | | 24,797 | | | | 0.46 | | | | 0.83 | | | | 4.38 | | | | 53 | |
| | (0.12 | ) | | | 9.96 | | | | 2.32 | | | | 44,782 | | | | 0.46 | | | | 1.05 | | | | 4.75 | | | | 20 | |
| | (0.67 | ) | | | 9.85 | | | | (5.68 | ) | | | 44,354 | | | | 0.46 | | | | 0.84 | | | | 4.29 | | | | 62 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | (0.09 | ) | | $ | 9.83 | | | | (0.58 | )% | | $ | 15,795 | | | | 0.36 | % | | | 2.03 | % | | | 1.88 | % | | | 67 | % |
| | (0.15 | ) | | | 9.99 | | | | 0.77 | | | | 16,189 | | | | 0.39 | | | | 1.88 | | | | 1.49 | | | | 81 | |
| | (0.13 | ) | | | 10.07 | | | | 1.97 | | | | 24,417 | | | | 0.39 | | | | 1.10 | | | | 1.32 | | | | 59 | |
| | (0.01 | ) | | | 10.01 | | | | 0.25 | | | | 24,023 | | | | 0.39 | | | | 2.51 | | | | 0.88 | | | | 22 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | (0.09 | ) | | $ | 9.84 | | | | (0.68 | )% | | $ | 101 | | | | 0.36 | % | | | 2.03 | % | | | 1.88 | % | | | 67 | % |
| | (0.15 | ) | | | 9.99 | | | | 0.77 | | | | 102 | | | | 0.39 | | | | 1.40 | | | | 1.39 | | | | 81 | |
| | (0.12 | ) | | | 10.07 | | | | 1.87 | | | | 1,007 | | | | 0.49 | | | | 1.20 | | | | 1.22 | | | | 59 | |
| | (0.01 | ) | | | 10.01 | | | | 0.22 | | | | 1,001 | | | | 0.54 | | | | 2.66 | | | | 0.73 | | | | 22 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | (0.15 | ) | | $ | 9.56 | | | | (2.00 | )% | | $ | 66,435 | | | | 0.40 | % | | | 0.80 | % | | | 3.22 | % | | | 31 | % |
| | (0.28 | ) | | | 9.91 | | | | 1.65 | | | | 67,199 | | | | 0.40 | | | | 0.85 | | | | 2.95 | | | | 93 | |
| | (0.31 | ) | | | 10.03 | | | | 3.77 | | | | 97,695 | | | | 0.40 | | | | 0.61 | | | | 2.80 | | | | 72 | |
| | (0.26 | ) | | | 9.97 | | | | 0.30 | | | | 183,138 | | | | 0.40 | | | | 0.56 | | | | 2.58 | | | | 93 | |
| | (0.26 | ) | | | 10.20 | | | | 4.97 | | | | 153,951 | | | | 0.40 | | | | 0.53 | | | | 2.65 | | | | 319 | |
| | (0.64 | ) | | | 9.97 | | | | (1.23 | ) | | | 141,390 | | | | 0.40 | | | | 0.59 | | | | 2.09 | | | | 388 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Schroder Mutual Funds
Notes to
Financial Statements
April 30, 2018 (unaudited)
NOTE 1 — ORGANIZATION
Schroder Global Series Trust (“SGST”) is an open-end series management investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”). SGST was organized as a business trust under the laws of The Commonwealth of Massachusetts on May 27, 2003. SGST has an unlimited number of authorized shares, which consists of one diversified series: Schroder North American Equity Fund (the “SGST Fund” or a “Fund”). The Schroder North American Equity Fund seeks long-term capital growth.
Schroder Series Trust (“SST”) is an open-end series management investment company registered under the Investment Company Act. SST was organized as a business trust under the laws of The Commonwealth of Massachusetts on May 6, 1993. SST has an unlimited number of authorized shares, which are divided into five separate series. Included in this report are Schroder Emerging Markets Small Cap Fund, Schroder Core Bond Fund, Schroder Long Duration Investment-Grade Bond Fund, Schroder Short Duration Bond Fund and Schroder Total Return Fixed Income Fund (each a “Fund,” collectively, the “SST Funds,” and together with the SGST Fund, the “Funds” or “Trusts”), all of which are diversified funds. The Schroder Emerging Markets Small Cap Fund seeks long-term capital appreciation. The Schroder Core Bond Fund and Schroder Short Duration Bond Fund seek long-term total return consistent with the preservation of capital. The Schroder Total Return Fixed Income Fund seeks a high level of total return. The Schroder Long Duration Investment-Grade Bond Fund seeks to achieve a total return that exceeds that of the Fund’s benchmark, the Bloomberg Barclays U.S. Long Government/Credit Bond Index.
Schroder Core Bond Fund commenced operations January 31, 2018. Schroder Long Duration Investment-Grade Bond Fund commenced operations on October 3, 2011 as a separate series of The Advisors Inner Circle Fund II (formerly known as STW Long Duration Investment-Grade Bond Fund, the “Predecessor Fund”) and was advised by STW Fixed Income Management LLC (“STW”). On April 2, 2013, Schroder U.S. Holdings Inc., the parent company of Schroder Investment Management North America Inc. (“SIMNA”), acquired all outstanding interests in STW. Effective June 24, 2013, all assets and liabilities of the STW Long Duration Investment-Grade Bond Fund were acquired by Schroder Long Duration Investment-Grade Bond Fund pursuant to an Agreement and Plan of Reorganization dated May 3, 2013 (the “Fund Merger”). In the Fund Merger, shareholders of the Predecessor Fund received Investor Shares of the Schroder Long Duration Investment-Grade Bond Fund in exchange for their Institutional Class Shares of the Predecessor Fund. Because the Schroder Long Duration Investment-Grade Bond Fund had no investment operations prior to the closing of the Fund Merger, and based on the similarity of the Fund to the Predecessor Fund, the Predecessor Fund is treated as the survivor of the Fund Merger for accounting and performance reporting purposes. Accordingly, all performance and other information shown for the Schroder Long Duration Investment-Grade Bond Fund for periods prior to June 24, 2013 is that of the Predecessor Fund.
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES
The Funds are investment companies that apply the accounting and reporting guidance issued in Topic 946 by the U.S. Financial Accounting Standards Board. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates, and those differences could be material.
The following is a summary of significant accounting policies followed by the Funds, which are in conformity with U.S. GAAP:
SECURITY VALUATION: Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on an exchange or market (foreign or
Schroder Mutual Funds
Notes to Financial Statements
(continued)April 30, 2018(unaudited)
domestic) on which they are traded on valuation date (or at approximately 4:00 pm ET if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. If available, debt securities are priced based upon valuations provided by independent, third- party pricing agents. Such values generally reflect the last reported sales price if the security is actively traded. The third-party pricing agents may also value debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the market value for such securities. Such methodologies generally consider such factors as security prices, yields, maturities, call features, ratings and developments relating to specific securities in arriving at valuations. On the first day a new debt security purchase is recorded, if a price is not available on the automated pricing feeds from our primary and secondary pricing vendors nor is it available from an independent broker, the security may be valued at its purchase price. Each day thereafter, the debt security will be valued according to the Trusts’ fair value procedures until an independent source can be secured. Debt obligations with remaining maturities of sixty days or less may be valued at their amortized cost, provided that it is determined the amortized cost continues to approximate fair value. Should existing credit, liquidity or interest rate conditions in the relevant markets and issuer specific circumstances suggest that amortized cost does not approximate fair value, then the amortized cost method may not be used. The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates.
Securities for which market prices are not “readily available” are valued in accordance with fair value procedures established by the Funds’ Board of Trustees (the “Board”). The Funds’ fair value procedures are implemented through a fair value committee (the “Committee”) designated by the Board. Some of the more common reasons that may necessitate that a security be valued using fair value procedures include: the security’s trading has been halted or suspended; the security has been de-listed from a national exchange; the security’s primary trading market is temporarily closed at a time when under normal conditions it would be open; the security has not been traded for an extended period of time; the security’s primary pricing source is not able or willing to provide a price; or trading of the security is subject to local government- imposed restrictions. When a security is valued in accordance with the fair value procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee.
Swaps are marked-to-market daily based upon quotations from market makers and the resulting changes in market values, if any, are recorded as an unrealized gain or loss in the Statements of Operations.
Futures contracts that are traded on an exchange are valued at their last reported sales price as of the valuation date.
Options for which the primary market is a national securities exchange are valued at the last sale price on the exchange on which they are traded, or, in the absence of any sale, at the closing bid price for long positions and at the closing ask price for written options. Options not traded on a national securities exchange are valued at the last quoted bid price.
For securities that principally trade on a foreign market or exchange, a significant gap in time can exist between the time of a particular security’s last trade and the time at which the Fund calculates its net asset value. The closing prices of such securities may no longer reflect their market value at the time the Fund calculates net asset value if an event that could materially affect the value of those securities (a “Significant Event”) has occurred between the time of the security’s last close and the time that the Fund calculates net asset value. A Significant Event may relate to a single issuer or to an entire market sector. If SIMNA (the “Adviser”) of the Funds becomes aware of a Significant Event that has occurred with respect to a security or group of securities after the closing of the exchange or market on which the security or securities principally trade, but before the time at which the Fund calculates net asset value, it may request that a Committee meeting be called. In addition, SEI Investments Global Funds Services (the “Administrator”), a wholly
Schroder Mutual Funds
Notes to Financial Statements (continued)
April 30, 2018 (unaudited)
owned subsidiary of SEI Investments Company, monitors price movements among certain selected indices, securities and/or baskets of securities that may be an indicator that the closing prices received earlier from foreign exchanges or markets may not reflect market value at the time a Fund calculates net asset value. If price movements in a monitored index or security exceed levels established by the Administrator, the Administrator notifies the Adviser if a Fund is holding a relevant security that such limits have been exceeded. In such event, the Adviser makes the determination whether a Committee meeting should be called based on the information provided.
Schroder Emerging Markets Small Cap Fund uses MarkIt Fair Value (“MarkIt”) as a third party fair valuation vendor. MarkIt provides a fair value for foreign securities in the Fund based on certain factors and methodologies (involving, generally, tracking valuation correlations between the U.S. market and each non-U.S. security) applied by MarkIt in the event that there is a movement in the U.S. markets that exceeds a specific threshold established by the Committee. The Committee establishes a “confidence interval” which is used to determine the level of correlation between the value of a foreign security and movements in the U.S. market before a particular security is fair valued when the threshold is exceeded. In the event that the threshold established by the Committee is exceeded on a specific day, the Fund values its non-U.S. securities that exceed the applicable “confidence interval” based upon the fair values provided by MarkIt. In such event, it is not necessary to hold a Committee meeting. In the event that the Adviser believes that the fair values provided by MarkIt are not reliable, the Adviser contacts the Administrator and can request that a meeting of the Committee be held.
If a local market in which the Fund owns securities is closed for one or more days, the Fund shall value all securities held in that corresponding currency based on the fair value prices provided by MarkIt using the predetermined confidence interval discussed above.
In accordance with the authoritative guidance on fair value measurements and disclosure under U.S. GAAP, the Funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
| | ● | Level 1 — Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date |
| ● | Level 2 — Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, referenced indices, quoted prices in inactive markets, adjusted quoted prices in active markets, etc.) |
| ● | Level 3 — Prices, inputs or proprietary modeling techniques which are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
Investments are classified within the level of the lowest significant input considered in determining fair value. Investments classified within Level 3 whose fair value measurement considers several inputs may include Level 1 or Level 2 inputs as components of the overall fair value measurement.
For the period ended April 30, 2018, there have been no significant changes to the Funds’ fair valuation methodologies. Fair value measurement classifications are summarized in each Fund’s Schedule of Investments.
FEDERAL INCOME TAXES: It is the intention of each Fund to qualify, or continue to qualify, as a “regulated investment company” by complying with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended. If a Fund qualifies as a regulated investment company that is accorded special tax
Schroder Mutual Funds
Notes to Financial Statements (continued)
April 30, 2018(unaudited)
treatment, the Fund will not be subject to Federal income taxes to the extent that, among other things, it distributes substantially all of its taxable income, including realized capital gains, for the fiscal year in a timely manner, to its shareholders in the form of dividends. In addition, as a result of distributing substantially all of their net investment income during each calendar year, capital gains and certain other amounts, if any, the Funds will not be subject to a Federal excise tax. The Funds evaluate tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns to determine whether it is “more- likely than-not” (i.e., greater than 50%) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions deemed to meet the more-likely-than- not threshold are recorded as a tax benefit or expense in the current year. The Funds did not record any tax provision in the current period. However, management’s conclusions regarding tax positions may be subject to review and adjustment at a later date based on factors including, but not limited to, examination by tax authorities (i.e., the last three tax year ends, as applicable), on-going analysis of and changes to tax laws, regulations and interpretations thereof.
As of, and during the period ended April 30, 2018, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period, the Funds did not incur any tax-related interest or penalties.
INVESTMENT TRANSACTIONS: Investment security transactions are recorded as of trade date. Realized gains and losses on sales of investments are determined on the basis of identified cost. Capital gain taxes on securities in certain foreign countries are accrued on unrealized appreciation and are due when realized.
INVESTMENT INCOME: Dividend income is recorded on the ex-dividend date. Interest income and expense is recorded on an accrual basis. Discounts and premiums on fixed income securities are accreted and amortized using the effective interest method. Realized gains (losses) on paydowns of mortgage-backed and asset-backed securities are recorded as an adjustment to interest income.
EXPENSES: Expenses are recorded on an accrual basis. Many of the expenses of the Funds can be directly attributable to a specific Fund. Expenses not directly attributable to a specific Fund are allocated among the Funds based on relative average net assets or another appropriate methodology. Class specific expenses are borne by that class. Fund expenses are pro-rated to the respective classes based on relative net assets.
CLASSES OF SHARES: Income, realized and unrealized gains and losses of a Fund are prorated to the respective classes of shares based on relative net assets.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends and distributions to shareholders from net investment income are declared and distributed at least annually for North American Equity Fund and Emerging Markets Small Cap Fund, and monthly for Schroder Core Bond Fund, Schroder Short Duration Bond Fund and Schroder Long Duration Investment-Grade Bond Fund. Schroder Total Return Fixed Income Fund declares dividends to shareholders from net investment income daily and distributes these dividends monthly. Distributions to shareholders from net realized capital gains, if any, are declared and distributed at least annually for each of the Funds.
FOREIGN CURRENCY: Foreign currency amounts are translated into U.S. dollars at the mean of the bid and asked prices of such currencies against U.S. dollars as follows: (i) assets and liabilities at the rate of exchange at the end of the respective period; and (ii) purchases and sales of securities and income and expenses at the rate of exchange prevailing on the dates of such transactions. Each Fund generally bifurcates that portion of realized gains (losses) on investments in debt securities which is attributed to changes in foreign exchange rates from that which is due to changes in market prices of debt securities. That portion of gains (losses) is included in the “Statements of Operations” under “Net realized gain (loss) on foreign currencies.” For foreign equity securities, these changes are included in the “Statements of Operations” under “Net realized and unrealized gain (loss) on investments.” Each Fund reports certain foreign currency related transactions as components of realized gains (losses) for financial reporting purposes, whereas such components are
Schroder Mutual Funds
Notes to Financial Statements (continued)
April 30, 2018 (unaudited)
treated as ordinary income (loss) for federal income tax purposes. Certain Funds may enter into forward foreign currency contracts to protect the U.S. dollar value of the underlying portfolio of securities against the effect of possible adverse movements in foreign exchange rates. Certain Funds may also seek to gain currency exposure or otherwise attempt to increase a Fund’s total return by holding such forward foreign currency contracts. Principal risks associated with such transactions include the movement in value of the foreign currency relative to the U.S. dollar and the ability of the counterparty to perform. Fluctuations in the value of such forward foreign currency transactions are recorded daily as unrealized gain or loss; realized gain or loss includes net gain or loss on transactions that have terminated by settlement or by the Funds entering into offsetting commitments.
WHEN-ISSUED SECURITIES: Certain Funds may purchase securities on a when-issued, delayed delivery, or forward commitment basis, including TBAs, during the period covered by this report. These transactions involve a commitment by the Fund to purchase a security for a predetermined price or yield, with payments and delivery taking place more than seven days in the future, or after a period longer than the customary settlement period for that type of security. These transactions may increase the overall investment exposure for a Fund (and so may create investment leverage) and involve a risk of loss if the value of the securities declines prior to the settlement date.
CONVERTIBLE SECURITIES: Certain Funds may invest in securities that are convertible into preferred and common stocks, and so subject to the risks of investments in both debt and equity securities. The market value of convertible securities tends to decline as interest rates increase and, conversely, tends to increase as interest rates decline. In addition, because of the conversion feature, the market value of convertible securities tends to vary with fluctuations in the market value of the underlying preferred and common stocks and, therefore, also will react to variations in the general market for equity securities.
FUTURES: Financial futures contracts are valued based upon their quoted daily settlement prices; changes in initial settlement value (represented by cash paid to or received from brokers as “variation margin”) are accounted for as unrealized appreciation (depreciation). When futures contracts are closed, the difference between the opening value at the date of purchase and the value at closing is recorded as realized gain or loss in the Statements of Operations.
Futures contracts are generally utilized in order to hedge against unfavorable changes in the value of securities or otherwise to attempt to increase a Fund’s total return. Futures contracts involve leverage and are subject to market risk that may exceed the amounts recognized in the Statements of Assets and Liabilities. Risks arise from the possible significant movements in prices. The change in value of futures contracts primarily corresponds to the value of the securities or other index or amount underlying the contracts, but may not precisely correlate with the change in value of such securities or other index or amount. In addition, there is the risk that a Fund may not be able to enter into a closing transaction because of an illiquid secondary market.
OPTION/SWAPTION TRANSACTIONS: Certain Funds may purchase and write call and put options on securities, securities indices, swaps (“swaptions”) and foreign currencies, provided such options/swaptions are traded on a national securities exchange or an over-the-counter market. When any of the Funds writes or purchases a covered call or put option/swaption, an amount equal to the premium received is included in that Fund’s statement of assets and liabilities as a liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option/swaption. If an option/swaption expires on its stipulated expiration date or if the Fund enters into a closing purchase transaction, a gain or loss is realized. If a written call option/swaption is exercised, a gain or loss is realized for the sale of the underlying security and the proceeds from the sale are increased by the premium originally received. If a written put option/swaption is exercised, the cost of the security acquired is decreased by the premium originally received. As writer of an option/swaption, the Fund has no control over whether the underlying securities are subsequently sold (call) or purchased (put) and, as a result, bears the market risk of an unfavorable change in the price of the security or index underlying the written option/swaption. When any of the Funds
Notes to Financial Statements (continued)
April 30, 2018(unaudited)
purchases a call or put option/swaption, an amount equal to the premium paid is included in that Fund’s statement of assets and liabilities as an investment, and is subsequently marked-to-market to reflect the current market value of the option/swaption. If an option/swaption expires on the stipulated expiration date or if a Fund enters into a closing sale transaction, a gain or loss is realized. If a Fund exercises a call, the cost of the security acquired is increased by the premium paid for the call. If a Fund exercises a put option/ swaption, a gain or loss is realized from the sale of the underlying security, and the proceeds from such sale are decreased by the premium originally paid. Written and purchased options/swaptions are non-income producing securities. The option/swaption techniques utilized are generally to hedge against changes in interest rates, foreign currency exchange rates or securities prices in order to establish more definitely the effective return on securities or currencies held or intended to be acquired by a Fund, to reduce the volatility of the currency exposure associated with an investment in non-U.S. securities, or as an efficient means of adjusting exposure to the bond, equity and currency markets.
Refer to each Fund’s Schedule of Investments for details regarding open option/swaption contracts as of April 30, 2018, if applicable.
SWAP AGREEMENTS: Certain Funds may enter into swap agreements, including credit default swaps and interest rate swaps and other types of exchange-traded or over-the-counter transactions with broker- dealers or other financial institutions. Depending on their structures, swap agreements may increase or decrease a Fund’s exposure to long- or short-term interest rates (in the United States or abroad), foreign currency values, mortgage securities, corporate borrowing rates, or other factors such as security prices or inflation rates. The value of a Fund’s swap positions would increase or decrease depending on the changes in value of the underlying rates, currency values, or other indices or measures. Swap agreements are privately negotiated in the over-the counter market (“OTC swaps”) or may be executed in a multilateral or other trade facility platform, such as a registered commodities exchange (“centrally cleared swaps”).
In a “credit default” swap transaction, one party pays what is, in effect, an insurance premium through a stream of payments to another party in exchange for the right to receive a specified return in an event of default (or similar events) by a third party on its obligations. Therefore, in a credit default swap, a Fund may pay a premium and, in return, have the right to put certain bonds or loans to the counterparty upon default by the issuer of such bonds or loans (or similar events) and to receive in return the par value of such bonds or loans (or another agreed upon amount). A Fund could also receive the premium referenced above, and be obligated to pay a counterparty the par value of certain bonds or loans upon a default (or similar event) by the issuer. A Fund’s ability to realize a profit from such transactions will depend on the ability of the financial institutions with which it enters into the transactions to meet their obligations to the Fund. Under certain circumstances, suitable transactions may not be available to a Fund, or a Fund may be unable to close out its position under such transactions at the same time, or at the same price, as if it had purchased comparable publicly traded securities.
“Interest rate” swaps involve the exchange by a Fund with another party of their respective commitments to pay or receive interest (e.g., an exchange of floating rate payments for fixed rate payments) with respect to a notional amount of principal. “Inflation- linked” swaps are used to transfer inflation risk from one party to another through an exchange of cash flows. In an inflation-linked swap, one party pays a fixed rate on a notional principal amount, while the other party pays a floating rate linked to an inflation index, such as the Consumer Price Index. The Funds could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or if the counterparty defaults on its obligation to perform. A Fund’s ability to engage in certain swap transactions may be limited by tax considerations.
Swaps are marked-to-market daily and the resulting changes in market values, if any, are recorded as an unrealized gain or loss in the Statement of Operations. Net payments of interest are recorded as realized gains or losses. Daily changes in valuation of centrally cleared swaps, if any, are recorded as a receivable or payable for the change in value as appropriate (“variation margin”) on the Statements of Assets and Liabilities.
Schroder Mutual Funds
Notes to Financial Statements (continued)
April 30, 2018 (unaudited)
Legislative and regulatory reforms, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, have resulted in new regulation of swap agreements, including clearing, margin, reporting, recordkeeping and registration requirements. New regulations could, among other things, restrict a Fund’s ability to engage in swap transactions (for example, by making certain types of swap transactions no longer available to a Fund) and/or increase the costs of such swap transactions (for example, by increasing margin or capital requirements), and a Fund may as a result be unable to execute its investment strategies in a manner the Fund might otherwise choose.
CUSTODY OFFSET: The Funds have an arrangement with the custodian whereby interest earned on uninvested cash balances is used to offset a portion of the custodian fees. The amounts are included in custodian fees and custody offset on the Statements of Operations.
OFFERING COSTS: During the period ended April 30, 2018, the Schroder Core Bond Fund commenced operations and incurred offering costs of $55,149.
NOTE 3 — INVESTMENT ADVISORY FEES, ADMINISTRATION AGREEMENTS AND DISTRIBUTION PLANS
The Funds have entered into investment advisory agreements with SIMNA. Under these agreements, SIMNA provides investment management services and is entitled to receive compensation for its services, payable monthly for the SGST Fund and the SST Funds, at the following annual rates based on average daily net assets of each Fund taken separately. No changes to the management fee rates the Funds pay to SIMNA occurred due to the Transition. In order to limit the expenses of the R6 and Investor Shares of certain Funds, as applicable, SIMNA has contractually agreed to waive management fees, pay and/or reimburse the applicable Fund for expenses through February 28, 2019, to the extent that the total annual fund operating expenses of a Fund (other than acquired fund fees and expenses, other indirect acquired fund expenses, interest, taxes, and extraordinary expenses) allocable to each share class exceed the following annual rates (based on the average daily net assets attributable to each share class):
| | | Expense Limitation | |
| | | Management Fee | | | R6 Shares | | | Investor Shares | |
| Schroder North American Equity Fund | | | 0.25 | % | | | N/A | | | | N/A | |
Schroder Emerging Markets Small Cap Fund(1) | | | 1.15 | % | | | 1.35 | % | | | 1.50 | % |
| Schroder Core Bond Fund | | | 0.25 | % | | | 0.32 | % | | | N/A | |
Schroder Long Duration Investment-Grade Bond Fund(2) | | | 0.25 | % | | | N/A | | | | 0.32 | % |
Schroder Short Duration Bond Fund(3) | | | 0.25 | % | | | 0.32 | % | | | 0.47 | % |
| Schroder Total Return Fixed Income Fund | | | 0.25 | % | | | N/A | | | | 0.40 | % |
(1) | Prior to July 1, 2017, the management fee was 1.25%, and the expense limitations were 1.50% for R6 Shares and 1.65% for Investor Shares. |
(2) | Prior to April 1, 2018, the management fee was 0.33%. Prior to February 28, 2018, the expense limitation was 0.39% for Investor Shares |
(3) | Prior to April 1, 2018, the management fee was 0.29%. Prior to February 28, 2018, the expense limitations were 0.39% for R6 Shares and 0.54% for Investor Shares. |
N/A — Fund is not currently subject to the expense limitation agreement or Share Class is not currently offered
SIMNA has retained its affiliate Schroder Investment Management North America Limited (“SIMNA Ltd.”) to serve as sub-adviser responsible for the portfolio management of Schroder North American Equity Fund and Schroder Emerging Markets Small Cap Fund. During the reporting period, SIMNA paid SIMNA Ltd. the following percentage of the investment advisory fees it received from Schroder North American Equity Fund and Schroder Emerging Markets Small Cap Fund, after waivers, as set forth below.
Schroder Mutual Funds
Notes to Financial Statements (continued)
April 30, 2018(unaudited)
Effective October 16, 2017:
Fund | | Percentage of Fees Paid to SIMNA Ltd. | |
| Schroder North American Equity Fund | | | 58.5 | % |
| Schroder Emerging Markets Small Cap Fund | | | 58.5 | % |
Prior to October 16, 2017
Fund | | Percentage of Fees Paid to SIMNA Ltd. | |
| Schroder North American Equity Fund | | | 49.5 | % |
| Schroder Emerging Markets Small Cap Fund | | | 49.5 | % |
Each Trust has entered into an administration agreement with SEI Investments Global Funds Services (“SEI” or the “Administrator”), under which the Administrator provides administrative services to the Trust. For these services, the Administrator is paid a fee, which varies based on the average daily net assets of each Fund, subject to certain minimums.
Prior to February 10, 2017, Schroder Fund Advisors LLC (“SFA”), a wholly-owned subsidiary of SIMNA, provided administrative services to the SGST Fund pursuant to an administration agreement between SFA and the Trust. For its services, SFA received no compensation for its services for the SGST Fund. Additionally, prior to February 10, 2017, the Administrator provided sub-administrative and accounting services to the SGST Fund pursuant to a Sub-Administration and Accounting Agreement among the Trust, SFA and the Administrator.
Each Trust and SEI Investments Distribution Co., (“SIDCO”), a wholly-owned subsidiary of SEI Investments, and an affiliate of the Administrator, are parties to a distribution agreement (the “Distribution Agreement”), whereby SIDCO acts as principal underwriter for the Trusts’ shares.
Each Fund has adopted a shareholder servicing plan under which a shareholder servicing fee of up to 0.15% of average daily net assets of Investor Shares of the Funds will be paid to financial intermediaries.
SIMNA or its affiliates may, from time to time, also make payments to financial intermediaries for sub-administration, sub-transfer agency, or other shareholder services or distribution, out of their own resources.
NOTE 4 — DERIVATIVE CONTRACTS
Derivative instruments and hedging activities require enhanced disclosures about the Funds’ derivative and hedging activities, including how such activities are accounted for and their effect on the Funds’ financial position, performance, and cash flows.
The fair value of derivative instruments as of April 30, 2018, was as follows:
| Fund | Statement of Assets and Liabilities Location | | | | |
| Schroder North American Equity Fund | | | | | |
| Equity contracts | | | | | |
| Futures contracts | Unrealized appreciation/(depreciation) on futures contracts | | $ | — | | | $ | (487,928 | ) |
| Foreign exchange contracts | | | | | | | | | |
| Forward contracts | Unrealized appreciation/(depreciation) on forward foreign currency contracts | | | 216,412 | | | | — | |
| | | $ | 216,412 | | | $ | (487,928 | ) |
Schroder Mutual Funds
Notes to Financial Statements (continued)
April 30, 2018(unaudited)
| Fund | Statement of Assets and Liabilities Location | | | | | | |
| Schroder Short Duration Bond Fund | | | | | | | |
| Interest rate contracts | | | | | | | |
| Futures contracts | Unrealized appreciation/(depreciation) on futures contracts | | $ | — | | | $ | (15,480 | ) |
| | | $ | — | | | $ | (15,480 | ) |
| Schroder Total Return Fixed Income Fund | | | | | | | | | |
| Interest rate contracts | | | | | | | | | |
| Futures contracts | Unrealized appreciation/(depreciation) on futures contracts | | $ | 28,308 | | | $ | (172,873 | ) |
| Foreign exchange contracts | | | | | | | | | |
| Forward contracts | Unrealized appreciation/(depreciation) on forward foreign currency contracts | | | — | | | | (13,352 | ) |
| Credit contracts | | | | | | | | | |
| Centrally cleared swap contracts | Unrealized appreciation/(depreciation) on swap contracts | | | 8,223 | | | | — | |
| | | $ | 36,531 | | | $ | (186,225 | ) |
The effect of derivative instruments on the Statement of Operations for the period ended April 30, 2018, was as follows:
The amount of net realized gain (loss) and change in unrealized appreciation (depreciation) on derivatives:
| Fund | | | | | | | | Total | |
| Schroder North American Equity Fund | | | | | | | | | |
| Equity contracts | | | | | | | | | |
| Futures contracts | | $ | 41,203 | | | $ | (858,201 | ) | | $ | (816,998 | ) |
| Foreign exchange contracts | | | | | | | | | | | | |
| Forward contracts | | | 99,834 | | | | (134,792 | ) | | | (34,958 | ) |
| | $ | 141,037 | | | $ | (992,993 | ) | | $ | (851,956 | ) |
| | | | | | | | | | | | | |
| Schroder Short Duration Bond Fund | | | | | | | | | | | | |
| Interest rate contracts | | | | | | | | | | | | |
| Futures contracts | | $ | (40,533 | ) | | $ | (5,327 | ) | | $ | (45,860 | ) |
| | | | | | | | | | | | | |
| Schroder Total Return Fixed Income Fund | | | | | | | | | | | | |
| Interest rate contracts | | | | | | | | | | | | |
| Futures contracts | | $ | (310,437 | ) | | $ | (24,470 | ) | | $ | (334,907 | ) |
| Purchased options contracts | | | (5,108 | ) | | | 1,046 | | | | (4,062 | ) |
| Foreign exchange contracts | | | | | | | | | | | | |
| Forward contracts | | | 28,180 | | | | (73,971 | ) | | | (45,791 | ) |
| Credit contracts | | | | | | | | | | | | |
| Swap contracts | | | (97,059 | ) | | | 78,496 | | | | (18,563 | ) |
| | $ | (384,424 | ) | | $ | (18,899 | ) | | $ | (403,323 | ) |
Schroder Mutual Funds
Notes to Financial Statements (continued)
April 30, 2018(unaudited)
| * | Futures contracts are included in net realized gain (loss) on futures, forward contracts are included in net realized gain (loss) on forward foreign currency contracts and foreign currency transactions, swap contracts are included in net realized loss on swap contracts, options are included in net realized loss on purchased options. |
| ** | Futures contracts are included in change in unrealized depreciation on futures, forward contracts are included in change in unrealized appreciation (depreciation) on forward foreign currency contracts and foreign currency transactions and translations, options are included in change in unrealized appreciation on purchased options and swap contracts are included in change in unrealized appreciation on swap contracts. |
The following table discloses the volume of the futures contracts, forward foreign currency contracts, options contracts and swap contracts during the period ended April 30, 2018:
| Futures Contracts: | | Schroder North American Equity Fund | | | Schroder Short Duration Bond Fund | | | Schroder Total Return Fixed Income Fund | |
| Average Notional Amount Outstanding | | $ | 18,256,030 | | | $ | 4,063,867 | | | $ | 16,307,494 | |
| | | | | | | | | | | | | |
| Forward Foreign Currency Contracts: | | | | | | | | | | | | |
| Average Notional Amount Outstanding | | $ | (11,705,138 | ) | | $ | — | | | $ | (808,360 | ) |
| | | | | | | | | | | | | |
| Swap Contracts: | | | | | | | | | | | | |
| Average Notional Amount Outstanding | | $ | — | | | $ | — | | | $ | 109,753 | |
In accordance with the authoritative guidance under U.S. GAAP, “Disclosures about Offsetting Assets and Liabilities” entities are required to disclose information about financial instruments and derivative instruments that have been offset or that are subject to enforceable master netting agreements. The Funds do not offset such instruments on the Statement of Assets and Liabilities, rather such instruments are presented on a gross basis.
The following is a summary by derivative type of the market value of over the counter (“OTC”) financial derivative instruments and collateral (received)/pledged by counterparty as of April 30, 2018:
| | Gross Assets- Recognized in the Statement of Assets and Liabilities | | | Gross Liabilities- Recognized in the Statement of Assets and Liabilities | | | Net Amount Available to be Offset | | | Cash Collateral Pledged or (Received)† | | | Net Amount ‡ | |
| Schroder North American Equity Fund | | | | | | | | | | | | | | | |
| | Forward Contracts | | | Forward Contracts | | | | | | | | | | |
| HSBC | | $ | 216,412 | | | $ | — | | | $ | 216,412 | | | $ | — | | | $ | 216,412 | |
| | | | | | | | | | | | | | | | | | | | | |
| Schroder Total Return Fixed Income Fund | | | | | | | | | | | | | | | | | | | | |
| | Forward Contracts | | | Forward Contracts | | | | | | | | | | | | | |
| Morgan Stanley | | $ | — | | | $ | (13,352 | ) | | $ | (13,352 | ) | | $ | — | | | $ | (13,352 | ) |
| † | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
| ‡ | Net amount represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. |
Schroder Mutual Funds
Notes to Financial Statements (continued)
April 30, 2018 (unaudited)
NOTE 5 — REDEMPTION FEES
Schroder Emerging Markets Small Cap Fund generally imposes a 2.00% redemption fee on shares redeemed (including in connection with an exchange) two months or less from their date of purchase. These fees, which are not sales charges, are retained by the Fund and not paid to SIDCO or any other entity. The redemption fees are included in the Statements of Changes in Net Assets under “Redemption fees,” and are included as part of “Capital paid-in” on the Statements of Assets and Liabilities. There were no redemption fees retained for the period ended April 30, 2018.
NOTE 6 — INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding short-term and U.S. Government securities for each Fund, for the period ended April 30, 2018 were as follows:
| | Purchases | | | | |
| Schroder North American Equity Fund | | $ | 320,304,214 | | | $ | 307,517,341 | |
| Schroder Emerging Markets Small Cap Fund | | | 409,688 | | | | 427,878 | |
| Schroder Core Bond Fund | | | 842,455 | | | | 1,295,047 | |
| Schroder Long Duration Investment-Grade Bond Fund | | | 8,707,718 | | | | 11,390,619 | |
| Schroder Short Duration Bond Fund | | | 3,821,570 | | | | 4,047,733 | |
| Schroder Total Return Fixed Income Fund | | | 12,909,140 | | | | 11,586,789 | |
Purchases and proceeds from sales and maturities of U.S. Government securities for the period ended April 30, 2018 were as follows:
| | | Purchases | | | | |
| Schroder Core Bond Fund | | $ | 3,921,698 | | | $ | 4,664,852 | |
| Schroder Long Duration Investment-Grade Bond Fund | | | 18,989,504 | | | | 9,948,554 | |
| Schroder Short Duration Bond Fund | | | 6,394,139 | | | | 5,204,759 | |
| Schroder Total Return Fixed Income Fund | | | 6,587,086 | | | | 7,510,453 | |
NOTE 7 — FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. GAAP. These book/tax differences are either temporary or permanent in nature. Any permanent differences, which may result in distribution reclassifications, are primarily due to differing treatments for gains resulting from investments in passive foreign investment companies, equalization distribution, reclassifications of long-term capital gain distributions on real estate investment trust securities, partnership investments, foreign currency transactions and paydowns. Distributions from short- term gains and from gains on foreign currency transactions are treated as distributions from ordinary income for tax purposes.
At October 31, 2017, the Funds reclassified the following permanent amounts between capital paid-in, undistributed net investment income and accumulated realized gain (loss):
Schroder Mutual Funds
Notes to Financial Statements (continued)
April 30, 2018(unaudited)
| | Increase (Decrease) Undistributed Net Investment Income | | | Increase (Decrease) Accumulated Realized Gain (Loss) | | | Increase (Decrease) Capital Paid-in | |
| Schroder North American Equity Fund | | $ | (481,660 | ) | | $ | 481,810 | | | $ | (150 | ) |
| Schroder Emerging Markets Small Cap Fund | | | (998 | ) | | | (2,383,789 | ) | | | 2,384,787 | |
| Schroder Long Duration Investment-Grade Bond Fund | | | (991 | ) | | | 991 | | | | — | |
| Schroder Short Duration Bond Fund | | | (478 | ) | | | 478 | | | | — | |
| Schroder Total Return Fixed Income Fund | | | (440,879 | ) | | | 440,879 | | | | — | |
The tax character of dividends and distributions declared during the years or periods ended October 31, 2017 and October 31, 2016, was as follows:
| Schroder North American Equity Fund | | | | | Long-Term Capital Gain | | | | | | Total | |
| 2017 | | $ | 24,298,359 | | | $ | 27,381,132 | | | $ | — | | | $ | 51,679,491 | |
| 2016 | | | 20,753,720 | | | | 26,084,912 | | | | — | | | | 46,838,632 | |
| Schroder Emerging Markets Small Cap Fund | | | | | | | | | | | | | | | | |
| 2017 | | | 578,111 | | | | 102,320 | | | | — | | | | 680,431 | |
| Schroder Long Duration Investment-Grade Bond Fund | | | | | | | | | | | | | | | | |
| 2017 | | | 4,130,015 | | | | 501,764 | | | | — | | | | 4,631,779 | |
| 2016 | | | 1,983,704 | | | | 655,687 | | | | — | | | | 2,639,391 | |
| Schroder Short Duration Bond Fund | | | | | | | | | | | | | | | | |
| 2017 | | | 270,060 | | | | — | | | | — | | | | 270,060 | |
| 2016 | | | 339,264 | | | | — | | | | — | | | | 339,264 | |
| Schroder Total Return Fixed Income Fund | | | | | | | | | | | | | | | | |
| 2017 | | | 1,503,800 | | | | — | | | | 397,236 | | | | 1,901,036 | |
| 2016 | | | 4,231,084 | | | | — | | | | 129,115 | | | | 4,360,199 | |
As of October 31, 2017, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
| | | Undistributed Ordinary Income | | | Undistributed Long-Term Capital Gain | | | Capital Loss Carryforwards | | | Unrealized Appreciation (Depreciation) | | | Other Temporary Differences | | | Total Distributable Earnings (Accumulated Losses) | |
| Schroder North American Equity Fund | | $ | 29,237,303 | | | $ | 24,894,861 | | | $ | — | | | $ | 313,082,910 | | | $ | (23 | ) | | $ | 367,215,051 | |
| Schroder Emerging Markets Small Cap Fund | | | 45,407 | | | | 314,600 | | | | — | | | | 523,852 | | | | (47 | ) | | | 883,812 | |
| Schroder Long Duration Investment-Grade Bond Fund. . | | | 25,137 | | | | — | | | | (558,928 | ) | | | 1,751,161 | | | | — | | | | 1,217,370 | |
| Schroder Short Duration Bond Fund | | | 3,348 | | | | — | | | | (41,060 | ) | | | 39,907 | | | | (130 | ) | | | 2,065 | |
| Schroder Total Return Fixed Income Fund | | | — | | | | — | | | | (2,703,306 | ) | | | 33,016 | | | | (243,797 | ) | | | (2,914,087 | ) |
Schroder Mutual Funds
Notes to Financial Statements (continued)
April 30, 2018 (unaudited)
Each Fund may use its tax basis capital loss carryforwards listed above to offset taxable capital gains realized in subsequent years for federal income tax purposes. If a Fund incurs or has incurred net capital losses in taxable years beginning after December 22, 2010 (“post-RIC Mod losses”), those losses will be carried forward to one or more subsequent taxable years without expiration; any such carryforward losses will retain their character as short-term or long-term.
The Funds listed below have the following post-RIC Mod losses, which do not expire:
| | | Short-Term Loss | | | Long-Term Loss | | | Total | |
| Schroder Long Duration Investment-Grade Bond Fund | | $ | 558,928 | | | $ | — | | | $ | 558,928 | |
| Schroder Short Duration Bond Fund | | | 27,982 | | | | 13,078 | | | | 41,060 | |
| Schroder Total Return Fixed Income Fund | | | 388,904 | | | | 2,314,402 | | | | 2,703,306 | |
At April 30, 2018, the identified cost for Federal income tax purposes of investments owned by each Fund and their respective gross unrealized appreciation and depreciation were as follows:
| | | | | Gross Unrealized Appreciation | | | Gross Unrealized (Depreciation) | | | Net Unrealized Appreciation (Depreciation) | |
| Schroder North American Equity Fund | | $ | 754,050,984 | | | $ | 315,333,439 | | | $ | (25,679,825 | ) | | $ | 289,653,614 | |
| Schroder Emerging Markets Small Cap Fund | | | 1,623,295 | | | | 597,593 | | | | (53,297 | ) | | | 544,296 | |
| Schroder Core Bond Fund | | | 18,640,505 | | | | 1,346 | | | | (330,417 | ) | | | (329,071 | ) |
| Schroder Long Duration Investment-Grade Bond Fund. . . | | | 80,940,911 | | | | 871,742 | | | | (3,316,056 | ) | | | (2,444,314 | ) |
| Schroder Short Duration Bond Fund | | | 15,835,860 | | | | 5,910 | | | | (153,637 | ) | | | (147,727 | ) |
| Schroder Total Return Fixed Income Fund | | | 66,914,868 | | | | 176,309 | | | | (1,839,725 | ) | | | (1,663,416 | ) |
NOTE 8 — IN-KIND TRANSFERS
On January 31, 2018, the Schroder Core Bond Fund issued shares for an in-kind subscription.
| | Shares Issued | | | | | | Cash | | | Total | |
| Schroder Core Bond Fund | | $ | 2,005,476 | | | $ | 19,836,159 | | | $ | 218,606 | | | | 20,054,765 | |
NOTE 9 — PORTFOLIO INVESTMENT RISKS
Below are summaries of some, but not all, of the principal risks of investing in one or more of the Funds, each of which could adversely affect a Fund’s NAV, yield and total return. Each risk listed below does not necessarily apply to each Fund, and you should read each Fund’s prospectus carefully for a description of the principal risks associated with investing in a particular Fund.
Schroder Emerging Markets Small Cap Fund has a relatively large portion of its assets invested in companies or issuers domiciled in particular foreign countries, including emerging markets. The Fund may be more susceptible to political, social and economic events adversely affecting those countries and such issuers.
Schroder Emerging Markets Small Cap Fund may invest more than 25% of its total assets in issuers located in any one country or group of countries. When a Fund invests in a foreign country, it is susceptible to a
Schroder Mutual Funds
Notes to Financial Statements (continued)
April 30, 2018(unaudited)
range of factors that could adversely affect its holdings in issuers of that country, including political and economic developments and foreign exchange-rate fluctuations. As a result of investing substantially in a single country, the value of the Fund’s assets may fluctuate more widely than the value of shares of a comparable fund with a lesser degree of geographic concentration. The Funds may invest in countries with limited or developing capital markets. Investments in these markets may involve greater risk than investments in more developed markets.
Schroder Core Bond Fund, Schroder Short Duration Bond Fund and Schroder Total Return Fixed Income Fund invest a portion of their assets in securities of issuers that hold mortgage securities, including subprime mortgage securities. The value of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be adversely affected by shifts in the market’s perception of the issuers and changes in interest rates.
Schroder Core Bond Fund, Schroder Long Duration Investment-Grade Bond Fund and Schroder Short Duration Bond Fund invest a portion of their assets in municipal bonds. Municipal bonds are investments of any maturity issued by states, public authorities or political subdivisions to raise money for public purposes; they include, for example, general obligations of a state or other government entity supported by its taxing powers to acquire and construct public facilities, or to provide temporary financing in anticipation of the receipt of taxes and other revenue. They also include obligations of states, public authorities or political subdivisions to finance privately owned or operated facilities or public facilities financed solely by enterprise revenues. The values of municipal obligations that depend on a specific revenue source to fund their payment obligations may fluctuate as a result of changes in the cash flows generated by the revenue source or changes in the priority of the municipal obligation to receive the cash flows generated by the revenue source. Changes in law or adverse determinations by the Internal Revenue Service or a state tax authority could make the income from some of these obligations taxable.
The yields on municipal bonds depend on a variety of factors, including general money market conditions, effective marginal tax rates, the financial condition of the issuer, general conditions of the municipal bond market, the size of a particular offering, the maturity of the obligation and the rating of the issue. The ratings of nationally recognized securities rating agencies represent their opinions as to the credit quality of the municipal bonds.
A Fund may enter into derivative transactions including futures contracts, options, and swap contracts. Derivatives are financial contracts whose values depend on, or derive from, the value of an underlying asset, reference rate, or index. A Fund’s use of derivative instruments involves risks different from, and possibly greater than, the risks associated with investing directly in securities and other traditional investments. Derivatives are subject to liquidity risk, interest rate risk, and credit risk, and the risk that a derivative transaction may not have the effect the Funds’ adviser anticipated. Derivatives also involve the risk of mispricing or improper valuation and the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate, or index. Derivative transactions typically involve leverage and may be highly volatile. Use of derivatives other than for hedging purposes may be considered speculative and may have the effect of creating investment leverage, and when a Fund invests in a derivative instrument it could lose more than the principal amount invested. Also, suitable derivative transactions may not be available in all circumstances and there can be no assurance that a Fund will engage in these transactions when that would be beneficial. Additional principal risks for the Funds can be found in the prospectus.
NOTE 10 — BENEFICIAL INTEREST
The following table shows the number of shareholders each owning of record, or to the knowledge of the Funds beneficially, 5% or more of shares of a Fund outstanding as of April 30, 2018 and the total percentage of shares of the Fund held by such shareholders. The table includes omnibus accounts that hold shares on behalf of many shareholders.
Schroder Mutual Funds
Notes to Financial Statements (continued)
April 30, 2018 (unaudited)
| | 5% or Greater Shareholders | |
| | | Number | | | % of Fund Held | |
| Schroder North American Equity Fund, Investor Shares | | | 2 | | | | 98.50 | % |
| Schroder Emerging Markets Small Cap Fund, R6 Shares | | | 1 | | | | 100.00 | |
| Schroder Emerging Markets Small Cap Fund, Investor Shares | | | 1 | | | | 99.95 | |
| Schroder Core Bond Fund, R6 Shares | | | 2 | | | | 99.99 | |
| Schroder Long Duration Investment-Grade Bond Fund, Investor Shares | | | 2 | | | | 92.24 | |
| Schroder Short Duration Bond Fund, R6 Shares | | | 2 | | | | 100.00 | |
| Schroder Short Duration Bond Fund, Investor Shares | | | 1 | | | | 99.99 | |
| Schroder Total Return Fixed Income Fund, Investor Shares | | | 5 | | | | 85.08 | |
One account shown above holding 100.00% of the Schroder Emerging Markets Small Cap Fund R6 Shares, 99.95% of the Schroder Emerging Markets Small Cap Fund Investor Shares, 93.75% of the Schroder Short Duration Bond Fund R6 Shares and 99.99% of the Schroder Short Duration Bond Fund Investor Shares is owned by an affiliate of SIMNA.
NOTE 11 — LINE OF CREDIT
The Funds entered into a credit agreement on October 6, 2008, as amended from time to time, that enables them to participate in a $12.5 million committed revolving line of credit with JPMorgan Chase Bank, N.A. Any advance under the line of credit is contemplated primarily for temporary or emergency purposes, or to finance the redemption of the shares of a shareholder of the borrower. Interest is charged to the Funds based on their borrowings at the current reference rate. The Funds pay their pro rata portion of an annual commitment fee of 0.20% on the total amount of the credit facility. There were no borrowings under the line of credit for the period ended April 30, 2018.
NOTE 12 — CAPITAL SHARE TRANSACTIONS
Capital share transactions for the period ended April 30, 2018 (unaudited) and the year ended October 31, 2017 were as follows:
| | North American Equity Fund | | | Emerging Markets Small Cap Fund | | | Core Bond Fund | |
| | | 2018 | | | 2017 | | | 2018 | | | 2017 | | | 2018(a) | |
| R6 Shares: | | | | | | | | | | | | | | | |
| Sales of shares | | | N/A | | | | N/A | | | | — | | | | 293,005 | | | | 10 | |
| Reinvestment of distributions | | | N/A | | | | N/A | | | | 30,920 | | | | 60,342 | | | | 7,632 | |
| Issued in connection with in-kind transfer | | | N/A | | | | N/A | | | | — | | | | — | | | | 2,005,476 | |
| Redemption of shares | | | N/A | | | | N/A | | | | — | | | | (1,498,891 | ) | | | (91,278 | ) |
| Net increase (decrease) in R6 Shares | | | N/A | | | | N/A | | | | 30,920 | | | | (1,145,544 | ) | | | 1,921,840 | |
| Investor Shares: | | | | | | | | | | | | | | | | | | | | |
| Sales of shares | | | 611,037 | | | | 1,602,051 | | | | — | | | | — | | | | N/A | |
| Reinvestment of distributions | | | 3,407,791 | | | | 3,435,994 | | | | 386 | | | | — | | | | N/A | |
| Redemption of shares | | | (48,438 | ) | | | (5,188,404 | ) | | | — | | | | — | | | | N/A | |
| Net increase (decrease) in Investor Shares | | | 3,970,390 | | | | (150,359 | ) | | | 386 | | | | — | | | | N/A | |
Schroder Mutual Funds
Notes to Financial Statements (concluded)
April 30, 2018(unaudited)
| | North American Equity Fund | | | Small Cap Fund Emerging Markets | | | | |
| | 2018 | | | 2017 | | | 2018 | | | 2017 | | | 2018(a) | |
| Advisor Shares*: | | | | | | | | | | | | | | | |
| Sales of shares | | | — | | | | 23 | | | | N/A | | | | N/A | | | | N/A | |
| Reinvestment of distributions | | | — | | | | 532 | | | | N/A | | | | N/A | | | | N/A | |
| Redemption of shares | | | — | | | | (12,200 | ) | | | N/A | | | | N/A | | | | N/A | |
| Net decrease in Advisor Shares | | | — | | | | (11,645 | ) | | | N/A | | | | N/A | | | | N/A | |
| | Long Duration Investment-Grade Bond Fund | | | | | | Total Return Fixed Income Fund | |
| | 2018 | | | 2017 | | | 2018 | | | 2017 | | | 2018 | | | 2017 | |
| | | | | | | | | | | | | | | | | | | |
| R6 Shares: | | | | | | | | | | | | | | | | | | |
| Sales of shares | | | N/A | | | | N/A | | | | 53,831 | | | | 124,503 | | | | N/A | | | | N/A | |
| Reinvestment of distributions | | | N/A | | | | N/A | | | | 15,179 | | | | 959 | | | | N/A | | | | N/A | |
| Redemption of shares | | | N/A | | | | N/A | | | | (82,979 | ) | | | (930,673 | ) | | | N/A | | | | N/A | |
| Net decrease in R6 Shares | | | N/A | | | | N/A | | | | (13,969 | ) | | | (805,211 | ) | | | N/A | | | | N/A | |
| Investor Shares: | | | | | | | | | | | | | | | | | | | | | | | | |
| Sales of shares | | | 817,844 | | | | 557,088 | | | | — | | | | — | | | | 539,384 | | | | 1,176,006 | |
| Reinvestment of distributions | | | 140,064 | | | | 532,720 | | | | 95 | | | | — | | | | 96,557 | | | | 160,191 | |
| Redemption of shares | | | (209,332 | ) | | | (428,522 | ) | | | — | | | | (89,820 | ) | | | (467,665 | ) | | | (4,292,710 | ) |
| Net increase (decrease) in Investor Shares | | | 748,576 | | | | 661,286 | | | | 95 | | | | (89,820 | ) | | | 168,276 | | | | (2,956,513 | ) |
| Advisor Shares*: | | | | | | | | | | | | | | | | | | | | | | | | |
| Reinvestment of distributions | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | — | | | | 290 | |
| Redemption of shares | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | — | | | | (130,726 | ) |
| Net decrease in Advisor Shares | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | — | | | | (130,436 | ) |
(a) Fund commenced investment activities on January 31, 2018.
* Advisor Shares terminated on December 20, 2016.
N/A — R6 or Investor Shares currently not offered. Advisor Shares were not offered by these funds.
NOTE 13 — SUBSEQUENT EVENTS
The Funds have evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were available to be issued. Based on this evaluation, no adjustments were required to the financial statements as of April 30, 2018.
Schroder Mutual Funds
Information Regarding Review and Approval of Investment Advisory Contracts
(unaudited)
APPROVAL OF INVESTMENT ADVISORY AGREEMENT FOR THE SCHRODER CORE BOND FUND
Pursuant to Section 15 of the Investment Company Act of 1940 (the “1940 Act”), the Fund’s advisory agreement (the “Agreement”) must be approved: (i) by a vote of a majority of the shareholders of the Fund; and (ii) by the vote of a majority of the members of the Board of Trustees (the “Board” or the “Trustees”) of Schroder Series Trust (“SST”) who are not parties to the Agreement or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval.
A Board meeting was held on December 7, 2017 to decide whether to approve the Agreement for an initial two-year term. In preparation for the meeting, the Trustees requested that the Adviser furnish information necessary to evaluate the terms of the Agreement. The Trustees used this information, as well as other information that the Adviser and other service providers of the Fund presented or submitted to the Board at the meeting, to help them decide whether to approve the Agreement for an initial two-year term.
Specifically, the Board requested and received written materials from the Adviser and other service providers of the Fund regarding: (i) the nature, extent and quality of the services to be provided by the Adviser; (ii) the Adviser’s investment management personnel; (iii) the Adviser’s operations; (iv) the Adviser’s brokerage practices (including any soft dollar arrangements) and investment strategies; (v) the Fund’s proposed advisory fee to be paid to the Adviser and overall fees and operating expenses compared with a peer group of mutual funds; (vi) the Adviser’s compliance program, including a description of material compliance matters and material compliance violations; (vii) the Adviser’s policies on and compliance procedures for personal securities transactions; (viii) the Adviser’s investment experience; (ix) the Adviser’s rationale for introducing the Fund as well as the Fund’s proposed objective and strategy; and (x) the Adviser’s performance in managing similar accounts.
Representatives from the Adviser, along with other Fund service providers, presented additional information and participated in question and answer sessions at the meeting to help the Trustees evaluate the Adviser’s services, fee and other aspects of the Agreement. The Independent Trustees received advice from independent counsel and met in executive session outside the presence of Fund management and the Adviser.
At the Board meeting, the Trustees, including all of the Independent Trustees, based on their evaluation of the information provided by the Adviser and other service providers of the Fund, approved the Agreement. In considering the approval of the Agreement, the Board considered various factors that they determined were relevant, including: (i) the nature, extent and quality of the services to be provided by the Adviser; and (ii) the fees to be paid to the Adviser, as discussed in further detail below.
Nature, Extent and Quality of Services Provided by the Adviser
In considering the nature, extent and quality of the services to be provided by the Adviser, the Board reviewed the portfolio management services to be provided by the Adviser to the Fund, including the quality and continuity of the Adviser’s portfolio management personnel, the resources of the Adviser, and the Adviser’s compliance history and compliance program. The Trustees reviewed the terms of the proposed Agreement. The Trustees also reviewed the Adviser’s proposed investment and risk management approaches for the Fund. The response of the Adviser to a detailed series of questions which included, among other things, information about the investment advisory services to be provided by the Adviser to the Fund, was provided to the Board.
The Trustees also considered other services to be provided to the Fund by the Adviser such as selecting broker-dealers for executing portfolio transactions, monitoring adherence to the Fund’s investment restrictions, and monitoring compliance with various Fund policies and procedures and with applicable securities laws and regulations. Based on the factors above, as well as those discussed below, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of the services to be provided to the Fund by the Adviser would be satisfactory.
Information Regarding Review and Approval of Investment Advisory Contracts(unaudited)
Costs of Advisory Services
In considering the advisory fee payable by the Fund to the Adviser, the Trustees reviewed, among other things, a report of the proposed advisory fee to be paid to the Adviser. The Trustees also reviewed reports prepared by the Fund’s administrator comparing the Fund’s net and gross expense ratios and advisory fees to those paid by a peer group of mutual funds as classified by Lipper, an independent provider of investment company data. The Trustees reviewed pro forma fee and expense information, as well as the management fees charged by the Adviser to other clients with comparable mandates. The Trustees considered any differences in management fees and took into account the respective demands, resources and complexity associated with the Fund and other client accounts as well as the extensive regulatory, compliance and tax regimes to which the Fund is subject. The Board concluded, within the context of its full deliberations, that the advisory fee was reasonable in light of the nature and quality of the services expected to be rendered by the Adviser. The Board also considered the Adviser’s commitment to managing the Fund and its willingness to enter into an expense limitation and fee waiver arrangement with the Fund.
Investment Performance, Profitability and Economies of Scale
Because the Fund was new and had not commenced operations, it did not yet have an investment performance record and it was not possible to determine the profitability that the Adviser might achieve with respect to the Fund or the extent to which economies of scale would be realized by the Adviser as the assets of the Fund grow. Accordingly, the Trustees did not make any conclusions regarding the Fund’s investment performance, the Adviser’s profitability, or the extent to which economies of scale would be realized by the Adviser as the assets of the Fund grow, but will do so during future considerations of the Agreement.
Approval of the Agreement
Based on the Board’s deliberations and its evaluation of the information described above and other factors and information it believed relevant in the exercise of its reasonable business judgment, the Board, including all of the Independent Trustees, with the assistance of Fund counsel and Independent Trustees’ counsel, unanimously concluded that the terms of the Agreement, including the fees to be paid thereunder, were fair and reasonable and agreed to approve the Agreement for an initial term of two years. In its deliberations, the Board did not identify any absence of information as material to its decision, or any particular factor (or conclusion with respect thereto) or single piece of information that was all-important, controlling or determinative of its decision, but considered all of the factors together, and each Trustee may have attributed different weights to the various factors (and conclusions with respect thereto) and information.
Disclosure of Fund Expenses (unaudited)
We believe it is important for you to understand the impact of fees regarding your investment. All mutual funds have operating expenses. As a shareholder of a Schroder Mutual Fund, you incur ongoing costs, which include, among others, costs for portfolio management, administrative services, and shareholder reports (like this one), and in the case of Advisor Shares, distribution (12b-1) fees. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund. A fund’s expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period (November 1, 2017 to April 30, 2018).
The table below illustrates your Fund’s costs in two ways.
| • | Actual expenses. This section helps you to estimate the actual expenses after fee waivers, if applicable, that you paid over the period. The “Ending Account Value” shown is derived from the Fund’s actual return, and the fourth column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period. |
To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your Fund under the heading “Expenses Paid During Period.”
| • | Hypothetical example for comparison purposes. This section is intended to help you compare your Fund’s costs with those of other mutual funds. It assumes that the Fund had a return of 5% before expenses during the year, and that it incurred expenses at the rate of which it in the past did incur expenses. In this case, because the return used is not the Fund’s actual return, the results may not be used to estimate the actual ending balance of an account in the Fund over the period or expenses you actually paid. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses in this table based on a 5% return. You can assess your Fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds. |
Please note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect any transactional costs such as redemption fees, which are described in the Prospectus. If this fee were applied to your account, your costs would be higher.
Disclosure of
Fund Expenses
(unaudited) - (concluded)
| | | Beginning Account Value 11/1/17 | | | Ending Account Value 4/30/18 | | | Net Annualized Expense Ratios | | | Expenses Paid During Period* | |
| Schroder North American Equity Fund | | | | | | | | | | | | |
| Actual Expenses | | | | | | | | | | | | |
| Investor Shares | | $ | 1,000.00 | | | $ | 1,037.80 | | | | 0.33 | % | | $ | 1.67 | |
| Hypothetical Example for Comparison Purposes | | | | | | | | | | | | | | | | |
| Investor Shares | | $ | 1,000.00 | | | $ | 1,023.16 | | | | 0.33 | % | | $ | 1.66 | |
| Schroder Emerging Markets Small Cap Fund | | | | | | | | | | | | | | | | |
| Actual Expenses | | | | | | | | | | | | | | | | |
| R6 Shares | | $ | 1,000.00 | | | $ | 1,039.30 | | | | 1.35 | % | | $ | 6.83 | |
| Investor Shares | | | 1,000.00 | | | | 1,039.30 | | | | 1.35 | | | | 6.83 | |
| Hypothetical Example for Comparison Purposes | | | | | | | | | | | | | | | | |
| R6 Shares | | $ | 1,000.00 | | | $ | 1,018.10 | | | | 1.35 | % | | $ | 6.76 | |
| Investor Shares | | | 1,000.00 | | | | 1,018.10 | | | | 1.35 | | | | 6.76 | |
| Schroder Core Bond Fund | | | | | | | | | | | | | | | | |
| Actual Expenses | | | | | | | | | | | | | | | | |
| R6 Shares | | $ | 1,000.00 | † | | $ | 988.00 | | | | 0.32 | % | | $ | 0.78 | ** |
| Hypothetical Example for Comparison Purposes | | | | | | | | | | | | | | | | |
| R6 Shares | | $ | 1,000.00 | | | $ | 1,023.21 | | | | 0.32 | % | | $ | 1.61 | |
| Schroder Long Duration Investment-Grade Bond Fund | | | | | | | | | | | | | | | | |
| Actual Expenses | | | | | | | | | | | | | | | | |
| Investor Shares | | $ | 1,000.00 | | | $ | 966.50 | | | | 0.36 | % | | $ | 1.76 | |
| Hypothetical Example for Comparison Purposes | | | | | | | | | | | | | | | | |
| Investor Shares | | $ | 1,000.00 | | | $ | 1,022.96 | | | | 0.36 | % | | $ | 1.81 | |
| Schroder Short Duration Bond Fund | | | | | | | | | | | | | | | | |
| Actual Expenses | | | | | | | | | | | | | | | | |
| R6 Shares | | $ | 1,000.00 | | | $ | 994.20 | | | | 0.36 | % | | $ | 1.78 | |
| Investor Shares | | | 1,000.00 | | | | 993.20 | | | | 0.36 | | | | 1.78 | |
| Hypothetical Example for Comparison Purposes | | | | | | | | | | | | | | | | |
| R6 Shares | | $ | 1,000.00 | | | $ | 1,023.01 | | | | 0.36 | % | | $ | 1.81 | |
| Investor Shares | | | 1,000.00 | | | | 1,023.01 | | | | 0.36 | | | | 1.81 | |
| Schroder Total Return Fixed Income Fund | | | | | | | | | | | | | | | | |
| Actual Expenses | | | | | | | | | | | | | | | | |
| Investor Shares | | $ | 1,000.00 | | | $ | 980.00 | | | | 0.40 | % | | $ | 1.96 | |
| Hypothetical Example for Comparison Purposes | | | | | | | | | | | | | | | | |
| Investor Shares | | $ | 1,000.00 | | | $ | 1,022.81 | | | | 0.40 | % | | $ | 2.01 | |
| * | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the account period, multiplied by 181/365 (to reflect the one-half year period). |
| ** | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the account period, multiplied by 90/365 (to reflect the period). |
| † | Beginning Account Value is from inception date. |
Privacy Statement
Facts | | What does Schroders do with your personal information? |
| | | |
| Why? | | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| | | |
What? | | The types of personal information we collect and share depend on the product or service you have with us. This information can include: • Social Security number and income • account balances and account transactions • assets and investment experience When you are no longer our customer, we continue to share your information as described in this notice. |
| | |
How? | | All financial companies need to share clients’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their clients’ personal information; the reasons Schroders chooses to share; and whether you can limit this sharing. |
| | Reasons we can share your personal information | Does Schroders share? | Can you limit this sharing? |
| | For our everyday business purposes —such as to process your transactions, maintain your account(s), or respond to court orders and legal investigations | Yes | No |
| | For our marketing purposes —to offer our products and services to you | Yes | No |
| | For joint marketing with other financial companies | No | We Don’t Share |
| | For our affiliates’ everyday business purposes —information about your transactions and experiences | Yes | No |
| | For our affiliates’ everyday business purposes —information about your creditworthiness | No | We Don’t Share |
| | For nonaffiliates to market to you | No | We Don’t Share |
| Questions? | | For Schroder Mutual Funds, call DST AMS at (800) 464-3108. For other inquiries, call Institutional Client Service at (212) 641-3800 or email clientserviceny@us.schroders.com |
| | Who we are |
| | Who is providing this notice? | | Schroder Investment Management North America Inc. Schroder Mutual Funds Schroder Fund Advisors LLC |
| | What we do |
| | How does Schroders protect my personal information? | | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. Access to personal information is limited to employees who need it to perform their jobs. Our policies restrict employee use of customer information; requiring it be held in strict confidence. |
| | How does Schroders collect my personal information? | | We collect your personal information, for example, when you • open an account and provide account information • give us your contact information • show your driver’s license or government issued ID • enter into an investment advisory contract • make a wire transfer |
| | Why can’t I limit all sharing? | | Federal law gives you the right to limit only • sharing for affiliates’ everyday business purposes—information about your creditworthiness • affiliates from using your information to market to you • sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing. |
| | Definitions |
| | Affiliates | | Companies related by common ownership or control. They can be financial and nonfinancial companies. • Our affiliates include companies with the Schroder name; financial companies such as Schroder Investment Management North America Limited and Schroder Investment Management Limited; and others, such as the parent, holding company, Schroders plc. |
| | Nonaffiliates | | Companies not related by common ownership or control. They can be financial and nonfinancial companies. • Nonaffiliates we share with can include companies that help us maintain, process or service your transactions or account(s) or financial products, including companies that perform administrative, accounting, transfer agency, custodial, brokerage or proxy solicitation services, or that assist us in marketing. |
| | Joint marketing | | A formal agreement between nonaffiliated financial companies that together market financial products or services to you. • Schroders doesn’t jointly market. |
Investment Advisor | | Schroder Investment Management North America Inc. 7 Bryant Park New York, NY 10018-3706 |
| | |
Trustees | | William M. Doran Jon C. Hunt Thomas P. Lemke Randall S. Yanker Jay C. Nadel |
| | |
Distributor | | SEI Investments Distribution Co. 1 Freedom Valley Drive Oaks, Pennsylvania 19456 |
| | |
Transfer & Shareholder Servicing Agent | | DST Asset Manager Solutions, Inc. |
| | |
| Custodian | | JPMorgan Chase Bank |
| | |
| Counsel | | Morgan, Lewis & Bockius LLP |
| | |
Independent Registered Public Accounting Firm | | PricewaterhouseCoopers LLP |
| | |
| | This report is transmitted to shareholders only. It is not autho-rized for use as an offer of sale or a solicitation of an offer to buy shares of a Fund unless accompanied or preceded by that Fund’s current prospectus. Past performance results shown in this report should not be considered a representation of future per-formance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change. |
| | |
| | Schroder Series Trust Schroder Global Series Trust P.O. Box 55260 Boston, MA 02205-5260 (800) 464-3108 |
