UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________
FORM N-CSRS
________
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-21364
SCHRODER GLOBAL SERIES TRUST
(Exact name of registrant as specified in charter)
________
One Freedom Valley Drive
Oaks, PA 19456
(Address of principal executive offices) (Zip code)
Michael Beattie
C/O SEI Investments
One Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-800-464-3108
DATE OF FISCAL YEAR END: OCTOBER 31, 2017
DATE OF REPORTING PERIOD: APRIL 30, 2017
ITEM 1. REPORTS TO STOCKHOLDERS.
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SCHRODER MUTUAL FUNDS
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APRIL 30, 2017 SEMI-ANNUAL REPORT
DOMESTIC EQUITY
Schroder North American Equity Fund
GLOBAL & INTERNATIONAL EQUITY
Schroder Emerging Markets Small Cap Fund
FIXED INCOME
Schroder Short Duration Bond Fund
Schroder Total Return Fixed Income Fund
Schroder Long Duration Investment-Grade Bond Fund
SCHRODERS
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SCHRODER MUTUAL FUNDS
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TABLE OF CONTENTS
Management Discussion and Analysis .......................................... 1
Schedules of Investments
North American Equity Fund ............................................. 13
Emerging Markets Small Cap Fund ........................................ 19
Short Duration Bond Fund ............................................... 22
Total Return Fixed Income Fund ......................................... 26
Long Duration Investment-Grade Bond Fund ............................... 33
Statements of Assets and Liabilities ........................................ 36
Statements of Operations .................................................... 38
Statements of Changes in Net Assets ......................................... 40
Financial Highlights ........................................................ 44
Notes to Financial Statements ............................................... 48
Disclosure of Fund Expenses ................................................. 64
Shareholder Voting Results .................................................. 66
PROXY VOTING (UNAUDITED)
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.
FORM N-Q (UNAUDITED)
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.
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SCHRODER MUTUAL FUNDS
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IMPORTANT INFORMATION CONCERNING MANAGEMENT DISCUSSION AND ANALYSIS AND
PERFORMANCE
Except as otherwise specifically stated, all information and investment team
commentary, including portfolio security positions, is as of April 30, 2017.
The views expressed in the Management Discussion and Analysis sections (the
"MD&As") are those of the respective Fund's portfolio manager(s) and are
subject to change without notice. They do not necessarily represent the views
of Schroder Investment Management North America Inc. ("SIMNA"). The MD&As
contain some forward-looking statements providing current expectations or
forecasts of future events; they do not necessarily relate to historical or
current facts. There can be no guarantee that any forward-looking statement
will be realized. We undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events, or
otherwise. Any discussions of specific securities should not be considered a
recommendation to buy or sell those securities. A Fund may buy, sell, or hold
any security discussed herein, on the basis of factors described herein or the
basis of other factors or other considerations. Fund holdings will change.
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.
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SCHRODER NORTH AMERICAN EQUITY FUND
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MANAGEMENT DISCUSSION AND ANALYSIS (As of June 5, 2017)
PERFORMANCE
For the six-month period ended April 30, 2017, the Schroder North American
Equity Fund (the "Fund") gained 12.86% (Investor Shares), compared to the S&P
500 Index (the "Index"), a market index based on the market capitalizations of
500 large companies having common stock listed on the NYSE or NASDAQ, which
rose 13.32% during the same period.
MARKET BACKGROUND
The period was dominated by the U.S. Presidential election in November 2016 and
the unexpected victory for Donald Trump. After a brief initial shock, investors
embraced the potential for tax cuts, stimulus measures and lighter regulation
under President Trump along with a Republican-controlled Congress. The Federal
Reserve (the "Fed") increased interest rates by 0.25% in December 2016, in line
with expectations, as macroeconomic data remained supportive.
In style terms, "value" did well in late 2016 on the back of increasing
investor confidence. The OPEC oil production deal in November was positive for
investor sentiment. Together with a subsequent agreement between non-OPEC
producers to cut supply in December, this helped deliver a significant boost to
oil prices. The prices of many other commodities also continued to rise.
The positive stock market momentum generated in late 2016 was strong enough to
carry into 2017 Macroeconomic data generally continued to be supportive, with
the labor market strong and consumer confidence at high levels. As was widely
expected, the Fed raised base rates again by 0.25% in March. However, the
failure to pass revisions to healthcare legislation did raise some doubts about
the new U.S. administration's ability to implement its policies. Economic data
showed some weakness at the end of the period too, with first quarter U.S. GDP
growth coming in below market forecasts.
The first months of 2017 saw an unwinding of some of the reflation trades from
late 2016. Growth was resurgent and outperformed value. Meanwhile, oil prices
declined as inventories and production in the U.S. increased at a faster rate
than expected.
PORTFOLIO REVIEW
The Fund slightly underperformed the Index over the period. The main detractor
from relative returns was stock selection in the information technology ("IT")
and consumer discretionary sectors. Our preference for what we view as better
quality, attractively-valued names was not rewarded. Market performance was
driven by gains for a narrow group of "growth" stocks where we have an
underweight exposure as we believe them to be expensive.
Healthcare was also a negative overall for relative performance. While our
preference for the sector was positive, as it performed strongly, this was
outweighed by disappointing stock selection. Our fundamentally-based
positioning was not rewarded amid the volatility caused by speculation on
healthcare reform in the U.S.
Partially offsetting these influences, we avoided weakness in expensive stocks
in areas including consumer staples and real estate investment trusts. These
parts of the market had previously formed part of the "minimum volatility" or
"reach for yield" themes, and largely underperformed over the six-month period.
OUTLOOK
We have taken profits from a number of areas that saw strong returns at the end
of 2016. Within financials, we again trimmed some of our long-held positions in
banks and life & health insurers. We also sold some industrial stocks where we
believed the perceived pro-cyclicality of the new administration had already
been priced in. However, in both these sectors, we also topped up other
holdings that we believe had become more attractive. Within industrials, we
focused mainly on airlines, aerospace and machinery, and within financials we
found names we viewed as attractive among asset managers and consumer finance
firms. The Fund's weight in both these sectors is now broadly neutral relative
to the benchmark.
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SCHRODER NORTH AMERICAN EQUITY FUND
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Our disciplined approach to rebalancing was also in evidence in sectors that
outperformed during the first quarter. We took profits in selected healthcare
and information technology stocks as they rose, therefore becoming less
attractively valued. Telecoms as a sector was particularly weak over the first
quarter and we took the opportunity to add to some positions that we viewed as
attractively valued. The Fund's overall weight in the sector remains broadly
neutral.
The positioning of the Fund continues to reflect our goal to find the best
trade-off between valuation and business quality. Our most significant
overweight positions are in healthcare, information technology and consumer
discretionary. Within healthcare, we see the most attractive opportunities
among healthcare providers. In technology, our preferred areas remain cheap and
high quality "boring" companies with strong balance sheets and rising dividends
(e.g. Fund holdings INTEL, QUALCOMM and ORACLE). We hold a broad range of
positions across the sector, with IT services and software being the largest
industry overweights. Within consumer discretionary, our preferred areas are
retail, restaurants and consumer durables.
PERFORMANCE INFORMATION
ONE YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED
APRIL 30, 2017 APRIL 30, 2017(a) APRIL 30, 2017(a)
SCHRODER NORTH AMERICAN EQUITY FUND
Investor Shares 17.06% 12.75% 6.89%
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S&P 500 Index 17.92% 13.68% 7.15%
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(a) Average annual total returns.
"TOTAL RETURN" SHOWN ABOVE 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.
TOP 5 HOLDINGS SECTOR ALLOCATION
SECURITY % OF NET ASSETS SECTOR % OF NET ASSETS
Apple 4.1% Information Technology 24.2%
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Microsoft 3.0 Financials 14.6
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Johnson & Johnson 2.1 Healthcare 14.0
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ExxonMobil 2.0 Consumer Discretionary 13.4
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JPMorgan Chase 1.9 Industrials 10.1
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Consumer Staples 9.2
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Energy 6.4
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Telecommunication Services 2.5
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Materials 1.8
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Utilities 1.4
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Real Estate 1.0
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Other Assets less Liabilities 1.4
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SCHRODER EMERGING MARKETS SMALL CAP FUND
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MANAGEMENT DISCUSSION AND ANALYSIS (As of June 5, 2017)
PERFORMANCE
For the six-month period ended April 30, 2017, the Schroder Emerging Markets
Small Cap Fund (the "Fund") increased 9.44% (R6 Shares) and 9.46% (Investor
Shares), compared to the Morgan Stanley Capital International (MSCI) Emerging
Markets Small Cap Index (the "Index") (a broad-based basket of emerging market
stocks covering over 1,825 securities across 32 markets), which increased 8.79%.
MARKET BACKDROP
Global equities registered a positive return over the six-months ended April
2017, supported by improved global growth. Following Donald Trump's election as
U.S. President in early November, financial markets priced in a U.S. reflation
trade. This was in anticipation that the new administration's plan for U.S.
fiscal stimulus will lead to stronger U.S. growth. The Federal Reserve (the
"Fed") increased interest rates by 25 basis points in December and March.
Although the U.S. dollar rallied following the U.S. election result, it
weakened shortly thereafter as the prospect of more aggressive monetary policy
tightening diminished. Meanwhile, the European Central Bank moved to extend its
quantitative easing program to December, albeit lowering asset purchases. The
Index delivered a positive return and performed broadly in line with the MSCI
World Index.
Emerging Asian equities in general performed well, led by India. The market
rallied as GDP growth showed little adverse effect from a surprise
demonetization in November. The ruling Bharatiya Janata Party also performed
well in state elections, paving the way for political stability and future
reform implementation. Other markets benefited from an improved outlook for
global growth, particularly manufacturing-oriented markets. This included
Taiwan, which generated a strong gain as exports increased ahead of
expectations. This effect was also supportive for Korea and China, although both
markets finished behind a strong Index return. In China, macroeconomic data
remained stable, buoyed by credit stimulus. The weakness in the dollar, coupled
with the People's Bank of China's move to tighten short-term interest rates,
also helped to alleviate pressure on the capital account.
Elsewhere, Brazil generated a positive return despite lagging the Index. The
market was supported by the central bank's move to increase the pace of
interest rate cuts, lowering its headline rate by 2.5% to 12.25% . This is
expected to ease pressure on companies and consumers in particular. In South
Africa, macroeconomic data showed signs of a cyclical uptick with reduced
concerns over more aggressive tightening of global liquidity. However,
political risk weighed on stronger returns. President Zuma orchestrated an
unexpected cabinet reshuffle in March that included firing the well respected
finance minister.
Mexico finished in positive territory but was the weakest Index market.
Uncertainty over U.S. trade policy under the Trump administration was a
headwind to equities and the Mexican peso. This led the central bank to
increase interest rates by 1.75% to 6.5% to support the currency. As a result,
there is a risk that tighter monetary policy and rising inflation, in part due
to higher pass-through inflation from peso weakness, could weigh on growth. In
April, President Trump agreed to renegotiate the North American Free Trade
Agreement instead of withdrawing from it, but uncertainty remains.
PORTFOLIO REVIEW
The Fund outperformed the Index over the reporting period. Positive stock
selection in China was the biggest factor to relative returns. This included
positions in CHINA LODGING GROUP, a hotel manager, and in ASM PACIFIC
TECHNOLOGY, which supplies assembly equipment and materials to the
semiconductor and electronic assembly sectors. The holdings in injection
moulding machine manufacturer, HAITIAN INTERNATIONAL HOLDINGS and NEXTEER
AUTOMOTIVE GROUP, which produces advanced car steering systems also contributed
positively. A position in UAE based logistics company ARAMEX added significant
value. The position in Russian rail freight operator GLOBALTRANS INVESTMENT was
another key contributor. By contrast, stock selection in Taiwan detracted, most
notably holdings in POSIFLEX TECHNOLOGY, a point of sale terminal manufacturer,
and in AEROSPACE INDUSTRIAL DEVELOPMENT.
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SCHRODER EMERGING MARKETS SMALL CAP FUND
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OUTLOOK
In our view, the strategic case for investments in emerging market smaller
companies continues to be compelling, in large part due to their rich
opportunity set and their generally under researched nature relative to larger
capitalization companies. This outlook is supported by an improving economic
and earnings profile. We view valuations as reasonably attractive and we
continue to find investment opportunities in well managed smaller companies
given the breadth of the universe.
PERFORMANCE INFORMATION
ONE YEAR ENDED ANNUALIZED
APRIL 30, 2017 SINCE INCEPTION (a)
SCHRODER EMERGING MARKETS SMALL CAP FUND
R6 Shares 22.88% 18.02%
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Investor Shares 22.92% 17.98%
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MSCI Emerging Markets Small Cap Index 14.08% 14.09%
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(a) From commencement of fund operations on August 26, 2015.
"TOTAL RETURN" SHOWN ABOVE 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.
TOP 5 HOLDINGS GEOGRAPHIC ALLOCATION
SECURITY % OF NET ASSETS % OF NET ASSETS
Aramex PJSC 2.5% Asia/Far East 67.5%
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Arvind 2.4 Latin America 15.4
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Bumrungrad Hospital 2.3 Europe 12.1
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Medy-Tox 2.3 Middle East 4.5
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CTCI 2.0 Africa 1.4
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Liabilities in excess of Other Assets (0.9)
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SCHRODER SHORT DURATION BOND FUND
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MANAGEMENT DISCUSSION AND ANALYSIS (As of June 5, 2017)
PERFORMANCE
For the six-month period ended April 30, 2017, the Schroder Short Duration Bond
Fund (the "Fund") gained 0.09% (R6 Shares) and 0.09% (Investor Shares),
compared to the BofA Merrill Lynch 1-3 Year Treasury Index (the "Index"), a
widely used short-term bond proxy, which gained 0.03% during the same period.
MARKET BACKDROP
A positive global growth backdrop combined with an expectation of a favorable
U.S. policy agenda continued to drive risk assets and sentiment higher in the
early part of 2017. However, investors took pause when the bill to repeal and
replace the Affordable Care Act was pulled from the House floor in March. The
failure to execute on the first major initiative called into question President
Trump's ability to deliver on his wide range of pro-growth economic promises.
Other policy items remain on the docket in the near future; such as tax reform,
reduced financial regulation and fiscal stimulus, all of which should be
supportive for the reflation theme that remains prevalent in financial
markets.
The U.S. Federal Reserve (the "Fed") took another step towards the
normalization of interest rates by raising its target range for the federal
funds rate by 25 basis points to 0.75% to 1%. This was only the third rate hike
since December 2015, but the second in three months. The move had been fully
anticipated by markets following strong signals from Fed speakers in the weeks
prior to the announcement. The muted market reaction suggests that fixed income
investors were comfortable with the rate hike, which may provide the Fed with a
further window to act. After two years of one hike each, the Fed's members
appear to be testing market sentiment on how to further extricate themselves
from an exceptionally accommodative monetary policy.
PORTFOLIO REVIEW
The Fund modestly beat the Index for the six-month period. Sector selection was
the main factor with a positive impact as being overweight financials and
industrials had a material impact. Overweight to asset backed securities and
tax-exempt municipals were also positive contributors. Issue selection was not
a factor against the all-Treasury benchmark. Duration also was not a material
factor.
OUTLOOK
In our view, the themes that defined the conclusion of 2016 will likely
continue to shape fixed income markets for the rest of 2017. A rise in global
populism, exemplified by the historic Brexit vote as well as the U.S.
presidential election, marks a fundamental shift in the investment backdrop for
fixed income. Markets are transitioning away from an environment of excessive
central bank stimulus, subdued inflation and austerity towards one of reflation
and more expansive fiscal policy. In the U.S., the Fed is expected to continue
tightening monetary policy with one or two more rate hikes priced in for the
remainder of the year while central bank policy in Europe and Asia is less
clear. With four major elections taking place in the Eurozone, we believe that
the political shocks -- and associated volatility -- that have occurred in the
U.S. and UK are likely to continue. While the U.S. was the center of the
interest rate re-pricing in 2016, European sovereign yields could lead the move
higher in 2017.
The implications of a transition to fiscal policy for the various sectors loom
large. While record low interest rates overseas have driven foreign investors
into higher-yielding U.S. credit, any material change in interest rates abroad
could have a meaningful impact on already-ordinary U.S. credit valuations. Our
sector preference remains in financials, which we believe will benefit from
less regulatory burdens and higher interest rates. Within the securitized
sector, we continue to have no exposure to agency mortgages as valuations
appear ordinary, prepayments remain challenging and the technical overhang of
the Fed's balance sheet still weighs heavily on the sector.
Although the growth outlook is likely to improve modestly over the course of
2017, the valuation backdrop in many sectors is far less compelling than it was
twelve months ago. This is reflected in the reduced level of overall risk
across in the Fund. We believe that the Fund has significant "dry powder" to
take advantage of increased volatility next year, which may result as central
banks pass the baton from monetary to fiscal
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SCHRODER SHORT DURATION BOND FUND
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policy. Treasury yields are likely to rise modestly in the U.S., but the
environment of subdued overall yields means demand for spread sectors should
still remain relevant. Patience and discipline are the watch words for the
immediate future.
PERFORMANCE INFORMATION
ONE YEAR ENDED ANNUALIZED
APRIL 30, 2017 SINCE INCEPTION(a)
SCHRODER SHORT DURATION BOND FUND
R6 Shares 0.97% 1.37%
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Investor Shares 0.95% 1.29%
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BofA Merrill Lynch 1-3 Year Treasury Bond Index 0.35% 0.62%
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(a) From commencement of fund operations on August 26, 2015.
"TOTAL RETURN" SHOWN ABOVE 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.
TOP 5 HOLDINGS SECTOR ALLOCATION
SECURITY % OF NET ASSETS SECTOR % OF NET ASSETS
United States Treasury Note 1.125%, Corporate Obligations 74.5%
02/28/19 12.4% --------------------------------------------------------
------------------------------------------------------ U.S. Treasury Obligations 14.8
Morgan Stanley 1.842%, 02/14/20 2.5 --------------------------------------------------------
------------------------------------------------------ Asset-Backed Securities 4.3
Verizon Communications 2.946%, --------------------------------------------------------
03/15/22 2.5 Municipal Bonds 3.6
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Standard Chartered 2.400%, 09/08/19 2.5 Other Assets less Liabilities 2.8
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Reynolds American 2.300%, 06/12/18 2.5
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SCHRODER TOTAL RETURN FIXED INCOME FUND
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MANAGEMENT DISCUSSION AND ANALYSIS (As of June 5, 2017)
PERFORMANCE
For the six-month period ended April 30, 2017, the Schroder Total Return Fixed
Income Fund (the "Fund") gained 0.09% (Investor Shares), compared to the
Bloomberg Barclays U.S Aggregate Bond Index (the "Index"), a broad-based basket
of debt securities, which returned -0.67% during the same period.
MARKET BACKGROUND
The significant move in interest rates during the fourth quarter of 2016
completed an extraordinary rebound from the lows of July, resulting in U.S.
Treasury yields ending the year higher than where they began. The 10-year U.S.
Treasury yield started 2016 at 2.27% and collapsed to 1.36% in July, the lowest
level in recent history, before ending the year at 2.44% . The latter half of
2016 was dominated by a rise in global populism. This was exemplified by the
historic Brexit vote, the U.S. presidential election and the Italian referendum
vote of 'No". The market reaction to the U.S. election was immediate and, in our
view, justified in that it supports our thesis of passing the baton from
monetary to fiscal policy. Markets began to transition away from an environment
of excessive central bank stimulus, subdued inflation and austerity towards one
of reflation and more expansive fiscal policy. As a result, the U.S. was at the
center of the interest rate repricing in 2016 with an 85 basis point move higher
in 10-year U.S. Treasury yields in the final quarter of the year.
In terms of Federal Reserve (the "Fed") policy moves during the period, the Fed
took another step towards the normalization of interest rates by raising its
target range for the federal funds rate by 25 basis points, to 0.50% -0.75%, at
its December meeting, and again to 0.75% to 1% at its March meeting. The March
hike was only the third rate hike since December 2015, but the second in three
months. Both moves had been fully anticipated by markets following strong
signals from Fed speakers in the weeks prior to the announcements. After two
years of one hike each, the Fed's members appear to be testing market sentiment
on how to further extricate themselves from an exceptionally accommodative
monetary policy. Regarding its $4.5 trillion balance sheet, the minutes from
the March meeting reported that "participants agreed that reductions in the
Fed's securities holdings should be gradual and predictable, and accomplished
primarily by phasing out reinvestments of principal received from those
holdings." The details surrounding when and how the Fed will reduce its balance
sheet will be critical to the future path of interest rates.
A positive global growth backdrop combined with an expectation of a favorable
U.S. policy agenda continued to drive risk assets and sentiment higher in the
early part of the first quarter of 2017. Although investors took pause when the
bill to repeal and replace the Affordable Care Act was pulled from the House
floor in March, which called into question President Trump's ability to deliver
on his wide range of pro-growth economic promises, growth throughout the period
was strong. In the first quarter U.S. GDP grew at a respectable 2.1%, while
personal consumption expenditure ("PCE"), the Fed's preferred inflation
measure, rose to 2.1% in February. Furthermore, job growth remained robust as
nonfarm payrolls increased by 235,000 in March, ahead of consensus estimate of
200,000, and the U.S. consumer confidence index reached a 16-year high for
March. In addition to this strong data, other policy items on the docket in the
near future, such as tax reform, reduced regulation and fiscal stimulus, should
be supportive of the reflation theme that remains prevalent in financial
markets.
Global bond markets reflected a continued healthy level of risk appetite in
April, albeit after some initial jitters. The outperformance of the riskier
elements of the bond market was the result of continued economic strength and
particularly encouraging political developments in France. Early in the month,
perceived geopolitical tensions initially weighed on sentiment, resulting in a
flight to quality. Markets responded positively to the victory for Emmanuel
Macron in the first round of the French presidential election, which proved to
be the catalyst for the risk-led rebound.
PORTFOLIO REVIEW
The Fund outperformed the Index for the six-month period ended April 30, 2017.
The overweight to, and security selection within, investment-grade corporates
was a primary contributor to returns despite heavy supply coming to the market,
especially in the first quarter of 2017. Both financials and industrials were
contributors, as financials (especially longer-dated banks) continued to
benefit from liability-driven investment
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SCHRODER TOTAL RETURN FIXED INCOME FUND
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demand and industrials spreads tightened despite volatility in the price of
oil. As a result of credit curves flattening over the first part of 2017 we
took the opportunity to reduce longer-dated financials and rotate into
AAA-rated Collateralized Loan Obligations ("CLOs") and agency mortgage-backed
securities ("MBS"), which we believe benefit from attractive spread levels
given strong credit protection and elevated demand for short duration, high
carry assets. Within the securitized sector the overweight to asset-backed
securities ("ABS") was a contributor to returns, while security selection
within commercial, MBS detracted over the period. Exposure to emerging market
debt and modest exposure to local currency assets was also a contributor as
U.S. dollar weakness in Q1 2017 resulted in strong demand for the sector.
Interest rate strategies were also a primary contributor over the period. The
Fund's 5% allocation to Treasury inflation-protected securities contributed to
performance as inflation-linked bonds outperformed nominals on expectations of
higher inflation under a Trump presidency, although this trade gave back some
performance in the latter half of the period as the market began to question
the ability of the administration to implement future pro-growth policies.
Additionally, we tactically sold federal funds futures in late February as we
believed that the market was underpricing the probability of a March rate hike.
This trade performed well and we covered this position in the first couple of
days of March as the probabilities of a rate hike increased from 30% to 80% by
the end of February. The performance of the Fund's short European government
bond positions versus U.S. Treasuries was mixed as this trade detracted in late
2016 but was a contributor in early 2017 as European yields were higher on the
back of political uncertainty and stronger economic data. We continue to
believe the trade offers value as, along with the low correlation of the trade
to other active strategies in the Fund, the European Central Bank is likely to
reassess the scale of their bond buying program in the coming months and we
expect political risk is likely to remain elevated in Europe next year, which
may weigh on European bond valuations.
OUTLOOK
The themes that defined the conclusion of 2016 will likely continue to shape
fixed income markets in 2017. A rise in global populism, exemplified by the
historic Brexit vote as well as the U.S. presidential election, marks a
fundamental shift in the investment backdrop for fixed income. Markets are
transitioning away from an environment of excessive central bank stimulus,
subdued inflation and austerity towards one of reflation and more expansive
fiscal policy. We believe that the political shocks -- and associated
volatility --that have occurred in the U.S. and UK are likely to continue.
While the U.S. was the center of the interest rate repricing in 2016, European
sovereign yields could lead the move higher in 2017.
The implications of a transition to fiscal policy for the various sectors loom
large. While record low interest rates overseas have driven foreign investors
into higher-yielding U.S. credit, any material change in interest rates abroad
could have a meaningful impact on already-ordinary U.S. credit valuations.
Within corporate spread sectors, our view remains constructive although more
measured than in recent quarters. Our sector preference remains in financials,
which we believe will benefit from less regulatory burdens and higher interest
rates. The technical and fundamental dynamic also appear positive within the
high yield market and we maintain a small allocation. However, after nearly 15%
returns last year generally for this sector, we prefer to wait for better
opportunities before committing more capital to the sector. Within the
securitized sector, we continue to take a defensive posture regarding agency
mortgages as valuations appear ordinary, prepayments remain challenging and the
technical overhang of the Fed's balance still hangs heavy on the sector. We
continue to see more opportunity in certain ABS and CMBS sectors.
We remain selectively positive on emerging markets. While the knee-jerk
reaction from a Trump victory has been negative for emerging markets with
higher Treasury yields, U.S. dollar strength and potential trade policy acting
as a headwind, recent weakness may create a buying opportunity. Many emerging
market economies reached an inflection point economically and politically
earlier this year, making country differentiation paramount.
Going forward we expect markets to be characterized by a broader reflationary
theme and increasing volatility as central banks step away from the markets.
Although the growth outlook is likely to improve modestly over the course of
2017, we believe that the valuation backdrop in many sectors is far less
compelling than it was twelve months ago. This is reflected in the reduced
level of overall risk in the portfolio. We
--------------------------------------------------------------------------------
9
--------------------------------------------------------------------------------
SCHRODER TOTAL RETURN FIXED INCOME FUND
--------------------------------------------------------------------------------
believe that the portfolio has significant "dry powder" to take advantage of
increased volatility next year, which may result as central banks pass the
baton from monetary to fiscal policy. Treasury yields are likely to rise
modestly in the U.S., but the environment of subdued overall yields means
demand for spread sectors should remain relevant. Our strongest conviction
remains with regard to inflation linked securities and distortions in European
bond markets, which we believe will provide significant opportunity throughout
the year.
PERFORMANCE INFORMATION
ONE YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED
APRIL 30, 2017 APRIL 30, 2017(a) APRIL 30, 2017(a)
SCHRODER TOTAL RETURN FIXED INCOME FUND
Investor Shares 2.08% 2.44% 4.72%
------------------------------------------------------------------------------------------------------------
Bloomberg Barclays U.S. Aggregate Bond Index 0.83% 2.27% 4.30%
------------------------------------------------------------------------------------------------------------
(a) Average annual total return.
"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.
TOP 5 HOLDINGS SECTOR ALLOCATION
SECURITY % OF NET ASSETS SECTOR % OF NET ASSETS
FNMA 4.000%, 03/01/47 3.4% Corporate Obligations 48.7%
-------------------------------------------------------- --------------------------------------------------------
FHLMC 4.000%, 03/01/47 3.4 U.S. Treasury Obligations 16.3
-------------------------------------------------------- --------------------------------------------------------
United States Treasury Inflation Indexed Asset-Backed Securities 10.7
Bond 0.125%, 07/15/26 2.0 --------------------------------------------------------
-------------------------------------------------------- U.S. Government Mortgage-Backed
Hurricane Catastrophe Fund Finance, Obligations 9.9
Ser A 2.995%, 07/01/20 1.8 --------------------------------------------------------
-------------------------------------------------------- Municipal Bonds 4.0
United States Treasury Note 2.000%, --------------------------------------------------------
11/15/26 1.8 Sovereign Governments 3.4
-------------------------------------------------------- --------------------------------------------------------
Collateralized Mortgage Obligations 1.2
--------------------------------------------------------
Commercial Mortgage-Backed
Obligation 0.3
--------------------------------------------------------
Other Assets less Liabilities 5.5
--------------------------------------------------------
--------------------------------------------------------------------------------
10
--------------------------------------------------------------------------------
SCHRODER LONG DURATION INVESTMENT-GRADE BOND FUND
--------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (As of June 5, 2017)
PERFORMANCE
For the six-month period ended April 30, 2017, the Schroder Long Duration
Investment-Grade Bond Fund (the "Fund") returned -2.49% (Investor Shares),
compared to the Bloomberg Barclays Long Government/ Credit Bond Index (the
"Index"), a broad-based basket of debt securities, which returned -2.16% during
the same period.
MARKET BACKGROUND
A positive global growth backdrop combined with an expectation of a favorable
U.S. policy agenda continued to drive risk assets and sentiment higher in the
early part of 2017. However, investors took pause when the bill to repeal and
replace the Affordable Care Act was pulled from the House floor in March. The
failure to execute on the first major initiative called into question President
Trump's ability to deliver on his wide range of pro-growth economic promises.
Other policy items remain on the docket in the near future, such as tax reform,
reduced financial regulation and fiscal stimulus, all of which should be
supportive for the reflation theme that remains prevalent in financial
markets.
The U.S. Federal Reserve (the "Fed") took another step towards the
normalization of interest rates by raising its target range for the federal
funds rate by 25 basis points to 0.75% to 1%. This was only the third rate hike
since December 2015, but the second in three months. The move had been fully
anticipated by markets following strong signals from Fed speakers in the weeks
prior to the announcement. The muted market reaction suggests that fixed income
investors were comfortable with the rate hike, which may provide the Fed with a
further window to act. After two years of one hike each, the Fed's members
appear to be testing market sentiment on how to further extricate themselves
from an exceptionally accommodative monetary policy.
PORTFOLIO REVIEW
The Fund underperformed the Index for the six-month period. Sector selection
was the main factor with a negative impact as being underweight industrials and
overweight Treasuries detracted from excess returns. Overweight financials had
a large positive impact, but not enough to offset the underperformance from
Treasuries and industrials. Issue selection was positive, mostly due to select
industrials beating the broader credit indices. Yield curve and duration were
not material factors.
OUTLOOK
In our view, the themes that defined the conclusion of 2016 will likely
continue to shape fixed income markets for the rest of 2017. A rise in global
populism, exemplified by the historic Brexit vote as well as the U.S.
presidential election, marks a fundamental shift in the investment backdrop for
fixed income. Markets are transitioning away from an environment of excessive
central bank stimulus, subdued inflation and austerity towards one of reflation
and more expansive fiscal policy. In the U.S., the Fed is expected to continue
tightening monetary policy with one or two more rate hikes priced in for the
remainder of the year while central bank policy in Europe and Asia is less
clear. With four major elections taking place in the Eurozone, we believe that
the political shocks -- and associated volatility -- that have occurred in the
U.S. and UK are likely to continue. While the U.S. was the center of the
interest rate re-pricing in 2016, European sovereign yields could lead the move
higher in 2017.
The implications of a transition to fiscal policy for the various sectors loom
large. While record low interest rates overseas have driven foreign investors
into higher-yielding U.S. credit, any material change in interest rates abroad
could have a meaningful impact on already-ordinary U.S. credit valuations. Our
sector preference remains in financials, which we believe will benefit from
less regulatory burdens and higher interest rates. Within the securitized
sector, we continue to have no exposure to agency mortgages as valuations
appear ordinary, prepayments remain challenging and the technical overhang of
the Fed's balance sheet still weighs heavily on the sector.
--------------------------------------------------------------------------------
11
--------------------------------------------------------------------------------
SCHRODER LONG DURATION INVESTMENT-GRADE BOND FUND
--------------------------------------------------------------------------------
Although the growth outlook is likely to improve modestly over the course of
2017, the valuation backdrop in many sectors is far less compelling than it was
twelve months ago. This is reflected in the reduced level of overall risk
across in the Fund. We believe that the Fund has significant "dry powder" to
take advantage of increased volatility next year, which may result as central
banks pass the baton from monetary to fiscal policy. Treasury yields are likely
to rise modestly in the U.S., but the environment of subdued overall yields
means demand for spread sectors should still remain relevant. Patience and
discipline are the watch words for the immediate future.
PERFORMANCE INFORMATION
ONE YEAR ENDED FIVE YEARS ENDED ANNUALIZED
APRIL 30, 2017 APRIL 30, 2017(a) SINCE INCEPTION(b)
SCHRODER LONG DURATION INVESTMENT-GRADE BOND FUND
Investor Shares 1.09% 5.61% 6.33%
-----------------------------------------------------------------------------------------------------------------------
Bloomberg Barclays U.S. Long Government/Credit Bond Index 1.31% 4.50% 4.35%
-----------------------------------------------------------------------------------------------------------------------
(a) Average annual total returns.
(b) From commencement of fund operations on October 3, 2011.
"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.
TOP 5 HOLDINGS SECTOR ALLOCATION
SECURITY % OF NET ASSETS SECTOR % OF NET ASSETS
United States Treasury Bond Corporate Obligations 53.9%
4.375%, 05/15/40 16.8% --------------------------------------------------------
------------------------------------------------------ U.S. Treasury Obligations 43.8
United States Treasury Bond --------------------------------------------------------
4.625%, 02/15/40 7.6 Taxable Municipal Bond 0.5
------------------------------------------------------ --------------------------------------------------------
United States Treasury Bond Other Assets less Liabilities 1.8
2.500%, 05/15/46 6.0 --------------------------------------------------------
------------------------------------------------------
United States Treasury Bond
2.250%, 02/15/27 5.8
------------------------------------------------------
United States Treasury Bond
4.500%, 02/15/36 2.8
------------------------------------------------------
--------------------------------------------------------------------------------
12
--------------------------------------------------------------------------------
SCHRODER NORTH AMERICAN EQUITY FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2017 (UNAUDITED)
SHARES VALUE $
---------- ----------
COMMON STOCK -- 98.6%
BERMUDA -- 1.0%
89,700 Assured Guaranty 3,420,261
10,775 Everest Re Group 2,712,175
3,220 RenaissanceRe Holdings 457,788
52,200 Validus Holdings 2,885,616
----------
9,475,840
CANADA -- 1.5%
391,300 Athabasca Oil (1) 395,586
108,500 Baytex Energy Trust (1) 328,270
16,500 BCE 751,236
154,200 Birchcliff Energy 791,870
102,800 Bonavista Energy 216,136
11,700 Capital Power 213,249
39,700 Centerra Gold 205,036
53,100 CGI Group Class A (1) 2,562,711
34,400 CI Financial 672,854
87,300 Crescent Point Energy 864,015
134,800 Crew Energy (1) 405,866
6,956 Dominion Diamond 84,539
118,800 Eldorado Gold 434,279
40,000 Enbridge Income Fund Holdings 981,649
23,300 Genworth MI Canada 578,638
24,300 Goldcorp 338,585
24,100 Husky Energy (1) 278,243
33,300 IAMGOLD (1) 137,586
16,500 Magna International Class A 689,228
125,200 MEG Energy (1) 566,819
24,700 Nevsun Resources 54,827
26,500 Open Text 918,827
296,000 Spartan Energy (1) 494,399
145,400 Surge Energy 270,551
17,700 Teck Resources Class B 367,213
26,900 Tourmaline Oil (1) 528,521
95,100 Yamana Gold 255,681
----------
14,386,414
ISRAEL -- 0.2%
21,100 Check Point Software Technologies (1) 2,194,611
----------
UNITED KINGDOM -- 0.1%
81,300 Noble 390,240
50,700 Rowan Class A (1) 713,349
----------
1,103,589
SHARES VALUE $
------- ----------
UNITED STATES -- 95.8%
CONSUMER DISCRETIONARY -- 13.3%
14,106 Amazon.com (1) 13,047,909
40,300 American Eagle Outfitters 567,827
51,100 Bed Bath & Beyond 1,980,125
29,200 Best Buy 1,512,852
18,200 Big 5 Sporting Goods 280,280
12,300 Brinker International 543,537
57,500 Buckle 1,075,250
9,400 Carter's 865,176
14,100 Cato Class A 318,096
4,100 Charter Communications Class A (1) 1,415,156
4,600 Cheesecake Factory 295,136
25,400 Coach 1,000,506
130,300 Comcast Class A 5,106,457
3,200 Cooper-Standard Holdings (1) 361,824
3,600 Cracker Barrel Old Country Store 576,684
41,500 Darden Restaurants 3,535,385
43,100 Delphi Automotive 3,465,240
17,100 Foot Locker 1,322,514
28,800 Ford Motor 330,336
26,200 Fossil Group (1) 451,950
26,100 GameStop Class A 592,209
73,100 Gannett 611,116
59,400 Gap 1,556,280
47,000 Garmin 2,389,480
162,600 Gentex 3,357,690
19,399 Genuine Parts 1,785,096
28,800 Hillenbrand 1,062,720
51,093 Home Depot 7,975,617
18,700 John Wiley & Sons Class A 985,490
25,200 Kohl's 983,556
45,600 L Brands 2,408,136
8,900 Lear 1,269,674
29,783 Leggett & Platt 1,564,799
30,900 Lowe's 2,622,792
41,581 McDonald's 5,818,429
40,000 Meredith 2,342,000
21,300 Michael Kors Holdings (1) 795,129
7,800 Netflix (1) 1,187,160
14,400 New Media Investment Group 189,504
29,100 Nike Class B 1,612,431
57,400 Omnicom Group 4,713,688
16,800 PetMed Express 388,080
8,600 Polaris Industries 733,236
2,288 Priceline Group (1) 4,225,524
8,600 Ralph Lauren Class A 694,192
21,800 Ross Stores 1,417,000
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 13
--------------------------------------------------------------------------------
SCHRODER NORTH AMERICAN EQUITY FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
SHARES VALUE $
------- -----------
58,200 Scripps Networks Interactive Class A 4,348,704
5,700 Sherwin-Williams 1,907,676
53,800 Staples 525,626
61,700 Starbucks 3,705,702
14,400 Steven Madden (1) 547,920
39,000 Target 2,178,150
4,600 Tenneco 289,938
7,652 Thor Industries 735,969
39,600 TJX 3,114,144
24,100 Tupperware Brands 1,730,621
46,100 Urban Outfitters (1) 1,054,768
29,500 VF 1,611,585
38,000 Viacom Class B 1,617,280
14,600 Vitamin Shoppe (1) 281,780
67,272 Walt Disney 7,776,643
35,200 Williams-Sonoma 1,902,560
12,900 Yum China Holdings (1) 440,148
12,900 Yum! Brands 848,175
-----------
125,950,657
CONSUMER STAPLES -- 9.2%
100,100 Altria Group 7,185,178
16,100 Archer-Daniels-Midland 736,575
55,700 Campbell Soup 3,204,978
208,116 Coca-Cola 8,980,205
35,782 Colgate-Palmolive 2,577,735
2,973 Costco Wholesale 527,767
18,317 CVS Health 1,510,054
23,300 Dr. Pepper Snapple Group 2,135,445
84,300 General Mills 4,848,093
23,400 Ingredion 2,897,388
7,860 JM Smucker 996,019
13,300 Kellogg 944,300
33,606 Kimberly-Clark 4,360,379
6,491 Medifast 300,663
14,700 Monster Beverage (1) 667,086
55,000 Nu Skin Enterprises Class A 3,037,650
71,224 PepsiCo 8,068,255
79,291 Philip Morris International 8,788,615
132,711 Procter & Gamble 11,589,652
16,200 Universal 1,189,890
21,200 USANA Health Sciences (1) 1,205,220
54,941 Walgreens Boots Alliance 4,754,594
84,023 Wal-Mart Stores 6,316,849
-----------
86,822,590
ENERGY -- 5.7%
21,800 Antero Resources (1) 461,942
54,300 Approach Resources (1) 112,401
65,000 Atwood Oceanics (1) 508,950
86,300 Bill Barrett (1) 331,392
SHARES VALUE $
------- ----------
18,200 Bristow Group 243,334
25,200 CARBO Ceramics (1) 173,124
93,963 Chevron 10,025,852
34,700 ConocoPhillips 1,662,477
24,300 Diamond Offshore Drilling (1) 350,406
52,300 Ensco Class A 412,647
5,700 EOG Resources 527,250
229,290 ExxonMobil 18,721,528
84,600 Gulfport Energy (1) 1,343,448
5,600 Halliburton 256,928
18,200 Hess 888,706
42,700 Hornbeck Offshore Services (1) 145,607
9,400 International Seaways (1) 181,702
23,800 Kinder Morgan 490,994
200,000 Marathon Oil 2,974,000
37,500 Marathon Petroleum 1,910,250
19,600 Murphy Oil 513,128
3,000 National Oilwell Varco 104,910
41,533 Occidental Petroleum 2,555,941
7,679 Phillips 66 610,941
49,572 Schlumberger 3,598,432
36,000 Transocean (1) 397,080
54,700 Valero Energy 3,534,167
75,600 Whiting Petroleum (1) 627,480
----------
53,665,017
FINANCIALS -- 13.4%
1,200 Affiliated Managers Group 198,708
62,500 Aflac 4,680,000
77,200 Ally Financial 1,528,560
20,000 American Equity Investment Life Holding 474,400
51,627 American Express 4,091,440
3,000 American Financial Group 291,930
25,300 American International Group 1,541,023
1,400 American National Insurance 163,688
25,300 Artisan Partners Asset Management
Class A 741,290
408,150 Bank of America 9,526,221
7,500 BB&T 323,850
70,200 Berkshire Hathaway Class B (1) 11,597,742
47,300 Capital One Financial 3,801,974
11,100 Chubb 1,523,475
186,742 Citigroup 11,040,187
8,800 CNA Financial 398,288
2,500 Credit Acceptance (1) 508,125
54,518 Discover Financial Services 3,412,282
14,300 Eaton Vance 613,899
4,900 Equifax 663,019
9,900 Evercore Partners Class A 730,125
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 14
--------------------------------------------------------------------------------
SCHRODER NORTH AMERICAN EQUITY FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
SHARES VALUE $
------- -----------
3,900 FactSet Research Systems 636,714
8,944 FBL Financial Group Class A 594,776
27,600 Federated Investors Class B 740,232
34,600 Fifth Third Bancorp 845,278
18,800 First American Financial 816,108
36,900 Franklin Resources 1,590,759
25,404 Goldman Sachs Group 5,685,415
22,400 Greenhill 566,720
8,300 HCI Group 395,827
7,800 Jack Henry & Associates 755,976
210,663 JPMorgan Chase 18,327,681
10,300 KeyCorp 187,872
18,800 Lincoln National 1,239,484
28,200 MBIA (1) 236,880
30,100 MetLife 1,559,481
147,700 Morgan Stanley 6,405,749
1,200 National Western Life Group Class A 367,488
19,100 OFG Bancorp 223,470
31,900 Paychex 1,891,032
44,900 Principal Financial Group 2,924,337
4,100 Prosperity Bancshares 275,520
8,500 Public Storage REIT 1,779,730
11,900 Regions Financial 163,625
75,400 Synchrony Financial 2,096,120
31,300 T. Rowe Price Group 2,218,857
20,500 TD Ameritrade Holding 784,535
13,151 U.S. Bancorp 674,383
27,203 Universal Insurance Holdings 708,638
25,200 Voya Financial 941,976
93,500 Waddell & Reed Financial Class A 1,682,065
210,072 Wells Fargo 11,310,277
-----------
126,477,231
HEALTHCARE -- 14.0%
16,600 Abbott Laboratories 724,424
118,581 AbbVie 7,819,231
22,916 Aetna 3,095,264
1,900 Allergan 463,334
61,217 Amgen 9,997,961
7,100 Anthem 1,263,019
6,762 Biogen (1) 1,833,922
3,381 Bioverativ (1) 198,837
37,671 Bristol-Myers Squibb 2,111,460
5,200 Cardinal Health 377,468
22,000 Celgene (1) 2,729,100
1,613 Centene (1) 120,007
27,500 Cerner (1) 1,780,625
4,500 Chemed 906,210
13,200 Edwards Lifesciences (1) 1,447,644
17,861 Eli Lilly 1,465,674
SHARES VALUE $
------- -----------
88,024 Express Scripts Holding (1) 5,399,392
104,104 Gilead Sciences 7,136,329
2,700 Idexx Laboratories (1) 452,871
159,184 Johnson & Johnson 19,654,448
10,302 Laboratory Corp. of America Holdings (1) 1,443,825
26,900 McKesson 3,720,001
41,700 MEDNAX (1) 2,517,012
81,569 Medtronic 6,777,568
192,607 Merck 12,005,194
12,500 Molina Healthcare (1) 622,375
37,500 Myriad Genetics (1) 689,625
396,547 Pfizer 13,450,874
21,639 Quest Diagnostics 2,283,131
14,900 ResMed 1,013,051
10,568 Stryker 1,441,158
13,300 Taro Pharmaceutical Industries (1) 1,554,105
2,600 Thermo Fisher Scientific 429,858
27,900 United Therapeutics (1) 3,507,030
52,500 UnitedHealth Group 9,181,200
9,508 Waters (1) 1,615,314
23,100 Zoetis Class A 1,296,141
-----------
132,524,682
INDUSTRIALS -- 10.1%
24,335 3M 4,765,523
49,000 Alaska Air Group 4,169,410
5,200 AMETEK 297,440
23,100 Applied Materials 938,091
38,300 Boeing 7,078,989
19,700 BorgWarner 832,916
6,800 Carlisle 689,452
9,400 CH Robinson Worldwide 683,380
35,600 CSX 1,809,904
36,700 Cummins 5,539,498
30,900 Danaher 2,574,897
53,000 Delta Air Lines 2,408,320
32,800 Deluxe 2,358,648
2,300 Dover 181,424
20,094 Dun & Bradstreet 2,202,503
46,400 Eaton 3,509,696
5,700 EnerSys 473,727
23,400 Expeditors International of Washington 1,312,506
15,450 Fortive 977,367
5,600 General Dynamics 1,085,224
287,689 General Electric 8,340,104
24,100 Greenbrier 1,047,145
5,375 HEICO 382,001
39,391 Honeywell International 5,165,736
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 15
--------------------------------------------------------------------------------
SCHRODER NORTH AMERICAN EQUITY FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
SHARES VALUE $
------- ----------
19,600 Huntington Ingalls Industries 3,937,444
5,100 IDEX 534,276
8,800 Illinois Tool Works 1,215,192
10,800 JetBlue Airways (1) 235,764
25,100 Kla-Tencor 2,465,322
35,700 Knoll 855,372
14,800 Lockheed Martin 3,987,860
6,000 ManpowerGroup 605,880
2,500 Middleby (1) 340,325
6,600 Northrop Grumman 1,623,336
11,900 Parker Hannifin 1,913,520
54,000 Pitney Bowes 717,660
6,400 Raytheon 993,344
27,400 Robert Half International 1,261,770
4,200 Roper Technologies 918,540
24,400 Snap-on 4,087,732
14,400 Toro 934,848
38,300 Union Pacific 4,288,068
16,300 United Continental Holdings (1) 1,144,423
10,564 United Parcel Service Class B 1,135,208
15,195 United Technologies 1,808,053
6,300 Verisk Analytics Class A (1) 521,703
6,200 WW Grainger 1,194,740
----------
95,544,281
INFORMATION TECHNOLOGY -- 23.6%
54,652 Accenture Class A 6,629,288
27,100 Activision Blizzard 1,415,975
20,500 Adobe Systems (1) 2,741,670
13,649 Alphabet Class A (1) 12,618,774
13,994 Alphabet Class C (1) 12,678,004
62,430 Amdocs 3,823,213
16,700 Analog Devices 1,272,540
270,973 Apple 38,925,272
2,700 Automatic Data Processing 282,123
11,100 Broadcom Class A 2,450,991
115,900 CA 3,804,997
355,585 Cisco Systems 12,114,781
19,000 Cognizant Technology Solutions Class A (1) 1,144,370
11,451 CSG Systems International 429,527
1,460 DXC Technology (1) 109,996
116,900 eBay (1) 3,905,629
94,400 Facebook Class A (1) 14,183,600
17,000 Hewlett Packard Enterprise 316,710
75,200 HP 1,415,264
337,774 Intel 12,210,530
64,994 International Business Machines 10,417,888
12,600 Intuit 1,577,646
18,000 j2 Global 1,624,320
SHARES VALUE $
------- -----------
43,200 Mastercard Class A 5,025,024
418,950 Microsoft 28,681,317
63,800 NetApp 2,542,430
7,600 NVIDIA 792,680
236,581 Oracle 10,636,682
29,100 PayPal Holdings (1) 1,388,652
147,877 QUALCOMM 7,946,910
5,200 Symantec 164,476
45,400 Teradata (1) 1,324,772
64,722 Texas Instruments 5,124,688
85,100 Visa Class A 7,762,822
10,400 VMware Class A (1) 978,848
210,400 Western Union 4,178,544
-----------
222,640,953
MATERIALS -- 1.7%
51,500 Bemis 2,313,895
10,200 Celanese Class A 887,808
1,900 Chase 194,750
68,200 Dow Chemical 4,282,960
6,900 Eagle Materials 662,193
2,200 Eastman Chemical 175,450
62,200 LyondellBasell Industries Class A 5,272,072
16,800 Rayonier Advanced Materials 222,600
11,400 Schweitzer-Mauduit International 490,770
23,100 Sonoco Products 1,208,361
3,400 Terra Nitrogen LP 312,120
-----------
16,022,979
REAL ESTATE -- 1.0%
5,400 Alexandria Real Estate Equities REIT 607,554
800 American Tower Class A REIT 100,752
26,054 Chesapeake Lodging Trust REIT 607,319
7,900 Getty Realty REIT 202,240
18,800 Hospitality Properties Trust REIT 598,404
51,900 Kimco Realty REIT 1,053,051
17,700 LaSalle Hotel Properties REIT 505,512
13,600 LTC Properties REIT 650,624
9,600 National Health Investors REIT 702,432
18,500 Park Hotels & Resorts REIT 474,895
21,900 Pebblebrook Hotel Trust REIT 651,744
34,640 Quality Care Properties REIT (1) 601,004
26,900 RLJ Lodging Trust REIT 578,081
47,000 Summit Hotel Properties REIT 776,910
9,600 Welltower REIT 685,824
16,400 Xenia Hotels & Resorts REIT 286,344
-----------
9,082,690
TELECOMMUNICATION SERVICES -- 2.5%
374,727 AT&T 14,850,431
184,230 Verizon Communications 8,457,999
-----------
23,308,430
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 16
--------------------------------------------------------------------------------
SCHRODER NORTH AMERICAN EQUITY FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
SHARES VALUE $
---------- -------------
UTILITIES -- 1.3%
128,400 AES 1,452,204
2,900 Ameren 158,601
11,200 Consolidated Edison 887,936
8,400 Edison International 671,748
50,271 Emerson Electric 3,030,336
1,900 Entergy 144,894
27,500 Exelon 952,325
15,800 NextEra Energy 2,110,248
12,900 PG&E 864,945
12,900 Public Service Enterprise Group 568,245
6,500 Sempra Energy 734,630
9,800 Spark Energy Class A 351,820
11,749 UGI 589,330
30,800 Vivint Solar (1) 92,400
-------------
12,609,662
-------------
Total United States 904,649,172
-------------
TOTAL COMMON STOCK
(Cost $668,370,164) 931,809,626
-------------
TOTAL INVESTMENTS -- 98.6%
(Cost $668,370,164) 931,809,626
-------------
OTHER ASSETS LESS
LIABILITIES -- 1.4% 13,095,665
-------------
NET ASSETS -- 100% $944,905,291
=============
(1) Denotes non-income producing security.
The open futures contracts held by the Fund at April 30, 2017, are as follows:
NUMBER OF UNREALIZED
CONTRACTS APPRECIATION
TYPE OF CONTRACT LONG (SHORT) EXPIRATION DATE (DEPRECIATION)
----------------------------------------------------------------------------------------
S&P 500 Index E-MINI 21 Jun-2017 $ 18,169
=========
A summary of the outstanding forward foreign currency contracts held by the
Fund at April 30, 2017, is as follows:
UNREALIZED
CURRENCY TO CURRENCY TO APPRECIATION
COUNTERPARTY SETTLEMENT DATE DELIVER RECEIVE (DEPRECIATION)
------------------------------------------------------------------------------------------------
Royal Bank of Canada 05/24/17 CAD 14,879,235 USD 11,077,098 $ 173,253
=========
CAD -- Canadian Dollar
LP -- Limited Partnership
REIT -- Real Estate Investment Trust
S&P -- Standard & Poor's
USD -- United States Dollar
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 17
--------------------------------------------------------------------------------
SCHRODER NORTH AMERICAN EQUITY FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2017 (UNAUDITED)
The following is a summary of the inputs used as of April 30, 2017, in valuing
the Fund's investments carried at value:
INVESTMENTS IN SECURITIES (1) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------------- --------- ----------- -------------
Common Stock (2) $ 931,809,626 $ -- $ -- $ 931,809,626
------------- --------- ----------- -------------
Total Investments in Securities $ 931,809,626 $ -- $ -- $ 931,809,626
============= ========= =========== =============
OTHER FINANCIAL INSTRUMENTS LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------------- --------- ----------- -------------
Futures -- Unrealized Appreciation $ 18,169 $ -- $ -- $ 18,169
Forwards -- Unrealized Appreciation -- 173,253 -- 173,253
------------- --------- ----------- -------------
Total Other Financial Instruments $ 18,169 $ 173,253 $ -- $ 191,422
============= ========= =========== =============
(1) There were no transfers between levels during the reporting period, based
on the input levels assigned under the hierarchy at the beginning and 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.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 18
--------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS SMALL CAP FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2017 (UNAUDITED)
SHARES VALUE $
---------- -------------
COMMON STOCK -- 97.4%
BRAZIL -- 3.3%
4,900 Energisa SA - Units 34,888
4,300 Odontoprev 15,458
8,700 QGEP Participacoes 17,433
-------------
67,779
CHINA -- 14.9%
8,600 Anhui Gujing Distillery Class B 33,667
12,000 Best Pacific International Holdings 10,537
181 China Biologic Products (1) 21,358
120,000 China Dongxiang Group 22,833
589 China Lodging Group ADR (1) 41,808
15,000 China Shineway Pharmaceutical Group 18,147
11,000 Haitian International Holdings 26,954
1,641 Hollysys Automation Technologies 26,322
39,000 Li Ning (1) 25,671
19,000 Nexteer Automotive Group 29,605
5,800 Suofeiya Home Collection Class A 29,221
92,000 Tenwow International Holdings 19,279
-------------
305,402
EGYPT -- 0.6%
6,448 Credit Agricole Egypt 12,485
-------------
GEORGIA -- 2.0%
3,470 Georgia Healthcare Group (1) (2) 15,955
1,227 TBC Bank Group (1) 25,825
-------------
41,780
GREECE -- 1.8%
1,304 JUMBO 20,583
953 Motor Oil Hellas Corinth Refineries 16,163
-------------
36,746
HONG KONG -- 1.9%
2,600 ASM Pacific Technology 38,707
-------------
INDIA -- 10.0%
1,477 Apollo Hospitals Enterprise 28,315
7,954 Arvind 49,372
1,873 Container of India 35,458
40 Eicher Motors 16,209
6,317 Gateway Distriparks 26,169
466 Pfizer 12,587
2,190 Supreme Industries 37,049
-------------
205,159
SHARES VALUE $
---------- -------------
INDONESIA -- 3.7%
98,300 Aneka Gas Industri (1) 7,781
21,200 Matahari Department Store 23,222
9,800 United Tractors 19,778
104,025 XL Axiata (1) 25,051
-------------
75,832
MALAYSIA -- 2.2%
9,700 Bursa Malaysia 22,926
44,200 Karex 21,382
-------------
44,308
MEXICO -- 3.5%
7,936 Alsea 28,224
2,748 Grupo Aeroportuario del Pacifico Class B 28,317
3,105 Grupo Cementos de Chihuahua 14,760
-------------
71,301
PAKISTAN -- 1.4%
11,300 Habib Bank 29,728
-------------
PHILIPPINES (3) -- 2.7%
121,000 D&L Industries 31,083
13,280 International Container Terminal Services 23,677
-------------
54,760
POLAND -- 1.3%
248 CCC 14,346
1,297 Dino Polska (1) (2) 12,959
-------------
27,305
RUSSIA -- 5.3%
3,701 Globaltrans Investment GDR 28,017
2,162 MegaFon OAO GDR 23,112
1,634 Polymetal International 21,481
3,222 TCS Group Holding GDR 35,441
-------------
108,051
SINGAPORE -- 1.0%
14,600 First Resources 19,593
-------------
SOUTH AFRICA -- 1.4%
2,452 Foschini Group 29,287
-------------
SOUTH KOREA -- 13.9%
379 Cell Biotech 12,307
1,175 Hyundai Livart Furniture 29,378
329 KEPCO Plant Service & Engineering 16,596
682 Koh Young Technology 32,185
510 Korea Kolmar 35,990
184 Mando 37,191
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 19
--------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS SMALL CAP FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
SHARES VALUE $
---------- -------------
107 Medy-Tox 47,035
828 Nexen Tire 9,933
477 S-1 40,913
1,026 WONIK IPS (1) 23,353
-------------
284,881
SPAIN -- 1.1%
8,957 Prosegur Cash (1) (2) 22,831
-------------
SRI LANKA -- 1.3%
25,919 John Keells Holdings 27,381
-------------
TAIWAN -- 17.0%
31,000 Aerospace Industrial Development 37,554
13,000 Chroma ATE 40,675
24,000 CTCI 42,002
2,000 Eclat Textile 21,908
2,100 Gourmet Master 21,090
1,000 King Slide Works 15,396
6,000 Merida Industry 32,216
3,000 Nien Made Enterprises 30,377
2,466 PChome Online 21,087
5,852 Posiflex Technology 31,907
20,400 ScinoPharm Taiwan 28,026
10,000 Toung Loong Textile Manufacturing 26,118
-------------
348,356
THAILAND -- 2.3%
9,400 Bumrungrad Hospital 47,693
-------------
TURKEY -- 2.3%
1,019 Logo Yazilim Sanayi Ve Ticaret (1) 16,668
3,238 Migros Ticaret (1) 22,171
1,017 Tofas Turk Otomobil Fabrikasi 8,469
-------------
47,308
UNITED ARAB EMIRATES -- 2.5%
35,398 Aramex PJSC 50,885
-------------
TOTAL COMMON STOCK
(Cost $1,558,621) 1,997,558
-------------
SHARES VALUE $
---------- -------------
PREFERRED STOCK -- 3.5%
BRAZIL -- 2.6%
8,200 Alpargatas 34,463
1,300 Cia Energetica do Ceara Class A 18,738
-------------
53,201
COLOMBIA -- 0.9%
48,401 Grupo Aval Acciones y Valores 19,166
-------------
TOTAL PREFERRED STOCK
(Cost $56,581) 72,367
-------------
TOTAL INVESTMENTS -- 100.9%
(Cost $1,615,202) 2,069,925
-------------
OTHER LIABILITIES IN EXCESS OF
OTHER ASSETS -- (0.9)% (18,375)
-------------
NET ASSETS -- 100% $2,051,550
=============
(1) Denotes non-income producing security.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration
normally to qualified institutions. On April 30, 2017, the value of these
securities amounted to $51,745, representing 2.5% of the net assets of the
Fund.
(3) Security is fair valued. (See Note 2 in Notes to Financial Statements.)
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
PJSC -- Private Joint Stock Company
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 20
--------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS SMALL CAP FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2017 (UNAUDITED)
The following is a summary of the inputs used as of April 30, 2017, in valuing
the Fund's investments carried at value:
INVESTMENTS IN SECURITIES (1) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------------ --------- -------- ----------
Common Stock
Brazil $ 67,779 $ -- $ -- $ 67,779
China 305,402 -- -- 305,402
Egypt 12,485 -- -- 12,485
Georgia 41,780 -- -- 41,780
Greece 36,746 -- -- 36,746
Hong Kong 38,707 -- -- 38,707
India 205,159 -- -- 205,159
Indonesia 75,832 -- -- 75,832
Malaysia 44,308 -- -- 44,308
Mexico 71,301 -- -- 71,301
Pakistan 29,728 -- -- 29,728
Philippines -- 54,760 -- 54,760
Poland 27,305 -- -- 27,305
Russia 108,051 -- -- 108,051
Singapore 19,593 -- -- 19,593
South Africa 29,287 -- -- 29,287
South Korea 284,881 -- -- 284,881
Spain 22,831 -- -- 22,831
Sri Lanka 27,381 -- -- 27,381
Taiwan 348,356 -- -- 348,356
Thailand 47,693 -- -- 47,693
Turkey 47,308 -- -- 47,308
United Arab Emirates 50,885 -- -- 50,885
---------- -------- ------- -----------
Total Common Stock 1,942,798 54,760 -- 1,997,558
---------- -------- ------- -----------
Preferred Stock
Brazil 53,201 -- -- 53,201
Colombia 19,166 -- -- 19,166
---------- -------- ------- -----------
Total Preferred Stock 72,367 -- -- 72,367
---------- -------- ------- -----------
Total Investments in Securities $2,015,165 $ 54,760 $ -- $ 2,069,925
========== ======== ======= ===========
(1) Transfers between investment levels may occur as markets fluctuate and/or
the availability of data used in an investment's valuation changes. The
Fund generally recognizes transfers between the levels as of the beginning
and end of the reporting period. As of April 30, 2017, the Fund had
securities with a total value of $54,760 transfer from Level 1 to Level 2.
The change in level occurred due to a scheduled market holiday.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 21
--------------------------------------------------------------------------------
SCHRODER SHORT DURATION BOND FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2017 (UNAUDITED)
PRINCIPAL
AMOUNT ($) VALUE $
----------- ---------
CORPORATE OBLIGATIONS -- 74.5%
CONSUMER DISCRETIONARY -- 4.9%
Ford Motor Credit LLC (1)
300,000 2.095%, 01/09/18 301,120
McDonald's MTN
84,000 2.100%, 12/07/18 84,509
Newell Brands
14,000 2.600%, 03/29/19 14,172
Toyota Motor Credit MTN (1)
300,000 1.476%, 01/12/18 300,626
Walgreens Boots Alliance
44,000 1.750%, 05/30/18 44,166
------------
744,593
------------
CONSUMER STAPLES -- 14.8%
Anheuser-Busch InBev Finance
145,000 1.900%, 02/01/19 145,303
CVS Health
150,000 1.900%, 07/20/18 150,357
Danone (2)
314,000 1.691%, 10/30/19 310,188
Kraft Heinz Foods
245,000 2.800%, 07/02/20 248,833
200,000 2.000%, 07/02/18 200,505
Kroger
127,000 2.000%, 01/15/19 127,135
Molson Coors Brewing
104,000 2.100%, 07/15/21 102,077
80,000 1.900%, 03/15/19 (2) 79,951
Mondelez International Holdings
Netherlands BV (2)
200,000 1.625%, 10/28/19 197,068
Philip Morris International
180,000 1.625%, 02/21/19 179,407
Reynolds American
375,000 2.300%, 06/12/18 377,043
Tyson Foods
150,000 2.650%, 08/15/19 151,510
------------
2,269,377
------------
ENERGY -- 7.2%
Energy Transfer Partners
58,000 2.500%, 06/15/18 58,261
Enterprise Products Operating LLC
78,000 6.500%, 01/31/19 83,958
EOG Resources
105,000 5.625%, 06/01/19 112,583
Kinder Morgan
150,000 3.050%, 12/01/19 153,004
PRINCIPAL
AMOUNT ($) VALUE $
----------- ---------
Phillips 66
225,000 2.950%, 05/01/17 225,000
50,000 1.884%, 04/15/20 (1) (2) 50,075
Shell International Finance BV (1)
154,000 1.470%, 09/12/19 154,638
TransCanada PipeLines
265,000 1.625%, 11/09/17 264,954
------------
1,102,473
------------
FINANCIALS -- 26.4%
American Express Credit
31,000 2.125%, 03/18/19 31,171
American Express Credit MTN
40,000 2.200%, 03/03/20 40,212
150,000 1.800%, 07/31/18 150,171
American International Group
91,000 3.300%, 03/01/21 93,254
Barclays
300,000 2.000%, 03/16/18 300,147
Branch Banking & Trust
250,000 2.100%, 01/15/20 251,125
Capital One
250,000 2.400%, 09/05/19 251,039
Cooperatieve Rabobank UA
250,000 1.700%, 03/19/18 250,347
Discover Bank
250,000 2.600%, 11/13/18 252,139
Goldman Sachs Group
188,000 2.750%, 09/15/20 189,921
24,000 2.000%, 04/25/19 23,996
HSBC Bank (1) (2)
250,000 1.679%, 05/15/18 250,977
HSBC USA
125,000 2.000%, 08/07/18 125,247
JPMorgan Chase MTN
230,000 1.700%, 03/01/18 230,206
Metropolitan Life Global Funding I MTN (2)
222,000 1.750%, 12/19/18 221,797
Morgan Stanley (1)
380,000 1.842%, 02/14/20 381,035
Prudential Financial MTN
75,000 2.350%, 08/15/19 75,645
Standard Chartered (2)
379,000 2.400%, 09/08/19 378,822
SunTrust Bank
153,000 2.250%, 01/31/20 153,792
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 22
--------------------------------------------------------------------------------
SCHRODER SHORT DURATION BOND FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
PRINCIPAL
AMOUNT ($) VALUE $
----------- ---------
Wells Fargo MTN (1)
140,000 1.783%, 04/23/18 140,608
Wells Fargo Bank MTN
261,000 1.800%, 11/28/18 261,175
------------
4,052,826
------------
HEALTHCARE -- 5.6%
Abbott Laboratories
75,000 2.350%, 11/22/19 75,406
AbbVie
300,000 1.800%, 05/14/18 300,422
Actavis Funding SCS
150,000 3.000%, 03/12/20 152,942
Aetna
96,000 1.700%, 06/07/18 96,022
Medtronic
150,000 1.500%, 03/15/18 149,928
UnitedHealth Group
75,000 1.900%, 07/16/18 75,329
------------
850,049
------------
INDUSTRIALS -- 4.3%
General Electric Capital MTN
340,000 4.375%, 09/16/20 365,800
Rockwell Collins
42,000 1.950%, 07/15/19 42,053
Siemens Financieringsmaatschappij (2)
250,000 2.200%, 03/15/20 251,557
------------
659,410
------------
INFORMATION TECHNOLOGY -- 5.2%
Apple
153,000 1.900%, 02/07/20 153,822
Cisco Systems (1)
152,000 1.492%, 09/20/19 152,819
Dell International LLC (2)
118,000 3.480%, 06/01/19 120,690
Microsoft
372,000 2.000%, 11/03/20 373,771
------------
801,102
------------
MATERIALS -- 0.0%
Rio Tinto Finance USA
6,000 2.875%, 08/21/22 6,057
------------
PRINCIPAL
AMOUNT ($) VALUE $
----------- ---------
TELECOMMUNICATION SERVICES -- 4.2%
AT&T
255,000 2.450%, 06/30/20 255,377
Verizon Communications (2)
379,000 2.946%, 03/15/22 380,992
------------
636,369
------------
UTILITIES -- 1.9%
Dominion Resources
20,000 1.600%, 08/15/19 19,786
NextEra Energy Capital Holdings
70,000 1.649%, 09/01/18 69,794
Southern
209,000 1.550%, 07/01/18 208,324
------------
297,904
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $11,370,509) 11,420,160
------------
U.S. TREASURY OBLIGATIONS -- 14.8%
United States Treasury Bill (3)
370,000 0.772%, 07/20/17 369,364
United States Treasury Note
1,900,000 1.125%, 02/28/19 1,896,067
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,260,831) 2,265,431
------------
ASSET-BACKED SECURITIES -- 4.3%
CLI Funding V LLC, Series 2013-2A (2)
188,803 3.220%, 06/18/28 182,676
Harley-Davidson Motorcycle Trust,
Series 2014-1, Class A3
186,448 1.100%, 09/15/19 186,316
SoFi Professional Loan Program LLC,
Series 2015-C, Class A1 (1) (2)
288,464 2.041%, 08/27/35 290,074
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $663,441) 659,066
------------
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 23
--------------------------------------------------------------------------------
SCHRODER SHORT DURATION BOND FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
PRINCIPAL
AMOUNT ($) VALUE $
----------- ---------
MUNICIPAL BONDS -- 3.6%
FLORIDA -- 0.9%
State Board of Administration Finance RB,
Series A
145,000 2.163%, 07/01/19 146,209
------------
ILLINOIS -- 0.8%
State GO
40,000 5.877%, 03/01/19 41,774
35,000 5.000%, 02/01/18 35,760
40,000 5.000%, 11/01/18 41,559
------------
119,093
------------
MASSACHUSETTS -- 1.6%
State Water Resources Authority RB,
Series Sub A-1 (1)
250,000 0.930%, 08/01/37 250,000
------------
NEW JERSEY -- 0.3%
State Transportation Trust Fund
Authority RB
40,000 5.000%, 06/15/19 42,229
------------
TOTAL MUNICIPAL BONDS
(Cost $556,342) 557,531
------------
TOTAL INVESTMENTS -- 97.2%
(Cost $14,851,123) 14,902,188
------------
OTHER ASSETS LESS
LIABILITIES -- 2.8% 433,218
------------
NET ASSETS -- 100% $15,335,406
===========
The open futures contracts held by the Fund at April 30, 2017, are as follows:
NUMBER OF UNREALIZED
CONTRACTS APPRECIATION
TYPE OF CONTRACT LONG (SHORT) EXPIRATION DATE (DEPRECIATION)
----------------------------------------------------------------------------
U.S. 2-Year Treasury Note 18 Jun-2017 $ 12,814
U.S. 5-Year Treasury Note (8) Jun-2017 (14,951)
--------
$ (2,137)
========
(1) Variable Rate Security -- Rate disclosed is as of April 30, 2017.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration
normally to qualified institutions. On April 30, 2017, the value of these
securities amounted to $2,714,867, representing 17.7% of the net assets of
the Fund.
(3) Zero Coupon Security -- Rate disclosed is the effective yield at time of
purchase.
GO -- General Obligation
LLC -- Limited Liability Company
MTN -- Medium Term Note
RB -- Revenue Bond
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 24
--------------------------------------------------------------------------------
SCHRODER SHORT DURATION BOND FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2017 (UNAUDITED)
The following is a summary of the inputs used as of April 30, 2017, in valuing
the Fund's investments carried at value:
INVESTMENTS IN SECURITIES (1) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
--------- ------------ -------- ------------
Corporate Obligations $ -- $ 11,420,160 $ -- $ 11,420,160
U.S. Treasury Obligations -- 2,265,431 -- 2,265,431
Asset-Backed Securities -- 659,066 -- 659,066
Municipal Bonds -- 557,531 -- 557,531
-------- ------------ ------- ------------
Total Investments in Securities $ -- $ 14,902,188 $ -- $ 14,902,188
======== ============ ======= ============
OTHER FINANCIAL INSTRUMENTS LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-------- ------------ ------- ------------
Futures -- Unrealized Appreciation $ 12,814 $ -- $ -- $ 12,814
Futures -- Unrealized Depreciation (14,951) -- -- (14,951)
-------- ------------ ------- ------------
Total Other Financial Instruments $ (2,137) $ -- $ -- $ (2,137)
======== ============ ======= ============
(1) There were no transfers between levels during the reporting period, based
on the input levels assigned under the hierarchy at the beginning and end
of the reporting period.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 25
--------------------------------------------------------------------------------
SCHRODER TOTAL RETURN FIXED INCOME FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2017 (UNAUDITED)
PRINCIPAL
AMOUNT + VALUE $
----------- ---------
CORPORATE OBLIGATIONS -- 48.7%
CONSUMER DISCRETIONARY -- 4.5%
Charter Communications Operating LLC (1)
195,000 5.375%, 05/01/47 199,515
Ford Motor Credit LLC
260,000 5.000%, 05/15/18 268,043
460,000 2.095%, 01/09/18 (2) 461,718
General Motors Financial
700,000 3.700%, 11/24/20 721,445
George Washington University
205,000 3.485%, 09/15/22 212,134
L Brands
205,000 6.875%, 11/01/35 202,130
Newell Brands
190,000 3.850%, 04/01/23 198,398
Scientific Games International
125,000 7.000%, 01/01/22 133,827
VTR Finance BV (1)
200,000 6.875%, 01/15/24 212,500
Walgreens Boots Alliance
260,000 1.750%, 05/30/18 260,979
------------
2,870,689
------------
CONSUMER STAPLES -- 3.5%
Anheuser-Busch InBev Finance
35,000 2.650%, 02/01/21 237,885
Kraft Heinz Foods
425,000 4.375%, 06/01/46 404,361
400,000 3.500%, 07/15/22 412,656
Marfrig Holdings Europe BV (1)
215,000 6.875%, 06/24/19 223,267
Molson Coors Brewing (1)
326,000 2.250%, 03/15/20 326,485
Mondelez International Holdings
Netherlands BV (1) (2)
485,000 1.782%, 10/28/19 486,851
Smithfield Foods (1)
150,000 2.700%, 01/31/20 150,332
------------
2,241,837
------------
ENERGY -- 7.7%
Cenovus Energy (1)
570,000 4.250%, 04/15/27 565,384
Continental Resources
302,000 5.000%, 09/15/22 304,642
PRINCIPAL
AMOUNT + VALUE $
--------- ---------
Crestwood Midstream Partners
275,000 6.250%, 04/01/23 287,031
Enbridge (2)
240,000 6.000%, 01/15/77 244,800
Energy Transfer Partners
615,000 4.150%, 10/01/20 639,963
Ensco
373,000 5.750%, 10/01/44 271,693
Noble Energy
550,000 4.150%, 12/15/21 581,260
Petroleos Mexicanos
129,000 5.625%, 01/23/46 114,842
400,000 3.500%, 01/30/23 381,840
Phillips 66 (1) (2)
185,000 1.786%, 04/15/19 185,223
Plains All American Pipeline
100,000 4.500%, 12/15/26 103,801
Shell International Finance BV (2)
490,000 1.470%, 09/12/19 492,030
Targa Resources Partners
200,000 6.750%, 03/15/24 218,000
Valero Energy
230,000 3.400%, 09/15/26 222,753
Williams Partners
340,000 4.300%, 03/04/24 353,169
------------
4,966,431
------------
FINANCIALS -- 21.1%
Aflac
240,000 2.400%, 03/16/20 243,377
American Express
34,000 8.125%, 05/20/19 38,147
American International Group
350,000 3.300%, 03/01/21 358,668
Bank of America MTN
85,000 7.625%, 06/01/19 94,461
275,000 5.625%, 07/01/20 302,031
300,000 4.000%, 01/22/25 302,699
Bank of New York Mellon (2)
415,000 4.625%, 12/29/49 408,775
Barclays Bank (1)
600,000 10.179%, 06/12/21 755,726
BBVA Banco Continental (1)
240,000 3.250%, 04/08/18 243,120
Citigroup
295,000 3.200%, 10/21/26 285,092
675,000 2.750%, 04/25/22 673,011
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 26
--------------------------------------------------------------------------------
SCHRODER TOTAL RETURN FIXED INCOME FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
PRINCIPAL
AMOUNT + VALUE $
--------- --------
Cooperatieve Centrale Raiffeisen-
Boerenleenbank BA
495,000 3.950%, 11/09/22 513,700
Credit Suisse Group Funding Guernsey
365,000 3.450%, 04/16/21 372,466
Credit Suisse NY
275,000 1.700%, 04/27/18 274,923
Fidelity & Guaranty Life Holdings (1)
410,000 6.375%, 04/01/21 420,250
FMS Wertmanagement AoeR
825,000 1.625%, 11/20/18 827,411
Goldman Sachs Group
65,000 2.875%, 02/25/21 65,757
165,000 2.822%, 02/25/21 (2) 170,950
Goldman Sachs Group MTN
131,000 2.654%, 11/29/23 135,461
HSBC Bank USA
350,000 4.875%, 08/24/20 375,144
HSBC Holdings (2)
315,000 2.650%, 01/05/22 323,931
JPMorgan Chase
475,000 6.000%, 10/01/17 483,743
195,000 2.700%, 05/18/23 192,155
M&T Bank (2)
475,000 5.125%, 12/29/49 480,344
Manufacturers & Traders Trust
355,000 6.625%, 12/04/17 364,923
MetLife
169,000 7.717%, 02/15/19 186,201
Moody's
136,000 5.500%, 09/01/20 149,341
Morgan Stanley MTN
300,000 3.750%, 02/25/23 311,127
Norddeutsche Landesbank Girozentrale (1)
400,000 2.000%, 02/05/19 400,959
Prudential Financial MTN
37,000 7.375%, 06/15/19 41,130
10,000 6.000%, 12/01/17 10,252
Regions Bank
420,000 2.250%, 09/14/18 421,507
Royal Bank of Scotland Group
560,000 3.875%, 09/12/23 560,897
Sparebank 1 Boligkreditt (1)
1,000,000 1.750%, 11/15/19 993,550
PRINCIPAL
AMOUNT + VALUE $
--------- ----------
Standard Chartered (1)
20,000 3.950%, 01/11/23 20,146
Standard Chartered MTN (1)
575,000 1.700%, 04/17/18 573,856
Unum Group
145,000 3.000%, 05/15/21 147,084
US Bancorp (2)
295,000 5.300%, 12/29/49 304,956
Wells Fargo
215,000 3.069%, 01/24/23 217,463
Wells Fargo MTN
150,000 4.750%, 12/07/46 154,641
Wells Fargo Capital X
405,000 5.950%, 12/15/36 437,400
------------
13,636,775
------------
HEALTHCARE -- 2.8%
Abbott Laboratories
190,000 4.900%, 11/30/46 198,783
Boston Scientific
320,000 2.650%, 10/01/18 323,071
EMD Finance LLC (1)
500,000 2.400%, 03/19/20 501,363
Shire Acquisitions Investments Ireland DAC
795,000 2.400%, 09/23/21 785,231
------------
1,808,448
------------
INDUSTRIALS -- 2.7%
Barrick North America Finance LLC
19,000 4.400%, 05/30/21 20,542
Empresa de Transporte de Pasajeros
Metro (1)
200,000 5.000%, 01/25/47 213,522
Fly Leasing
430,000 6.375%, 10/15/21 447,200
General Electric Capital MTN
79,000 6.875%, 01/10/39 112,705
Lockheed Martin
350,000 2.500%, 11/23/20 354,080
Meritor
330,000 6.250%, 02/15/24 342,375
Rockwell Collins
270,000 3.200%, 03/15/24 273,072
------------
1,763,496
------------
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 27
--------------------------------------------------------------------------------
SCHRODER TOTAL RETURN FIXED INCOME FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
PRINCIPAL
AMOUNT + VALUE $
--------- ----------
INFORMATION TECHNOLOGY -- 1.1%
Apple
95,000 4.250%, 02/09/47 97,990
Dell International LLC (1)
215,000 5.450%, 06/15/23 232,021
Microsoft
340,000 4.100%, 02/06/37 353,708
------------
683,719
------------
MATERIALS -- 0.4%
BHP Billiton Finance USA (1) (2)
260,000 6.250%, 10/19/75 282,100
------------
REAL ESTATE -- 0.9%
American Tower REIT
600,000 2.800%, 06/01/20 607,401
------------
TELECOMMUNICATION SERVICES -- 1.8%
AT&T
300,000 5.250%, 03/01/37 307,680
390,000 3.400%, 05/15/25 379,792
Verizon Communications
290,000 5.250%, 03/16/37 300,448
155,000 2.946%, 03/15/22 (1) 155,815
------------
1,143,735
------------
UTILITIES -- 2.2%
Berkshire Hathaway Energy
185,000 5.750%, 04/01/18 192,026
Dominion Resources
155,000 1.600%, 08/15/19 153,344
Dynegy
130,000 7.625%, 11/01/24 118,950
70,000 7.375%, 11/01/22 67,025
Exelon
93,000 2.450%, 04/15/21 92,463
Fermaca Enterprises S de RL (1)
301,445 6.375%, 03/30/38 312,372
Mexico Generadora de Energia (1)
186,904 5.500%, 12/06/32 189,941
Suburban Propane Partners
300,000 5.750%, 03/01/25 297,750
------------
1,423,871
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $31,008,178) 31,428,502
------------
PRINCIPAL
AMOUNT + VALUE $
--------- ----------
U.S. TREASURY OBLIGATIONS (3) -- 16.3%
United States Treasury Inflation
Indexed Bonds
931,767 1.000%, 02/15/46 954,458
349,968 0.750%, 02/15/45 336,245
1,290,676 0.125%, 07/15/26 1,268,130
United States Treasury Notes
340,000 2.875%, 11/15/46 334,183
820,600 2.500%, 02/15/46 745,816
935,000 2.500%, 05/15/46 849,170
977,400 2.250%, 11/15/25 977,820
790,000 2.250%, 08/15/46 678,166
275,000 2.000%, 10/31/21 277,653
455,000 2.000%, 12/31/21 459,123
1,190,000 2.000%, 11/15/26 1,161,087
460,000 1.875%, 02/28/22 461,527
335,000 1.875%, 03/31/22 335,851
315,000 1.750%, 11/30/21 314,655
1,125,000 1.625%, 05/15/26 1,065,938
320,000 0.750%, 08/31/18 318,100
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $10,742,248) 10,537,922
------------
ASSET-BACKED SECURITIES -- 10.7%
AmeriCredit Automobile Receivables Trust,
Series 2013-1, Class C
4,421 1.570%, 01/08/19 4,422
AmeriCredit Automobile Receivables Trust,
Series 2013-5, Class C
680,000 2.290%, 11/08/19 682,453
Barclays Dryrock Issuance Trust,
Series 2014-3, Class A
151,000 2.410%, 07/15/22 152,968
Carlyle Global Market Strategies,
Series 2017-1A, Class A1A (1) (2)
605,000 2.461%, 04/20/31 607,191
CPS Auto Receivables Trust, Series
2014-C, Class A (1)
47,470 1.310%, 02/15/19 47,452
Credit-Based Asset Servicing and
Securitization LLC, Series 2003-CB4,
Class AF1
19,158 5.000%, 03/25/31 18,726
Cronos Containers Program, Series
2013-1A, Class A (1)
150,000 3.080%, 04/18/28 146,583
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 28
--------------------------------------------------------------------------------
SCHRODER TOTAL RETURN FIXED INCOME FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
PRINCIPAL
AMOUNT + VALUE $
--------- ---------
Flagship Credit Auto Trust, Series 2014-1,
Class B (1)
137,399 2.550%, 02/18/20 137,466
Flagship Credit Auto Trust, Series 2015-2,
Class A (1)
464,172 1.980%, 10/15/20 464,875
Octagon Investment Partners 24,
Series 2015-1A, Class A1 (1) (2)
600,000 2.502%, 05/21/27 600,073
Octagon Investment Partners 30,
Series 2017-1A, Class A1 (1) (2)
250,000 2.355%, 03/17/30 251,892
OneMain Financial Issuance Trust,
Series 2014-1A, Class A (1)
172,005 2.430%, 06/18/24 172,037
OneMain Financial Issuance Trust,
Series 2014-2A, Class A (1)
160,547 2.470%, 09/18/24 160,784
Santander Drive Auto Receivables Trust,
Series 2013-3, Class C
61,016 1.810%, 04/15/19 61,056
Santander Drive Auto Receivables Trust,
Series 2013-5, Class C
380,073 2.250%, 06/17/19 381,008
Santander Drive Auto Receivables Trust,
Series 2014-1, Class C
481,271 2.360%, 04/15/20 482,749
Santander Drive Auto Receivables Trust,
Series 2014-2, Class C
422,067 2.330%, 11/15/19 423,734
SpringCastle America Funding LLC,
Series 2016-AA, Class A (1)
303,381 3.050%, 04/25/29 305,575
Springleaf Funding Trust, Series 2015-AA,
Class A (1)
850,000 3.160%, 11/15/24 859,387
Synchrony Credit Card Master Note Trust,
Series 2012-2, Class A
200,000 2.220%, 01/15/22 201,823
Trinity Rail Leasing LLC, Series 2013-1A,
Class A (1)
177,025 3.898%, 07/15/43 172,169
Voya CLO, Series 2017-2A, Class A1R (1) (2)
595,000 2.408%, 04/17/30 595,000
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $6,924,316) 6,929,423
------------
PRINCIPAL
AMOUNT + VALUE $
--------- ---------
U.S. GOVERNMENT MORTGAGE-
BACKED OBLIGATIONS -- 9.9%
FEDERAL HOME LOAN MORTGAGE
CORPORATION -- 4.7%
FHLMC
2,092,587 4.000%, 03/01/47 2,204,632
547,870 3.500%, 05/01/46 563,844
FHLMC Gold
81,915 4.500%, 10/01/24 84,106
165,572 3.000%, 01/01/43 166,336
FHLMC IO REMIC
2 1076.722%, 01/15/22 (2) 20
------------
3,018,938
------------
FEDERAL NATIONAL MORTGAGE
CORPORATION -- 4.6%
FNMA
50,290 5.000%, 10/01/29 55,062
2,092,396 4.000%, 03/01/47 2,205,223
166,445 3.204%, 06/01/42 (2) 172,688
102,497 3.000%, 05/01/43 102,957
335,936 3.000%, 06/01/43 337,442
124,190 3.000%, 07/01/43 124,727
------------
2,998,099
------------
GOVERNMENT NATIONAL MORTGAGE
CORPORATION -- 0.6%
GNMA
235,427 2.603%, 04/16/54 (2) 243,366
GNMA IO
2,286,216 0.850%, 12/16/51 (2) 122,575
1,113,654 0.606%, 10/16/44 (2) 25,564
------------
391,505
------------
TOTAL U.S. GOVERNMENT MORTGAGE-
BACKED OBLIGATIONS
(Cost $6,472,580) 6,408,542
------------
MUNICIPAL BONDS -- 4.0%
FLORIDA -- 1.8%
Hurricane Catastrophe Fund Finance RB,
Series A
1,130,000 2.995%, 07/01/20 1,161,244
------------
MASSACHUSETTS -- 1.5%
State Water Resources Authority RB,
Series Sub A-3 (2)
990,000 0.920%, 08/01/37 990,000
------------
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 29
--------------------------------------------------------------------------------
SCHRODER TOTAL RETURN FIXED INCOME FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
PRINCIPAL
AMOUNT + VALUE $
---------- ---------
OHIO -- 0.1%
American Municipal Power RB, Series B
40,000 8.084%, 02/15/50 61,846
------------
PENNSYLVANIA -- 0.6%
Philadelphia Authority for Industrial
Development RB
350,000 3.964%, 04/15/26 349,188
------------
TOTAL MUNICIPAL BONDS
(Cost $2,531,047) 2,562,278
------------
SOVEREIGN GOVERNMENTS -- 3.4%
Brazil Notas do Tesouro Nacional Serie F
BRL 1,400,000 10.000%, 01/01/27 432,418
Costa Rica Government
International Bond (4)
520,000 4.250%, 01/26/23 505,050
Mexican Bonos
MXN 14,515,000 7.500%, 06/03/27 785,843
Province of Manitoba Canada
185,000 9.625%, 12/01/18 206,877
Saudi Government International
Bond MTN (1)
295,000 2.375%, 10/26/21 289,849
------------
TOTAL SOVEREIGN GOVERNMENTS
(Cost $2,107,036) 2,220,037
- -----------
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 1.2%
Cold Storage Trust, Series 2017-ICE3,
Class D (2)
140,000 3.094%, 04/15/19 140,000
FREMF Mortgage Trust, Series KF02,
Class B (1) (2)
206,431 3.779%, 12/25/45 207,031
Impac Secured Assets Trust, Series
2006-1, Class 2A2 (2)
112,267 1.401%, 05/25/36 102,198
Impac Secured Assets Trust, Series
2006-2, Class 2M1 (2)
130,000 1.491%, 08/25/36 119,184
One Market Plaza Trust, Series 2017-
1MKT, Class E
195,000 4.142%, 02/10/24 192,039
------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $754,541) 760,452
------------
PRINCIPAL
AMOUNT + VALUE $
---------- ---------
COMMERCIAL MORTGAGE-BACKED
OBLIGATION -- 0.3%
LSTAR Commercial Mortgage Trust,
Series 2014-2, Class B (1) (2)
205,000 4.205%, 01/20/41
(Cost $204,992) 204,838
------------
TOTAL INVESTMENTS -- 94.5%
(Cost $60,744,938) 61,051,994
------------
OTHER ASSETS LESS
LIABILITIES -- 5.5% 3,538,387
------------
NET ASSETS -- 100% $64,590,381
============
+ In U.S. Dollars unless otherwise indicated.
(1) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration
normally to qualified institutions. On April 30, 2017, the value of these
securities amounted to $12,866,500, representing 19.9% of the net assets of
the Fund.
(2) Variable Rate Security -- Rate disclosed is as of April 30, 2017.
(3) Security, or a portion of this security, has been pledged as collateral on
open derivative positions and mortgage dollar rolls.
(4) Security exempt from registration under Regulation S of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration normally to qualified institutions. On April 30, 2017, the
value of these securities amounted to $505,050, representing 0.8% of the
net assets of the Fund.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 30
--------------------------------------------------------------------------------
SCHRODER TOTAL RETURN FIXED INCOME FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
The open futures contracts held by the Fund at April 30, 2017, are as follows:
NUMBER OF UNREALIZED
CONTRACTS APPRECIATION
TYPE OF CONTRACT LONG (SHORT) EXPIRATION DATE (DEPRECIATION)
----------------------------------------------------------------------------------
Euro-BTP (11) Jun-2017 $ (18,341)
Euro-Bund (10) Jun-2017 9,168
U.S. 2-Year Treasury Note (2) Jun-2017 (97)
U.S. 5-Year Treasury Note 48 Jun-2017 26,825
U.S. 10-Year Treasury Note 11 Jun-2017 3,173
U.S. Long Treasury Bond 7 Jun-2017 6,612
U.S. Ultra Long Treasury Bond (9) Jun-2017 (14,992)
---------
$ 12,348
=========
A summary of the outstanding forward foreign currency contracts held by the
Fund at April 30, 2017, is as follows:
UNREALIZED
CURRENCY TO CURRENCY TO APPRECIATION
COUNTERPARTY SETTLEMENT DATE DELIVER RECEIVE (DEPRECIATION)
--------------------------------------------------------------------------------
Goldman Sachs 06/23/17 MXN 6,900,000 USD 359,109 $ (4,079)
========
A list of the open centrally cleared swap agreements held by the Fund at April
30, 2017, is as follows: Credit Default Swaps -- Buy Protection
UNREALIZED
NOTIONAL PREMIUMS PAID APPRECIATION
REFERENCE ENTITY FIXED RATE COUNTERPARTY MATURITY CURRENCY AMOUNT (RECEIVED) (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------
Cdx.Na.Hy S27 5Year 5.00% Morgan Stanley 12/20/21 USD 1,188,000 $ (38,914) $ (57,359)
========= =========
BRL -- Brazilian Real
Cdx.Na.Hy -- Credit Derivatives Index - High Yield
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
IO -- Interest Only
LLC -- Limited Liability Company
MTN -- Medium Term Note
MXN -- Mexican Peso
RB -- Revenue Bond
REMIC -- Real Estate Mortgage Investment Conduit
REIT -- Real Estate Investment Trust
USD -- United States Dollar
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 31
--------------------------------------------------------------------------------
SCHRODER TOTAL RETURN FIXED INCOME FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2017 (UNAUDITED)
The following is a summary of the inputs used as of April 30, 2017, in valuing
the Fund's investments carried at value:
INVESTMENTS IN SECURITIES (1) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-------- ------------ --------- -----------
Corporate Obligations $ -- $ 31,428,502 $ -- $ 31,428,502
U.S. Treasury Obligations -- 10,537,922 -- 10,537,922
Asset-Backed Securities -- 6,929,423 -- 6,929,423
U.S. Government Mortgage-Backed Obligations -- 6,408,542 -- 6,408,542
Municipal Bonds -- 2,562,278 -- 2,562,278
Sovereign Governments -- 2,220,037 -- 2,220,037
Collateralized Mortgage Obligations -- 760,452 -- 760,452
Commercial Mortgage-Backed Obligation -- 204,838 -- 204,838
-------- ------------ --------- ------------
Total Investments in Securities $ -- $ 61,051,994 $ -- $ 61,051,994
======== ============ ========= ============
OTHER FINANCIAL INSTRUMENTS LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-------- ------------ --------- -----------
Futures -- Unrealized Appreciation $ 45,778 $ -- $ -- $ 45,778
Futures -- Unrealized Depreciation (33,430) -- -- (33,430)
Forwards -- Unrealized Depreciation -- (4,079) -- (4,079)
Credit Default Swaps -- Unrealized Depreciation -- (57,359) -- (57,359)
-------- ------------ --------- -----------
Total Other Financial Instruments $ 12,348 $ (61,438) $ -- $ (49,090)
======== ============ ========= ===========
(1) There were no transfers between levels during the reporting period, based
on the input levels assigned under the hierarchy at the beginning and end
of the reporting period.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 32
--------------------------------------------------------------------------------
SCHRODER LONG DURATION INVESTMENT-GRADE BOND FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2017 (UNAUDITED)
PRINCIPAL
AMOUNT ($) VALUE $
----------- ---------
CORPORATE OBLIGATIONS -- 53.9%
CONSUMER DISCRETIONARY -- 2.3%
21st Century Fox America
308,000 4.750%, 09/15/44 313,497
McDonald's MTN
327,000 4.875%, 12/09/45 352,208
Newell Brands
400,000 5.375%, 04/01/36 453,198
Time Warner
570,000 4.850%, 07/15/45 551,730
------------
1,670,633
------------
CONSUMER STAPLES -- 6.2%
Altria Group
800,000 5.375%, 01/31/44 931,124
Anheuser-Busch InBev Finance
665,000 4.900%, 02/01/46 726,481
CVS Health
652,000 5.125%, 07/20/45 728,652
Kraft Heinz Foods
390,000 6.500%, 02/09/40 475,164
404,000 5.200%, 07/15/45 427,047
Molson Coors Brewing
289,000 4.200%, 07/15/46 273,345
Reynolds American
191,000 8.125%, 05/01/40 263,524
646,000 5.850%, 08/15/45 763,318
------------
4,588,655
------------
ENERGY -- 5.1%
ConocoPhillips
169,000 4.300%, 11/15/44 170,900
Enbridge
232,000 5.500%, 12/01/46 254,891
Energy Transfer Partners
400,000 5.150%, 03/15/45 383,856
Ensco
158,000 5.750%, 10/01/44 115,087
Enterprise Products Operating LLC
505,000 5.100%, 02/15/45 540,101
Marathon Petroleum
132,000 5.000%, 09/15/54 118,262
250,000 4.750%, 09/15/44 231,322
Noble Energy
400,000 5.050%, 11/15/44 413,058
Petroleos Mexicanos MTN
210,000 5.625%, 01/23/46 186,952
Plains All American Pipeline
400,000 4.900%, 02/15/45 385,150
PRINCIPAL
AMOUNT ($) VALUE $
---------- ----------
Shell International Finance BV
228,000 4.000%, 05/10/46 221,453
TransCanada PipeLines
541,000 7.625%, 01/15/39 770,829
------------
3,791,861
------------
FINANCIALS -- 18.5%
Aflac
144,000 6.450%, 08/15/40 190,214
American International Group
406,000 4.375%, 01/15/55 371,938
168,000 3.900%, 04/01/26 171,322
Bank of America
824,000 6.000%, 10/15/36 1,024,523
Bank of America MTN
300,000 5.000%, 01/21/44 329,137
500,000 3.950%, 04/21/25 501,071
Barclays
750,000 4.950%, 01/10/47 770,407
Citigroup
391,000 4.600%, 03/09/26 405,620
386,000 4.281%, 04/24/48 (1) 379,611
644,000 3.200%, 10/21/26 622,371
Cooperatieve Rabobank UA
250,000 3.750%, 07/21/26 248,065
Cooperatieve Rabobank UA MTN
348,000 5.250%, 05/24/41 412,355
940,000 3.375%, 05/21/25 960,799
HSBC Bank USA
423,000 7.000%, 01/15/39 572,642
JPMorgan Chase
1,744,000 4.950%, 06/01/45 1,856,280
295,000 4.260%, 02/22/48 (1) 296,362
MetLife
495,000 5.875%, 02/06/41 615,312
Morgan Stanley MTN
475,000 4.300%, 01/27/45 474,795
Prudential Financial MTN
476,000 6.200%, 11/15/40 600,223
Standard Chartered (2)
416,000 5.700%, 03/26/44 438,906
Unum Group
693,000 5.750%, 08/15/42 787,401
Wells Fargo
1,291,000 5.606%, 01/15/44 1,479,742
Wells Fargo MTN
250,000 4.750%, 12/07/46 257,735
------------
13,766,831
------------
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 33
--------------------------------------------------------------------------------
SCHRODER LONG DURATION INVESTMENT-GRADE BOND FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
PRINCIPAL
AMOUNT ($) VALUE $
---------- ---------
HEALTHCARE -- 4.5%
Abbott Laboratories
425,000 4.900%, 11/30/46 444,646
AbbVie
545,000 4.700%, 05/14/45 548,728
Actavis Funding SCS
160,000 4.850%, 06/15/44 162,971
489,000 4.550%, 03/15/35 492,432
Anthem
925,000 4.625%, 05/15/42 942,970
Medtronic
713,000 4.625%, 03/15/45 775,599
------------
3,367,346
------------
INDUSTRIALS -- 5.3%
Burlington Northern Santa Fe
700,000 4.150%, 04/01/45 711,838
GE Capital International Funding Unlimited
911,000 4.418%, 11/15/35 973,949
Johnson Controls International
70,000 4.500%, 02/15/47 71,598
Lockheed Martin
494,000 4.700%, 05/15/46 542,824
Rockwell Collins
362,000 4.350%, 04/15/47 366,670
Siemens Financieringsmaatschappij (2)
618,000 4.200%, 03/16/47 640,243
Union Pacific
630,000 4.150%, 01/15/45 642,712
------------
3,949,834
------------
INFORMATION TECHNOLOGY -- 3.4%
Apple
277,000 4.375%, 05/13/45 289,045
106,000 4.250%, 02/09/47 109,337
169,000 3.850%, 08/04/46 163,776
Microsoft
624,000 4.500%, 02/06/57 649,371
236,000 4.450%, 11/03/45 252,011
275,000 3.700%, 08/08/46 262,217
Visa
738,000 4.300%, 12/14/45 789,864
------------
2,515,621
------------
MATERIALS -- 2.9%
Barrick North America Finance LLC
712,000 5.700%, 05/30/41 823,354
Dow Chemical
182,000 9.400%, 05/15/39 293,234
PRINCIPAL
AMOUNT ($) VALUE $
---------- ----------
Glencore Finance Canada (2)
267,000 6.000%, 11/15/41 291,962
International Paper
600,000 4.800%, 06/15/44 613,692
Monsanto
172,000 4.700%, 07/15/64 163,230
------------
2,185,472
------------
TELECOMMUNICATION SERVICES -- 3.8%
AT&T
917,000 4.500%, 05/15/35 868,490
640,000 4.350%, 06/15/45 567,960
Verizon Communications
439,000 5.250%, 03/16/37 454,816
1,040,000 4.672%, 03/15/55 949,458
------------
2,840,724
------------
UTILITIES -- 1.9%
Great Plains Energy
240,000 4.850%, 04/01/47 243,825
Sempra Energy
393,000 6.000%, 10/15/39 476,774
Southern
670,000 4.400%, 07/01/46 666,546
------------
1,387,145
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $38,186,666) 40,064,122
------------
U.S. TREASURY OBLIGATIONS -- 43.8%
United States Treasury Bonds
4,328,000 4.625%, 02/15/40 5,627,582
1,650,000 4.500%, 02/15/36 2,116,318
9,954,100 4.375%, 05/15/40 12,514,563
1,023,000 2.875%, 11/15/46 1,005,498
2,223,300 2.500%, 02/15/46 2,020,684
4,908,700 2.500%, 05/15/46 4,458,096
4,300,000 2.250%, 02/15/27 4,287,401
599,600 2.250%, 08/15/46 514,719
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $34,255,172) 32,544,861
------------
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 34
--------------------------------------------------------------------------------
SCHRODER LONG DURATION INVESTMENT-GRADE BOND FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2017 (UNAUDITED)
PRINCIPAL
AMOUNT ($) VALUE $
---------- -----------
TAXABLE MUNICIPAL BOND -- 0.5%
CALIFORNIA -- 0.5%
University of California RB, Series AD
400,000 4.858%, 05/15/2112
(Cost $397,108) 398,204
------------
TOTAL INVESTMENTS -- 98.2%
(Cost $72,838,946) 73,007,187
------------
OTHER ASSETS LESS
LIABILITIES -- 1.8% 1,369,012
------------
NET ASSETS -- 100% $74,376,199
============
(1) Variable Rate Security -- Rate disclosed is as of April 30, 2017.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration
normally to qualified institutions. On April 30, 2017, the value of these
securities amounted to $1,371,111, representing 1.8% of the net assets of
the Fund.
LLC -- Limited Liability Company
MTN -- Medium Term Note
RB -- Revenue Bond
The following is a summary of the inputs used as of April 30, 2017, in valuing
the Fund's investments carried at value:
INVESTMENTS IN SECURITIES (1) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-------- ------------ ------- ------------
Corporate Obligations $ -- $ 40,064,122 $ -- $ 40,064,122
U.S. Treasury Obligations -- 32,544,861 -- 32,544,861
Taxable Municipal Bond -- 398,204 -- 398,204
-------- ------------ ------- ------------
Total Investments in Securities $ -- $ 73,007,187 $ -- $ 73,007,187
======== ============ ======= ============
(1) There were no transfers between levels during the reporting period, based
on the input levels assigned under the hierarchy at the beginning and end
of the reporting period.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 35
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 2017 (UNAUDITED)
TOTAL RETURN LONG DURATION
NORTH AMERICAN EMERGING MARKETS SHORT DURATION FIXED INCOME INVESTMENT-GRADE
EQUITY FUND SMALL CAP FUND BOND FUND FUND BOND FUND
--------------- ---------------- -------------- ------------ ----------------
ASSETS
Investments in securities, at value --
Note 2 .................................... $931,809,626 $2,069,925 $14,902,188 $61,051,994 $73,007,187
Cash ........................................ 17,903,241 -- 388,234 2,910,024 289,825
Foreign currency ............................ 1 61,172 -- 114,668 --
Receivable for securities sold .............. 18,261,637 -- -- -- 58,453
Dividends and tax reclaims receivabl ........ 943,341 6,887 -- -- --
Prepaid expenses ............................ 26,091 7,788 8,057 25,371 10,286
Receivable for Fund shares sold ............. 4,489 -- 377 5,104 619,634
Due from Investment Advisor -- Note 3 ....... -- 35,350 32,146 29,960 28,160
Unrealized appreciation on spot foreign
currency contracts ........................ -- 28 -- -- --
Unrealized appreciation on forward foreign
currency contracts ........................ 173,253 -- -- -- --
Initial margin for futures contracts ........ 115,500 -- 5,873 102,578 --
Initial margin for centrally cleared swap
contracts ................................. -- -- -- 40,209 --
Interest receivable ......................... -- -- 70,977 448,110 886,660
Variation margin receivable for centrally
cleared swap contracts .................... -- -- -- 4 --
Variation margin receivable for futures
contracts ................................. -- -- -- 6,808 --
------------ ---------- ----------- ----------- -----------
TOTAL ASSETS ........................... 969,237,179 2,181,150 15,407,852 64,734,830 74,900,205
LIABILITIES
Payable for securities purchased ............ 23,937,416 29,783 -- -- 301,317
Unrealized depreciation on spot foreign
currency contracts ........................ 18 16 -- -- --
Variation margin payable for futures
contracts ................................. 5,775 -- 828 3,656 --
Income distributions payable ................ -- -- -- 17,949 --
Accrued foreign capital gains tax ........... -- 7,485 -- -- --
Unrealized depreciation on forward foreign
currency contracts ........................ -- -- -- 4,079 --
Payable for Fund shares redeemed ............ -- -- -- 6,272 129,251
Payable to custodian ........................ -- 9,279 -- -- --
Investment Advisory fees payable -- Note 3 .. 193,459 10,639 3,656 12,889 19,962
Sub-administration fees payable -- Note 3 ... 38,693 10,274 10,274 10,274 10,274
Legal fees payable .......................... 37,564 8,102 9,270 10,319 10,025
Audit fees payable .......................... 20,312 11,133 22,556 25,341 16,150
Shareholder Servicing Fees, Investor
Class -- Note 3 ........................... -- -- -- 6,656 4,895
Accrued expenses and other liabilities ...... 98,651 42,889 25,862 47,014 32,132
------------ ---------- ----------- ----------- -----------
TOTAL LIABILITIES ...................... 24,331,888 129,600 72,446 144,449 524,006
------------ ---------- ----------- ----------- -----------
NET ASSETS ................................... $944,905,291 $2,051,550 $15,335,406 $64,590,381 $74,376,199
============ ========== =========== =========== ===========
Cost of securities $668,370,164 $1,615,202 $14,851,123 $60,744,938 $72,838,946
Cost of foreign currency $ 1 $ 61,194 $ -- $ 108,294 $ --
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 36
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 2017 (UNAUDITED)
TOTAL RETURN LONG DURATION
NORTH AMERICAN EMERGING MARKETS SHORT DURATION FIXED INCOME INVESTMENT-GRADE
EQUITY FUND SMALL CAP FUND BOND FUND FUND BOND FUND
-------------- ---------------- --------------- ----------- ----------------
NET ASSETS
Capital paid-in ........................... $654,319,388 $(1,055,858) $15,317,276 $68,053,410 $75,263,277
Undistributed (distributions in excess of)
net investment income ................... 4,703,442 (24,991) 2,842 (170,751) 27,043
Accumulated net realized gain (loss) on
investments, futures, swap contracts and
foreign currency transactions ........... 22,251,707 2,685,054 (33,640) (3,557,890) (1,082,362)
Accumulated foreign capital gains tax on
appreciated securities .................. -- (7,485) -- -- --
Net unrealized appreciation on investments 263,439,462 454,723 51,065 307,056 168,241
Net unrealized appreciation (depreciation)
on futures, swap contracts, forward
foreign currency contracts and foreign
currency translations ................... 191,292 107 (2,137) (41,444) --
------------ ----------- ----------- ----------- -----------
NET ASSETS ................................. $944,905,291 $ 2,051,550 $15,335,406 $64,590,381 $74,376,199
============ =========== =========== =========== ===========
NET ASSETS:
R6 ........................................ $ N/A $ 2,026,233 $15,233,568 $ N/A $ N/A
Investor .................................. 944,905,291 25,317 101,838 64,590,381 74,376,199
TOTAL SHARES OUTSTANDING END OF PERIOD:
R6 ........................................ N/A 160,129 1,523,285 N/A N/A
Investor .................................. 60,004,416 2,001 10,181 6,532,789 8,608,126
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE (NET
ASSETS SHARES OUTSTANDING)
R6 ........................................ $ N/A $ 12.65 $ 10.00 $ N/A $ N/A
Investor 15.75 12.65 10.00 9.89 8.64
N/A -- R6 Shares currently not offered.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 37
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2017 (UNAUDITED)
NORTH AMERICAN EMERGING MARKETS
EQUITY FUND SMALL CAP FUND
-------------- ----------------
INVESTMENT INCOME
Dividend income ............................. $ 10,287,682 $ 114,997
Interest income ............................. -- --
Foreign taxes withheld ...................... (15,228) (8,919)
------------ -----------
TOTAL INCOME ............................ 10,272,454 106,078
------------ -----------
EXPENSES
Investment Advisory fees -- Note 3 .......... 1,156,599 98,060
Sub-administration fees -- Note 3 ........... 135,067 36,251
Trustees fees and expenses .................. 29,214 5,840
Distribution fees, Advisor Shares -- Note 3 . 34 --
Shareholder Service fees, Investor Shares --
Note 3 .................................... -- --
Shareholder Service fees, Advisor Shares --
Note 3 .................................... -- --
Transfer agent fees ......................... 52,221 41,850
Legal fees .................................. 28,445 5,298
Printing .................................... 23,008 5,611
Custodian fees .............................. 21,562 19,512
Registration fees ........................... 18,743 10,820
Audit fees .................................. 16,947 22,631
Insurance ................................... 13,421 2,875
Pricing fees ................................ 5,199 9,153
Other ....................................... 24,324 3,866
------------ -----------
TOTAL EXPENSES .......................... 1,524,784 261,767
------------ -----------
Expenses waived by Investment Advisor --
Note 3 .................................... -- (98,060)
Reimbursement from Investment Advisor ....... -- (45,895)
Custody Offset -- Note 2 .................... (11,108) (351)
------------ -----------
NET EXPENSES ............................ 1,513,676 117,461
------------ -----------
NET INVESTMENT INCOME (LOSS) ............ 8,758,778 (11,383)
------------ -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FUTURES, SWAP CONTRACTS,
PURCHASED OPTIONS AND FOREIGN CURRENCY
TRANSACTIONS AND TRANSLATIONS
Net realized gain (loss) on investments
sold ...................................... 25,196,071 2,703,834
Net realized gain (loss) on futures ......... 527,943 --
Net realized loss on swap contracts ......... -- --
Net realized loss on purchased options ...... -- --
Net realized gain (loss) on foreign
currency transactions ..................... 244,451 (10,926)
------------ -----------
Net realized gain (loss) on investments,
futures, swap contracts, purchased
options and foreign currency
transactions .......................... 25,968,465 2,692,908
------------ -----------
Change in unrealized appreciation
(depreciation) on investments ............. 76,762,123 (1,358,029)
Change in unrealized appreciation
(depreciation) on futures ................. 57,382 --
Change in unrealized appreciation
on purchased options ...................... -- --
Change in unrealized depreciation
on swap contracts ......................... -- --
Change in accrued foreign capital
gains tax on appreciated securities ....... -- 4,683
Change in unrealized appreciation
(depreciation) on forward foreign
currency contracts and foreign
currency translations ..................... (32,270) (459)
------------ -----------
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 translations ......... 76,787,235 (1,353,805)
------------ -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ..... 102,755,700 1,339,103
------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .................. $111,514,478 $ 1,327,720
============ ===========
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 38
LONG DURATION
SHORT DURATION TOTAL RETURN FIXED INVESTMENT-GRADE
BOND FUND INCOME FUND BOND FUND
-------------- ------------------ ----------------
INVESTMENT INCOME
Dividend income .................................... $ -- $ -- $ --
Interest income .................................... 177,381 1,207,926 1,293,654
Foreign taxes withheld ............................. -- (1,549) --
--------- ----------- -----------
TOTAL INCOME .................................... 177,381 1,206,377 1,293,654
--------- ----------- -----------
EXPENSES
Investment Advisory fees -- Note 3 ................. 28,231 82,729 117,468
Sub-administration fees -- Note 3 .................. 39,908 68,019 69,159
Trustees fees and expenses ......................... 6,014 7,722 7,416
Distribution fees, Advisor Shares -- Notes 3 ....... -- 195 --
Shareholder Service fees, Investor Shares --
Note 3 ........................................... -- 26,334 17,799
Shareholder Service fees, Advisor Shares --
Note 3 ........................................... -- 138 --
Transfeer agent fees ............................... 41,969 28,230 26,252
Legal fees ......................................... 5,354 6,493 6,634
Printing ........................................... 5,640 12,614 6,619
Custodian fees ..................................... 2,241 9,266 3,170
Registration fees .................................. 10,915 17,527 10,538
Audit fees ......................................... 17,691 19,476 16,485
Insurance .......................................... 2,952 4,097 3,290
Pricing fees ....................................... 4,181 15,250 3,881
Other .............................................. 4,583 6,293 6,387
--------- ----------- -----------
TOTAL EXPENSES .................................. 169,679 304,383 295,098
--------- ----------- -----------
Expenses waived by Investment Advisor --
Note 3 ............................................ (28,231) (82,729) (117,468)
Reimbursement from Investment Advisor .............. (103,216) (87,838) (38,588)
Custody Offset -- Note 2 ........................... (325) (1,478) (477)
--------- ----------- -----------
NET EXPENSES .................................... 37,907 132,338 138,565
--------- ----------- -----------
NET INVESTMENT INCOME (LOSS) .................... 139,474 1,074,039 1,155,089
--------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FUTURES, SWAP CONTRACTS,
PURCHASED OPTIONS AND FOREIGN CURRENCY
TRANSACTIONS AND TRANSLATIONS
Net realized gain (loss) on investments
sold ............................................. (33,626) (1,601,483) (980,978)
Net realized gain (loss) on futures ................ -- (666,104) --
Net realized loss on swap contracts ................ -- (67,209) --
Net realized loss on purchased options ............. -- (3,070) --
Net realized gain (loss) on foreign
currency transactions ............................ -- (435,603) --
--------- ----------- -----------
Net realized gain (loss) on investments,
futures, swap contracts, purchased
options and foreign currency
transactions ................................... (33,626) (2,773,469) (980,978)
--------- ----------- -----------
Change in unrealized appreciation
(depreciated) on investments ..................... (106,169) 529,292 (1,957,995)
Change in unrealized appreciation
(depreciation) on futures ......................... (2,137) 327,332 --
Change in unrealized apprecIation
on purchased options ............................. -- 9,000 --
Change in unrealized depreciation
on swap contracts ................................ -- (60,209) --
Change in accrued foreign capital
gains tax on appreciated securities .............. -- -- --
Change in unrealized appreciation
(depreciation) on forward foreign
currency contracts and foreign
currency transactions ............................ -- 10,230 --
--------- ----------- -----------
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 translactions ................. (108,306) 815,645 (1,957,995)
--------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ............ (141,932) (1,957,824) (2,938,973)
--------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERTATIONS ....................... $ (2,458) $ (883,785) $(1,783,884)
========= =========== ===========
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 39
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
NORTH AMERICAN EQUITY FUND
----------------------------------
SIX MONTHS ENDED
APRIL 30, 2017 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2016
---------------- ----------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) ................................ $ 8,758,778 $ 15,708,697
Net realized gain on investments sold, futures and
foreign currency transactions ............................. 25,968,465 35,467,881
Net change in unrealized appreciation (depreciation)
on investments, futures, accrued foreign capital
gains tax on appreciated securities, forward foreign
currency contracts and foreign currency translations ...... 76,787,235 (15,146,245)
------------ -------------
Net increase in net assets resulting from operations ...... 111,514,478 36,030,333
------------ -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
R6 Shares ................................................. N/A N/A
Investor Shares ........................................... (17,040,883) (16,583,526)
Advisor Shares ............................................ (2,399) (6,217)
Net realized gains:
R6 Shares ................................................. N/A N/A
Investor Shares ........................................... (34,629,983) (30,235,544)
Advisor Shares ............................................ (6,225) (13,345)
------------ -------------
Total dividends and distributions ......................... (51,679,490) (46,838,632)
------------ -------------
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 increase (decrease) from R6 Share transactions ....... N/A N/A
------------ -------------
INVESTOR SHARES:
Sales of shares ............................................. 24,049,647 210,684,241
Reinvestment of distributions ............................... 51,436,833 42,402,839
Redemption of shares ........................................ (79,811,757) (112,770,686)
------------ -------------
Total increase (decrease) from Investor Share
transactions ............................................. (4,325,277) 140,316,394
------------ -------------
ADVISOR SHARES*:
Sales of shares ............................................. 291 11,661
Reinvestment of distributions ............................... 7,955 18,015
Redemption of shares ........................................ (183,795) (177,760)
------------ -------------
Total decrease from Advisor Share transactions ............. (175,549) (148,084)
------------ -------------
Net increase (decrease) in net assets from share
transactions ............................................. (4,500,826) 140,168,310
------------ -------------
Total increase (decrease) in net assets .................... 55,334,162 129,360,011
NET ASSETS
Beginning of period ......................................... 889,571,129 760,211,118
------------ -------------
End of period ............................................... $944,905,291 $ 889,571,129
============ =============
Undistributed (distributions in excess of) net
investment income ......................................... $ 4,703,442 $ 12,987,946
============ =============
* Advisor Shares were terminated on December 20, 2016.
N/A -- R6 Shares currently not offered. Advisor Shares were not
offered by these funds.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 40
EMERGING MARKETS SMALL CAP FUND
--------------------------------------
SIX MONTHS ENDED
APRIL 30, 2017 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2016
----------------- ----------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) ................................. $ (11,383) $ 131,102
Net realized gain on investments sold, futures and
foreign currency transactions .............................. 2,692,908 594,865
Net change in unrealized appreciation (depreciation)
on investments, futures, accrued foreign capital
gains tax on appreciated securities, forward foreign
currency translations ...................................... (1,353,805) 1,120,390
------------- -----------
Net increase in net assets resulting from operation ........ 1,327,720 1,846,357
------------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
R6 Shares .................................................. (128,224) --
Investor Shares ............................................ (172) --
Advisor Shares ............................................. -- --
Net realized gains:
R6 Shares .................................................. (551,226) --
Investor Share ............................................. (809) --
Advisor Shares ............................................. -- --
------------- -----------
Total dividends and distributions .......................... (680,431) --
------------- -----------
SHARE TRANACTIONS:
R6 SHARES:
Sales of shares .............................................. 3,503,306 1,814,823
Reinvestment of distributions ................................ 679,450 --
Redemption of shares ......................................... (18,563,469) --
------------- -----------
Total increase (decrease) from R6 Share transactions ....... (14,380,713) 1,814,823
------------- -----------
INVESTOR SHARES:
Sales of shares .............................................. -- --
Reinvestment of distributions ................................ -- --
Redemption of shares ......................................... -- --
------------- -----------
Total increase (decrease) from Investor Share
transactions ............................................. -- --
------------- -----------
ADVISOR 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 Advisor Share transactions ............. N/A N/A
------------- -----------
Net increase (decrease) in net assets from share
transactions ............................................. (14,380,713) 1,814,823
------------- -----------
Total increase (decrease) in net assets .................... (13,733,424) 3,661,180
NET ASSETS
Beginning of period .......................................... 15,784,974 12,123,794
------------- -----------
End of period ................................................ $ 2,051,550 $15,784,974
============= ===========
Undistributed (distributions in excess of)
investment income .......................................... $ (24,991) $ 114,788
============= ===========
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 41
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SHORT DURATION BOND FUND
----------------------------------------
SIX MONTHS ENDED
APRIL 30, 2017 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2016
----------------- ----------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ....................................... $ 139,474 $ 330,592
Net realized gain (loss) on investments sold,
futures, swap contracts, purchased options and
foreign currency transactions ............................. (33,626) 8,032
Net change in unrealized appreciation (depreciation)
on investments, futures, purchased options,
swap contracts, forward foreign currency contracts
and foreign currency translations ....................... (108,306) 142,642
------------ ------------
Net increase (decrease) in net assets resulting from
operations ............................................... (2,458) 481,266
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
R6 Shares .................................................. (138,099) (319,264)
Investor Shares ............................................ (2,918) (12,250)
Advisor Shares ............................................. -- --
Net realized gains:
R6 Shares .................................................. (4,377) (7,440)
Investor Shares ............................................ (180) (310)
Advisor Shares ............................................. -- --
Return of Capital:
Investor Shares ............................................ -- --
Advisor Shares ............................................. -- --
------------ ------------
Total dividends and distributions .......................... (145,574) (339,264)
------------ ------------
SHARE TRANSACTIONS:
R6 SHARES:
Sales of shares ............................................. 174,189 546,598
Reinvestment of distributions ............................... 2,118 1,024
Redemption of shares ........................................ (9,216,792) (290,229)
------------ ------------
Total increase (decrease) from R6 Share transactions ....... (9,040,485) 257,393
------------ ------------
INVESTOR SHARES:
Sales of shares ............................................. -- --
Reinvestment of distributions ............................... -- --
Redemption of shares ........................................ (899,652) --
------------ ------------
Total increase (decrease) from Investor Share
transactions ............................................. (899,652) --
------------ ------------
ADVISOR 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 Advisor Share transactions ............. N/A N/A
------------ ------------
Net increase (decrease) in net assets from share
transactions ............................................. (9,940,137) 257,393
------------ ------------
Total increase (decrease) in net assets .................... (10,088,169) 399,395
NET ASSETS
Beginning of period ......................................... 25,423,575 25,024,180
------------ ------------
End of period ............................................... $ 15,335,406 $ 25,423,575
============ ============
Undistributed (distributions in excess of) net
investment income ......................................... $ 2,842 $ 4,385
============ ============
* Advisor Shares were terminated on December 20, 2016.
N/A -- R6 Shares currently not offered. Advisor Shares were not offered by
these funds.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 42
LONG DURATION INVESTMENT-
TOTAL RETURN FIXED INCOME FUND GRADE BOND FUND
------------------------------------ ------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
APRIL 30, 2017 YEAR ENDED APRIL 30, 2017 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2016 (UNAUDITED) OCTOBER 31, 2016
---------------- ---------------- ----------------- ----------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ................................. $ 1,074,039 $ 3,771,444 $ 1,155,089 $ 2,004,066
Net realized gain (loss) on investments sold,
futures, swap contracts, purchased options and
foreign currency transactions ....................... (2,773,469) (1,343,158) (980,978) 2,220,672
Net change in unrealized appreciation (depreciation)
on investments, futures, purchased options,
swap contracts, forward foreign currency contracts
and foreign currency translations ................... 815,645 2,272,798 (1,957,995) 1,639,432
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from
operations ........................................ (883,785) 4,701,084 (1,783,884) 5,864,170
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
R6 Shares ............................................ -- -- -- --
Investor Shares ...................................... (1,008,753) (3,514,532) (1,158,270) (1,983,704)
Advisor Shares ....................................... (6,690) (33,223) -- --
Net realized gains:
R6 Shares ............................................ -- -- -- --
Investor Shares ...................................... -- (677,828) (2,278,988) (655,687)
Advisor Shares ....................................... -- (5,501) -- --
Return of Capital:
Investor Shares ...................................... -- (127,906) -- --
Advisor Shares ....................................... -- (1,209) -- --
------------ ------------ ------------ ------------
Total dividends and distributions ................... (1,015,443) (4,360,199) (3,437,258) (2,639,391)
------------ ------------ ------------ ------------
SHARE TRANSACTIONS:
R6 SHARES:
Sales of shares ....................................... N/A N/A N/A N/A
Reinvestment of distributions ......................... N/A N/A N/A N/A
Redemption of shares .................................. N/A N/A N/A N/A
------------ ------------ ------------ ------------
Total increase (decrease) from R6 Share transactions N/A N/A N/A N/A
------------ ------------ ------------ ------------
INVESTOR SHARES:
Sales of shares ....................................... 7,581,405 3,480,558 2,944,067 59,374,107
Reinvestment of distributions ......................... 808,650 3,942,179 3,403,649 2,553,019
Redemption of shares .................................. (39,643,894) (93,198,871) (982,719) (12,002,053)
------------ ------------ ------------ ------------
Total increase (decrease) from Investor Share
transactions ....................................... (31,253,839) (85,776,134) 5,364,997 49,925,073
------------ ------------ ------------ ------------
ADVISOR SHARES*:
Sales of shares ....................................... -- 15,782 N/A N/A
Reinvestment of distributions ......................... 2,831 39,078 N/A N/A
Redemptionl of shares ................................. (1,264,851) (273,063) N/A N/A
------------ ------------ ------------ ------------
Total decrease from Advisor Share transactions ...... (1,262,020) (218,203) N/A N/A
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from share
transactions ...................................... (32,515,859) (85,994,337) 5,364,997 49,925,073
------------ ------------ ------------ ------------
Total increase (decrease) in net assets ............. (34,415,087) (85,653,452) 143,855 53,149,852
NET ASSETS
Beginning of period ................................... 99,005,468 184,658,920 74,232,344 21,082,492
------------ ------------ ------------ ------------
End of period ......................................... $ 64,590,381 $ 99,005,468 $ 74,376,199 $ 74,232,344
============ ============ ============ ============
Undistributed (distributions in excess of) net
investment income ................................... $ (170,751) $ (229,347) $ 27,043 $ 30,224
============ ============ ============ ============
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 43
--------------------------------------------------------------------------------
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 NET NET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE, INVESTMENT AND TOTAL FROM FROM NET FROM NET
BEGINNING INCOME UNREALIZED INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD (LOSS) GAINS OPERATIONS INCOME GAIN DISTRIBUTIONS
--------- ---------- ------------- ---------- ---------- ------------- -------------
NORTH AMERICAN EQUITY FUND
Investor Shares
2017* ........................ $ 14.79 $ 0.16 $ 1.70 $ 1.86 $ (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)
2012 ......................... 9.76 0.18 1.13 1.31 (0.15) -- (0.15)
EMERGING MARKETS SMALL CAP FUND
R6 Shares
2017* ........................ $ 12.07 $(0.01)(1) $ 1.08 $ 1.07 $ (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
2017* ........................ $ 12.06 $ 0.01(1) $ 1.07 $ 1.08 $ (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 -- -- --
* For the six months ended April 30, 2017 (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.
(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) Fund commenced operations on August 26, 2015. All ratios for the period
have been annualized, except for the Total Return and Portfolio Turnover
Rate.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 44
RATIO OF NET
RATIO OF EXPENSES RATIO OF EXPENSES INVESTMENT
TO AVERAGE TO AVERAGE INCOME (LOSS) TO
NET ASSETS NET ASSETS AVERAGE NET ASSETS
NET ASSET NET ASSETS, (INCLUDING WAIVERS (EXCLUDING WAIVERS, (INCLUDING WAIVERS,
VALUE, TOTAL END OF PERIOD AND REIMBURSEMENTS, REIMBURSEMENTS REIMBURSEMENTS PORTFOLIO
END OF PERIOD RETURN(A) (000) EXCLUDING OFFSETS) AND OFFSETS) AND OFFSETS) TURNOVER RATE
------------- --------- ------------- -------------------- ------------------ ------------------- ------------
NORTH AMERICAN EQUITY FUND
Investor Shares
2017* $ 15.75 12.86% $ 944,905 0.33% 0.33% 1.89% 28%
2016 14.79 4.20 889,400 0.32 0.32 2.03 70
2015 15.14 3.77 759,878 0.32 0.32 1.91 57
2014 15.42 15.75 805,906 0.31 0.31 1.80 48
2013 13.57 26.76 693,207 0.33 0.33 1.96 31
2012 10.92 13.59 541,720 0.36 0.36 1.81 37
EMERGING MARKETS SMALL CAP FUND
R6 Shares
2017* $ 12.65 9.44% $ 2,026 1.50% 3.33% (0.15)% 23%
2016 12.07 14.73 15,761 1.50 3.01 0.98 41
2015(b) 10.52 5.20 12,103 1.50 6.52 (0.57) 5
Investor Shares
2017* $ 12.65 9.46% $ 25 1.52% 4.26% 0.15% 23%
2016 12.06 14.64 24 1.60 3.10 0.91 41
2015(b) 10.52 5.20 21 1.65 6.67 (0.72) 5
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 45
--------------------------------------------------------------------------------
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 REALIZED
NET ASSET AND DIVIDENDS DISTRIBUTIONS
VALUE, NET UNREALIZED TOTAL FROM FROM NET FROM NET
BEGINNING OF INVESTMENT GAINS INVESTMENT INVESTMENT REALIZED RETURN OF
PERIOD INCOME (LOSSES) OPERATIONS INCOME GAIN CAPITAL
----------- ---------- ------------ ---------- ---------- ----------- ---------
SHORT DURATION BOND FUND
R6 Shares
2017* ............................... $ 10.07 $ 0.07(1) $ (0.06) $ 0.01 $ (0.08) $ --(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
2017* ............................... $ 10.07 $ 0.07(1) $(0.06) $ 0.01 $ (0.08) $ --(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
2017* ............................... $ 10.03 $ 0.16 $(0.15) $ 0.01 $ (0.15) $ -- $ --
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) --
2012 ................................ 10.33 0.26 0.53 0.79 (0.27) (0.12) --
LONG DURATION INVESTMENT-
GRADE BOND FUND
Investor Shares
2017* ............................... $ 9.31 $ 0.14(1) $(0.38) $(0.24) $ (0.14) $(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) --
2012(c) ............................. 10.00 0.40(1) 1.23 1.63 (0.40) (0.12) --
* For the six months ended April 30, 2017 (unaudited). All ratios for the
period have been annualized, except for the 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) Fund commenced operations on August 26, 2015. All ratios for the period
have been annualized, except for the Total Return and Portfolio Turnover
Rate.
(c) Fund commenced operations on October 3, 2011. Financial Highlights are for
the period October 3, 2011 to July 31, 2012. All ratios for the period have
been annualized, except for the Total Return and Portfolio Turnover Rate.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 46
NET ASSETS,
NET ASSET END OF
TOTAL VALUE, END TOTAL PERIOD
DISTRIBUTIONS OF PERIOD RETURN(a) (000)
------------- ---------- --------- -----------
SHORT DURATION BOND FUND
R6 SHARES
2017* ................... $ (0.08) $ 10.00 0.09% $ 15,234
2016 .................... (0.13) 10.07 1.97 24,417
2015(b) ................. (0.01) 10.01 0.25 24,023
INVESTOR SHARES
2017* ................... $ (0.08) $ 10.00 0.09% $ 102
2016 .................... (0.12) 10.07 1.87 1,007
2015(b) ................. (0.01) 10.01 0.22 1,001
TOTAL RETURN FIXED INCOME FUND
INVESTOR SHARES
2017* ................... $ (0.15) $ 9.89 0.09% $ 64,590
2016 .................... (0.31) 10.03 3.77 97,695
2015 .................... (0.26) 9.97 0.30 183,138
2014 .................... (0.26) 10.20 4.97 153,951
2013 .................... (0.64) 9.97 (1.23) 141,390
2012 .................... (0.39) 10.73 7.79 91,809
LONG DURATION INVESTMENT-GRADE BOND FUND
INVESTOR SHARES
2017* ................... $ (0.43) $ 8.64 (2.49)% $ 74,376
2016 .................... (0.53) 9.31 9.80 74,232
2015 .................... (1.66) 8.99 0.94 21,082
2014 .................... (0.87) 10.53 15.51 24,797
2013+ ................... (0.12) 9.96 2.32 44,782
2013++ .................. (0.67) 9.85 (5.68) 44,354
2012(c) ................. (0.52) 11.11 16.87 49,226
RATIO OF NET
RATIO OF EXPENSES RATIO OF EXPENSES INVESTMENT
TO AVERAGE NET TO AVERAGE NET INCOME TO AVERAGE
ASSETS (INCLUDING ASSETS (EXCLUDING NET ASSETS
WAIVERS AND WAIVERS, (INCLUDING WAIVERS, PORTFOLIO
REIMBURSEMENTS, REIMBURSEMENTS REIMBURSEMENTS TURNOVER
EXCLUDING OFFSETS) AND OFFSETS) AND OFFSETS) RATE
------------------ ------------------ ------------------- ---------
SHORT DURATION BOND FUND
R6 SHARES
2017* ..................... 0.39% 1.75% 1.43% 44%
2016 ...................... 0.39 1.10 1.32 59
2015(b) ................... 0.39 2.51 0.88 22
INVESTOR SHARES
2017* ..................... 0.39% 1.27% 1.35% 44%
2016 ...................... 0.49 1.20 1.22 59
2015(b) ................... 0.54 2.66 0.73 22
TOTAL RETURN FIXED INCOME FUND
INVESTOR SHARES
2017* ..................... 0.40% 0.92% 3.24% 44%
2016 ...................... 0.40 0.61 2.80 72
2015 ...................... 0.40 0.56 2.58 93
2014 ...................... 0.40 0.53 2.65 319
2013 ...................... 0.40 0.59 2.09 388
2012 ...................... 0.40 0.75 2.27 524
LONG DURATION INVESTMENT-GRADE BOND FUND
INVESTOR SHARES
2017* ..................... 0.39% 0.83% 3.24% 23%
2016 ...................... 0.39 0.75 3.48 160
2015 ...................... 0.40 1.05 3.80 126
2014 ...................... 0.46 0.83 4.38 53
2013+ ..................... 0.46 1.05 4.75 20
2013++ .................... 0.46 0.84 4.29 62
2012(c) ................... 0.46 0.97 4.74 66
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 47
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2017 (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
four separate series. Included in this report are Schroder Emerging Markets
Small Cap Fund, Schroder Short Duration Bond Fund, Schroder Total Return Fixed
Income Fund and Schroder Long Duration Investment-Grade Bond Fund (each a
"Fund," collectively, the "SST Funds," and together with the SGST Fund, the
"Funds"), all of which are diversified funds. The Schroder Emerging Markets
Small Cap Fund seeks long-term capital appreciation. The Schroder Short
Duration Bond Fund seeks 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 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.
The Schroder Emerging Markets Multi-Cap Equity Fund was liquidated following
the close of business on December 20, 2016. Advisor Shares of the Schroder
North American Equity Fund and Schroder Total Return Fixed Income Fund were
terminated following the close of business on December 20, 2016.
At a meeting held on February 2, 2017, as part of the transition of the Funds to
the SEI Advisors' Inner Circle mutual fund platform (the "Transition"),
shareholders of the Funds approved the election of the Trustees of Schroder
Global Series Trust and Schroder Series Trust. At a meeting held on February 10,
2017, the Trustees approved the Transition, and overall responsibility to
oversee the administration of the Funds transitioned to SEI Investments Global
Funds Services and its affiliates. The Transition took place following the close
of business on February 10, 2017.
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
--------------------------------------------------------------------------------
48
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
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:
VALUATION OF INVESTMENTS: Each Fund calculates the net asset value of its
classes of shares by dividing the total value of its assets attributable to that
class, less its liabilities attributable to that class, by the number of shares
of that class that are outstanding. Each Fund values its shares as of the close
of trading on the New York Stock Exchange (the "Exchange") each day the Exchange
is open. Portfolio securities listed on recognized stock exchanges are valued at
the last reported sale price on the exchange on which the securities are
principally traded, except that NASDAQ official closing prices for all NASDAQ
National Market and NASDAQ Small Cap Market Securities are used, where
applicable. Securities for which market quotations are readily available are
valued at current market value in accordance with the valuation procedures of
SST and SGST (the "Trusts"). Securities for which market values are not readily
available, or for which SIMNA believes the market value is unreliable
(including, for example, certain foreign securities, thinly-traded securities,
IPOs, or securities whose values may have been affected by a particular event),
are valued by SIMNA at their fair values pursuant to procedures adopted by the
Boards of Trustees of the Trusts. It is possible that fair value prices will be
used by a Fund to a significant extent. The value determined for an investment
using the Funds' fair value guidelines may differ from recent market prices for
the investment. Certain securities are valued at fair value on the basis of
valuations furnished by broker-dealers or other market intermediaries. Market
quotations are not readily available for many bonds (excluding most U.S.
Treasury securities), certain preferred stocks, tax-exempt securities and
certain foreign securities. Such securities are generally fair valued.
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 by employing methodologies that utilize actual
market transactions, broker-supplied valuations, or other methodologies designed
to identify the market values for such securities. Such methodologies generally
consider factors such as comparable 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 a Trust's 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.
All equity securities that are not traded on a listed exchange are valued at
the last sale price in the over-the-counter market. If a non-exchange traded
security does not trade on a particular day, then the mean between the last
quoted closing bid and asked price will be used. In the event such market
quotations are not readily available, the security will be valued according to
the Trusts' fair value procedures. Exchange traded options, including options
on indices, are generally valued at the composite mean price or, in the absence
of such a mean price, long positions are valued at the most recent bid price,
and short positions are valued at the most recent ask price. Options not traded
on a securities exchange or board of trade for which market quotations are
readily available are valued at the most recently reported mid-market price.
Rights and warrants are valued at the last reported sale price on the exchange
on which they are principally traded. Futures are valued at the settlement
price established each day by the board of exchange on which they are
principally traded. On days when there is excessive volume or market
volatility, the settlement price may not be available at the time at which the
Funds calculate their net asset values. On such days, the best available price
(which is typically the last sales price) may be used to value the Funds'
futures positions. If rights and warrants are not traded on a particular day,
intrinsic value may be used to value the security. Otherwise, the security will
be valued according to the Trusts' fair value procedures. Swaps held by the
--------------------------------------------------------------------------------
49
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
Funds are valued primarily using valuations from independent pricing services,
if the swap is not centrally cleared. In the case of a swap that is centrally
cleared, it may be valued at the valuation used by the clearing organization in
its determination of applicable margin amounts for the swap. If no valuation is
available using these methods, then valuations can be sought from brokers, or
if no broker quotations are available, from the swap counterparty or by
reference to daily quoted values for the indices or securities upon which the
swap is valued. In the absence of the above, SIMNA's Pricing Committee (the
"Committee") will determine an appropriate method of valuation, subject to the
Trusts' fair value procedures. The Committee is comprised of officers of the
Funds and SIMNA and other responsible personnel of SIMNA. Other securities and
assets for which market quotations are not readily available are valued in
accordance with the Trusts' fair value procedures. 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; or the security's primary pricing source is not able or willing
to provide a price. 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.
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 a Fund calculates its net asset value. The
closing prices of such securities may no longer reflect their market values at
the time a Fund calculates its 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 trade and the time
that a Fund calculates its net asset value. A Significant Event may relate to a
single issuer or to an entire market sector. If a Fund 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
its net asset value, a Committee meeting may be called.
Schroder Emerging Markets Small Cap Fund uses a third-party fair valuation
vendor which provides a fair value for securities of companies located in
countries outside the Western Hemisphere held by the Fund based on certain
factors and methodologies applied by the vendor in the event that there is
movement in the U.S. market that exceeds a specific threshold established by the
Committee in consultation with the Trustees. Such methodologies generally
involve tracking valuation correlations between the U.S. market and each
non-U.S. security. The Committee also determines a "confidence interval" that
will be used, when the threshold is exceeded, to determine the level of
correlation between the value of a foreign security and movements in the U.S.
market before a particular security will be fair valued. In the event that the
threshold established by the Committee is exceeded on a specific day, the Funds
will typically value such securities in their portfolios that exceed the
applicable confidence interval based upon the fair values provided by the
vendor. A security whose value is adjusted in this manner will be classified as
a Level 2 security in the fair value hierarchy.
In accordance with the authoritative guidance under U.S. GAAP, "Fair Value
Measurements" defines fair value, establishes a framework for measuring fair
value and expands disclosures about fair value measurements and requires
disclosure surrounding the various inputs that are used in determining the fair
value of the Funds' investments. These inputs are summarized into the three
broad levels listed below.
o Level 1 -- quoted prices in active markets for identical securities
o Level 2 -- other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit risk,
etc.)
o Level 3 -- significant unobservable inputs (including the Funds' own
assumptions in determining the fair value of investments)
--------------------------------------------------------------------------------
50
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SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
For the purpose of this Fair Value Measurement summary, instruments that have
been fair valued by a third-party vendor as discussed above for Schroder
Emerging Markets Small Cap Fund are generally considered Level 2 instruments.
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. For the
period ended April 30, 2017, 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 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, 2017, 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 year, 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. Dividend
income is recorded net of unrecoverable withholding tax 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.
Foreign dividend and interest income amounts and realized capital gains or
losses are converted to U.S. dollar equivalents using foreign exchange rates in
effect at the date of the transactions. Distributions received on securities
that represent a return of capital or capital gains are recorded as a reduction
of costs of investments and/or as a realized gain. The Funds estimate the
components of distributions received that may be considered non-taxable
distributions or capital gain distributions.
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 Short Duration Bond Fund and Schroder Long Duration
Investment-Grade Bond Fund. Schroder Total Return Fixed Income Fund declares
dividends to
--------------------------------------------------------------------------------
51
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
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
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.
--------------------------------------------------------------------------------
52
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SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
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
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.
The Funds had no outstanding purchased or written options or swaptions
outstanding as of or for the period ended April 30, 2017.
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
--------------------------------------------------------------------------------
53
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
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.
Recent 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.
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 for the Schroder Emerging Markets
Small Cap Fund and has contractually agreed to pay 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 ....................... 1.25% 1.50% 1.65%
Schroder Short Duration Bond Fund .............................. 0.29% 0.39% 0.54%
Schroder Total Return Fixed Income Fund ........................ 0.25% N/A 0.40%
Schroder Long Duration Investment-Grade Bond Fund .............. 0.33% N/A 0.39%
N/A -- Fund is not currently subject to the expense limitation agreement or
Share Class is not currently offered
--------------------------------------------------------------------------------
54
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SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
SIMNA has retained its affiliate Schroder Investment Management North America
Limited ("SIMNA Ltd.") to serve as sub-advisor 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.
PERCENTAGE OF FEES
FUND PAID TO SIMNA LTD.
---- ------------------
Schroder North American Equity Fund .................... 49.5%
Schroder Emerging Markets Small Cap Fund ............... 49.5%
Effective February 11, 2017, under an amended administration and accounting
agreement with SEI Investments Global Funds Services ("SEI" or the
"Administrator"), the SST Funds pay fees to SEI based on the aggregate average
daily net assets of all the SST Funds, according to the following annual rates:
0.100% on the first $500 million of such assets; 0.080% on the next $500
million of such assets; 0.070% on assets in excess of $1.0 billion.
Prior to the Transition on February 10, 2017, under an amended administration
and accounting agreement with SEI, the SST Funds paid fees to SEI based on the
aggregate average daily net assets of all the SST Funds, according to the
following annual rates: 0.0875% on the first $1 billion of such assets; 0.0700%
on the next $2 billion of such assets; 0.0600% on the next $1.5 billion of such
assets; and 0.0575% on assets in excess of $4.5 billion. The cumulative minimum
annual fee for all the SST Funds was $400,000. Each Fund paid its pro rata
portion of such fees.
Effective February 11, 2017, Schroder North American Equity Fund pays SEI a
fee, computed and paid monthly, at an annual rate of 0.050% of the Schroder
North American Equity Fund's average daily net assets. Prior to the Transition
on February 10, 2017, under a sub-administration and accounting agreement with
SEI, Schroder North American Equity Fund paid SEI a fee, computed and paid
monthly, at an annual rate of 0.013% of the Schroder North American Equity
Fund's average daily net assets up to $1 billion and 0.005% of Schroder North
American Equity Fund's average daily net assets over $1 billion. Prior to the
Transition on February 10, 2017, Schroder Fund Advisors LLC ("SFA"), a
wholly-owned subsidiary of SIMNA, provided administrative services to the SGST
Fund. SFA received no compensation for its services for the SGST Fund.
Effective March 13, 2017, 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.
SFA, a subsidiary of SIMNA, previously served as the Funds' distributor.
Although SFA has been replaced by SIDCO as the Funds' distributor, SFA continues
to be involved in the distribution of shares of the Funds through an agreement
with SIDCO and SFA, SIMNA and their affiliates continue to provide shareholder
services.
Prior to March 13, 2017, each Fund had adopted a shareholder service plan (the
"Prior Plan") with respect to its Investor Shares. Under the Prior Plan, each
Fund, except Schroder North American Equity Fund, could make payments out of
the assets attributable to its Investor Shares to SIMNA, SFA, the Funds' prior
distributor, and such other entities as may from time to time act as the
shareholder servicer of such class for providing services and/or incurring
expenses directly or indirectly supporting or relating to the shareholder
servicing function for Investor Shares as compensation for such services and
expenses. Payments under the Prior Plan were made at an annual rate of up to
0.15% of a Fund's average daily net assets attributable to the applicable share
class; payments under the Prior Plan were not made for distribution services or
expenses.
--------------------------------------------------------------------------------
55
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
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, 2017, was as follows:
ASSET LIABILITY
FUND STATEMENT OF ASSETS AND LIABILITIES LOCATION DERIVATIVES DERIVATIVES
-------------------------------------------------------------------------------------------------------------------
SCHRODER NORTH AMERICAN EQUITY FUND
Equity contracts
Futures contracts Variation margin receivable/(payable) $ -- $ (5,775)
Foreign exchange contracts
Forward contracts Unrealized appreciation/(depreciation)
on forward foreign currency contracts 173,253 --
--------- --------
$ 173,253 $ (5,775)
========= ========
SCHRODER SHORT DURATION BOND FUND
Equity contracts
Futures contracts Variation margin receivable/(payable) $ -- $ (828)
--------- --------
$ -- $ (828)
========= ========
SCHRODER TOTAL RETURN FIXED INCOME FUND
Interest rate contracts
Futures contracts Variation margin receivable/(payable) $ 6,808 $ (3,656)
Foreign exchange contracts
Forward contracts Unrealized appreciation/(depreciation)
on forward foreign currency contracts -- (4,079)
Credit contracts
Centrally cleared swap contracts Variation margin receivable/(payable) 4 --
--------- --------
$ 6,812 $ (7,735)
========= ========
The effect of derivative instruments on the Statement of Operations for the
year ended April 30, 2017, was as follows:
The amount of net realized gain (loss) and change in unrealized appreciation
(depreciation) on derivatives:
CHANGE IN
UNREALIZED
NET REALIZED APPRECIATION
FUND GAIN/(LOSS)* (DEPRECIATION)** TOTAL
--------------------------------------------------------------------------------
SCHRODER NORTH AMERICAN EQUITY FUND
Equity contracts
Futures contracts $ 527,943 $ 57,382 $ 585,325
Foreign exchange contracts
Forward contracts 274,086 (76,834) 197,252
--------- --------- ---------
$ 802,029 $ (19,452) $ 782,577
========= ========= =========
--------------------------------------------------------------------------------
56
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
CHANGE IN
UNREALIZED
NET REALIZED APPRECIATION
FUND GAIN/(LOSS)* (DEPRECIATION)** TOTAL
-------------------------------------------------------------------------------------------
SCHRODER SHORT DURATION BOND FUND
Interest rate contracts
Futures contracts $ -- $ (2,137) $ (2,137)
========= ========= =========
SCHRODER TOTAL RETURN FIXED INCOME FUND
Interest rate contracts
Futures contracts $(666,104) $ 327,332 $(338,772)
Purchased options contracts (3,070) 9,000 5,930
Foreign exchange contracts
Forward contracts 13,219 (2,258) 10,961
Credit contracts
Swap contracts (67,209) (60,209) (127,418)
--------- --------- ---------
$(723,164) $ 273,865 $(449,299)
========= ========= =========
* Futures contracts are included in net realized gain (loss) on futures,
forward contracts are included in net realized gain (loss) on foreign
currency transactions, swap contracts are included in net realized loss on
swap contracts and options are included in net realized loss on purchased
options.
** Futures contracts are included in change in unrealized appreciation
(depreciation) on futures, forward contracts are included in change in
unrealized appreciation (depreciation) on forward foreign currency
contracts and foreign currency transactions, options are included in change
in unrealized appreciation on purchased options and swap contracts are
included in change in unrealized depreciation on swap contracts.
The volume of forward contracts and futures contracts, as a percentage of net
assets, based on gross month-end notional amounts during the period, including
long and short positions, at absolute value, was as follows for the period
ended April 30, 2017:
FORWARD FUTURES
SCHRODER NORTH AMERICAN EQUITY FUND CONTRACTS CONTRACTS
--------- ---------
Average Notional Amount Outstanding 1.19% 0.47%
Notional Amount Outstanding as of April 30, 2017 1.15% 0.26%
FUTURES
SCHRODER SHORT DURATION BOND FUND CONTRACTS
---------
Average Notional Amount Outstanding 9.83%
Notional Amount Outstanding as of April 30, 2017 31.60%
FORWARD FUTURES CREDIT DEFAULT
SCHRODER TOTAL RETURN FIXED INCOME FUND CONTRACTS CONTRACTS SWAPS
--------- --------- --------------
Average Notional Amount Outstanding 1.93% 59.37% 0.33%
Notional Amount Outstanding as of April 30, 2017 0.56% 20.75% 0.15%
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.
--------------------------------------------------------------------------------
57
--------------------------------------------------------------------------------
SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
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, 2017:
GROSS ASSETS- GROSS LIABILITIES-
RECOGNIZED IN THE RECOGNIZED IN THE NET AMOUNT COLLATERAL
STATEMENT OF ASSETS STATEMENT OF ASSETS AVAILABLE TO PLEDGED OR
AND LIABILITIES AND LIABILITIES BE OFFSET (RECEIVED)+ NET AMOUNT++
--------------------------------------- ------------------- ------------------- ------------ ---------------- ----------------
SCHRODER NORTH AMERICAN EQUITY FUND
FORWARD CONTRACTS FORWARD CONTRACTS
----------------- -----------------
Royal Bank of Canada $ 173,253 $ -- $ 173,253 $ -- $ 173,253
========= ========== ========= ======== =========
SCHRODER TOTAL RETURN FIXED INCOME FUND
FORWARD CONTRACTS FORWARD CONTRACTS
----------------- ------------------
Goldman Sachs $ -- $ (4,079) $ (4,079) $ -- $ (4,079)
========= ========== ========= ======== =========
+ 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.
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 SFA 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, 2017.
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, 2017 were as follows:
SALES AND
PURCHASES MATURITIES
--------- ----------
Schroder North American Equity Fund ................ $ 253,535,713 $300,109,896
Schroder Emerging Markets Small Cap Fund ........... 3,327,727 18,008,726
Schroder Short Duration Bond Fund .................. 2,215,170 9,207,133
Schroder Total Return Fixed Income Fund ............ 8,082,844 30,212,504
Schroder Long Duration Investment-Grade Bond Fund .. 5,764,323 3,813,790
Purchases and proceeds from sales and maturities of U.S. Government securities
for the period ended April 30, 2017 were as follows:
SALES AND
PURCHASES MATURITIES
------------ ------------
Schroder Short Duration Bond Fund ......................... $ 4,841,605 $ 6,523,779
Schroder Total Return Fixed Income Fund ................... 17,169,580 27,129,032
Schroder Long Duration Investment-Grade Bond Fund ......... 12,644,874 12,890,685
--------------------------------------------------------------------------------
58
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SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
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, 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, 2016, the Funds reclassified the following permanent amounts
between capital paid-in, undistributed net investment income and accumulated
realized gain (loss):
INCREASE INCREASE
(DECREASE) (DECREASE)
UNDISTRIBUTED ACCUMULATED INCREASE
NET INVESTMENT REALIZED GAIN (DECREASE)
INCOME (LOSS) CAPITAL PAID-IN
--------------- ------------- ---------------
Schroder North American Equity Fund ............... $ 254,919 $ (253,388) $ (1,531)
Schroder Emerging Markets Small Cap Fund .......... (3,258) 3,258 --
Schroder Short Duration Bond Fund ................. 2,350 (2,350) --
Schroder Total Return Fixed Income Fund ........... (634,081) 634,081 --
The tax character of dividends and distributions declared during the years or
periods ended October 31, 2016 and October 31, 2015, was as follows:
ORDINARY LONG-TERM RETURN OF
INCOME CAPITAL GAIN CAPITAL TOTAL
------------ ------------ --------- -----------
Schroder North American Equity Fund
2016 $ 20,753,720 $ 26,084,912 $ -- $ 46,838,632
2015 14,809,732 27,882,801 -- 42,692,533
Schroder Short Duration Bond Fund
2016 339,264 -- -- 339,264
2015 36,990 -- -- 36,990
Schroder Total Return Fixed Income Fund
2016 4,231,084 -- 129,115 4,360,199
2015 4,539,735 -- -- 4,539,735
Schroder Long Duration Investment-Grade Bond Fund
2016 1,983,704 655,687 -- 2,639,391
2015 2,323,869 1,782,961 -- 4,106,830
--------------------------------------------------------------------------------
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SCHRODER MUTUAL FUNDS
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
As of October 31, 2016, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
TOTAL
DISTRIBUTABLE
UNDISTRIBUTED UNDISTRIBUTED UNREALIZED OTHER EARNINGS
ORDINARY LONG-TERM CAPITAL LOSS APPRECIATION TEMPORARY (ACCUMULATED
INCOME CAPITAL GAIN CARRYFORWARDS (DEPRECIATION) DIFFERENCES LOSSES)
------------- ------------- ------------- -------------- ----------- --------------
Schroder North American
Equity Fund .................. $ 20,444,654 $ 27,379,234 $ -- $ 183,132,489 $ (205,462) $ 230,750,915
Schroder Emerging Markets
Small Cap Fund ............... 566,614 102,259 -- 1,791,901 (655) 2,460,119
Schroder Short Duration
Bond Fund .................... 8,928 -- -- 157,234 -- 166,162
Schroder Total Return
Fixed Income Fund ............ -- -- (901,445) (265,147) (397,209) (1,563,801)
Schroder Long Duration
Investment-Grade Bond Fund ... 1,806,456 501,764 -- 2,025,844 -- 4,334,064
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 Total Return Fixed Income Fund ......... $ -- $ 901,445 $ 901,445
During the year ended October 31, 2016, the Fund listed below utilized capital
loss carryforwards to offset capital gains:
Schroder Emerging Markets Small Cap Fund ........ $ 53,942
At April 30, 2017, 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 GROSS NET UNREALIZED
IDENTIFIED UNREALIZED UNREALIZED APPRECIATION
TAX COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
------------- -------------- -------------- --------------
Schroder North American Equity Fund ................. $ 668,370,164 $ 276,440,787 $(13,001,325) $ 263,439,462
Schroder Emerging Markets Small Cap Fund ............ 1,615,202 486,794 (32,071) 454,723
Schroder Short Duration Bond Fund ................... 14,851,123 68,384 (17,319) 51,065
Schroder Total Return Fixed Income Fund ............. 60,744,938 927,996 (620,940) 307,056
Schroder Long Duration Investment-Grade Bond Fund ... 72,838,946 2,265,328 (2,097,087) 168,241
NOTE 8 -- 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 necessarly 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.
--------------------------------------------------------------------------------
60
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SCHRODER MUTUAL FUNDS
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
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 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 Total Return Fixed Income Fund and Schroder Short Duration Bond 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 Short Duration Bond Fund and Schroder Long Duration Investment-Grade
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.
Schroder North American Equity Fund, Schroder Emerging Markets Small Cap Fund,
Schroder Short Duration Bond Fund and Schroder Total Return Fixed Income 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.
--------------------------------------------------------------------------------
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SCHRODER MUTUAL FUNDS
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2017 (UNAUDITED)
NOTE 9 -- 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, 2017 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.
5% OR GREATER SHAREHOLDERS
--------------------------
NUMBER % OF FUND HELD
------ --------------
Schroder North American Equity Fund ............... 2 98.40%
Schroder Emerging Markets Small Cap Fund .......... 1 98.77
Schroder Short Duration Bond Fund ................. 1 97.29
Schroder Total Return Fixed Income Fund ........... 7 84.24
Schroder Long Duration Investment-Grade Bond Fund . 2 92.61
One account shown above holding 99.77% of the Schroder Emerging Markets Small
Cap Fund, and one account shown above holding 97.29% of the Schroder Short
Duration Bond Fund is owned by an affiliate of SIMNA.
NOTE 10 -- 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 0.15% on the total amount of the credit facility. There were no
borrowings under the line of credit for the period ended April 30, 2017.
NOTE 11 -- CAPITAL SHARE TRANSACTIONS
Capital share transactions for the period ended April 30, 2017 (unaudited) and
the year ended October 31, 2016, were as follows:
NORTH AMERICAN EMERGING MARKETS
EQUITY FUND SMALL CAP FUND
---------------------------------------------------------
2017 2016 2017 2016
---------------------------------------------------------
R6 SHARES:
Sales of shares ............................... N/A N/A 293,005 155,552
Reinvestment of distributions ................. N/A N/A 60,342 --
Redemption of shares .......................... N/A N/A (1,498,891) --
----------- ----------- ----------- -------
Net increase (decrease) in R6 Shares ........ N/A N/A (1,145,544) 155,552
=========== =========== =========== =======
INVESTOR SHARES:
Sales of shares ............................... 1,597,685 14,715,604 -- --
Reinvestment of distributions ................. 3,435,994 3,017,996 -- --
Redemption of shares........................... (5,179,770) (7,775,170) -- --
----------- ----------- ----------- -------
Net increase (decrease) in Investor Shares .. (146,091) 9,958,430 -- --
=========== =========== =========== =======
ADVISOR SHARES*:
Sales of shares ............................... 23 800 N/A N/A
Reinvestment of distributions ................. 532 1,285 N/A N/A
Redemption of shares .......................... (12,200) (12,519) N/A N/A
----------- ----------- ----------- -------
Net (decrease) in Advisor Shares (11,645) (10,434) N/A N/A
=========== =========== =========== =======
--------------------------------------------------------------------------------
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SCHRODER MUTUAL FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
APRIL 30, 2017 (UNAUDITED)
SHORT DURATION TOTAL RETURN FIXED LONG DURATION INVESTMENT-
BOND FUND INCOME FUND GRADE BOND FUND
-------------------------------------------------------------------------------
2017 2016 2017 2016 2017 2016
-------------------------------------------------------------------------------
R6 SHARES:
Sales of shares ............................. 17,391 54,160 N/A N/A N/A N/A
Reinvestment of distributions ............... 212 102 N/A N/A N/A N/A
Redemption of shares ........................ (919,809) (28,772) N/A N/A N/A N/A
--------- ------- ---------- ---------- ------- ---------
Net increase (decrease) in R6 Shares ...... (902,206) 25,490 N/A N/A N/A N/A
========= ======= ========== ========== ======= =========
INVESTOR SHARES:
Sales of shares ............................. -- -- 771,460 348,372 346,074 6,666,846
Reinvestment of distributions ............... -- -- 82,460 398,322 401,472 281,108
Redemption of shares ........................ (89,820) -- (4,057,615) (9,382,160) (114,274) (1,318,706)
--------- ------- ---------- ---------- ------- ---------
Net increase (decrease) in Investor Shares (89,820) -- (3,203,695) (8,635,466) 633,272 5,629,248
========= ======= ========== ========== ======= =========
ADVISOR SHARES*:
Sales of shares ............................. N/A N/A -- 1,574 N/A N/A
Reinvestment of distributions ............... N/A N/A 290 3,936 N/A N/A
Redemption of shares ........................ N/A N/A (130,726) (27,537) N/A N/A
--------- ------- ---------- ---------- ------- ---------
Net (decrease) in Advisor Shares .......... N/A N/A (130,436) (22,027) N/A N/A
========= ======= ========== ========== ======= =========
* Advisor Shares terminated on December 20, 2016.
N/A -- R6 Shares currently not offered. Advisor Shares were not offered by
these funds.
NOTE 12 -- REGULATORY MATTERS
In October 2016, the Securities and Exchange Commission (the "SEC") released its
Final Rule on Investment Company Reporting Modernization (the "Rule"). The Rule
which introduces two new regulatory reporting forms for investment companies --
Form N-PORT and Form N-CEN -- also contains amendments to Regulation S-X which
impact financial statement presentation, particularly the presentation of
derivative investments. Although still evaluating the impact of the Rule,
management believes that many of the Regulation S-X amendments are consistent
with the Funds' current financial statement presentation and expects that the
Funds will be able to comply with the Rule's Regulation S-X amendments by the
August 1, 2017 compliance date.
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, 2017.
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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). 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, 2016 to April 30, 2017).
The table below illustrates your Fund's costs in two ways.
o 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."
o 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.
--------------------------------------------------------------------------------
64
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--------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES (UNAUDITED) -- (CONCLUDED)
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
11/1/16 4/30/17 RATIOS PERIOD*
----------------------------------------------------------------------------------------------------------
SCHRODER NORTH AMERICAN EQUITY FUND
----------------------------------------------------------------------------------------------------------
Actual Expenses
Investor Shares $ 1,000.00 $ 1,128.60 0.33% $ 1.74
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 $ 1,094.40 1.50% $ 7.79
Investor Shares 1,000.00 1,094.60 1.52 7.89
Hypothetical Example for Comparison Purposes
R6 Shares $ 1,000.00 $ 1,017.36 1.50% $ 7.50
Investor Shares 1,000.00 1,017.26 1.52 7.60
----------------------------------------------------------------------------------------------------------
SCHRODER SHORT DURATION BOND FUND
----------------------------------------------------------------------------------------------------------
Actual Expenses
R6 Shares $ 1,000.00 $ 1,000.90 0.39% $ 1.93
Investor Shares 1,000.00 1,000.90 0.39 1.93
Hypothetical Example for Comparison Purposes
R6 Shares $ 1,000.00 $ 1,022.86 0.39% $ 1.96
Investor Shares 1,000.00 1,022.86 0.39 1.96
----------------------------------------------------------------------------------------------------------
SCHRODER TOTAL RETURN FIXED INCOME FUND
----------------------------------------------------------------------------------------------------------
Actual Expenses
Investor Shares $ 1,000.00 $ 1,000.90 0.40% $ 1.98
Hypothetical Example for Comparison Purposes
Investor Shares $ 1,000.00 $ 1,022.81 0.40% $ 2.01
----------------------------------------------------------------------------------------------------------
SCHRODER LONG DURATION INVESTMENT-GRADE BOND FUND
----------------------------------------------------------------------------------------------------------
Actual Expenses
Investor Shares $ 1,000.00 $ 975.10 0.39% $ 1.91
Hypothetical Example for Comparison Purposes
Investor Shares $ 1,000.00 $ 1,022.86 0.39% $ 1.96
* 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).
--------------------------------------------------------------------------------
65
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SCHRODER MUTUAL FUNDS
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SHAREHOLDER VOTING RESULTS (UNAUDITED)
A Joint Special Meeting of Shareholders of the Schroder Emerging Markets Small
Cap Fund was held February 2, 2017 for the purpose of electing Trustees of the
Schroder Series Trust, the motion was approved with the following voting
results:
% OF OUTSTANDING
TOTAL SHARES VOTED SHARES VOTED % OF SHARES VOTED
--------------------------------------------------------------------------------
Affirmative 1,500,891 99.99% 100.00%
Against 0 0 0
Abstain 0 0 0
--------------------------------------------------------------------------------
Total 1,500,891 99.99% 100.00%
--------------------------------------------------------------------------------
A Joint Special Meeting of Shareholders of the Schroder Emerging Markets Small
Cap Fund February 2, 2017 for the purpose of approving an amended and restated
management contract Schroder Investment Management North America Inc. ("SIMNA")
and Schroder Series Trust on Schroder Emerging Markets Small Cap Fund, the
motion was approved with the following voting results:
% OF OUTSTANDING
TOTAL SHARES VOTED SHARES VOTED % OF SHARES VOTED
--------------------------------------------------------------------------------
Affirmative 1,500,891 99.99% 100.00%
Against 0 0 0
Abstain/Broker Non Vote 0 0 0
--------------------------------------------------------------------------------
Total 1,500,891 99.99% 100.00%
--------------------------------------------------------------------------------
A Joint Special Meeting of Shareholders of the Schroder Long Duration
Investment-Grade Bond Fund held February 2, 2017 for the purpose of electing
Trustees of the Schroder Series Trust, the motion approved with the following
voting results:
% OF OUTSTANDING
TOTAL SHARES VOTED SHARES VOTED % OF SHARES VOTED
--------------------------------------------------------------------------------
Affirmative 5,009,668 59.88% 100.00%
Against 0 0 0
Abstain 0 0 0
--------------------------------------------------------------------------------
Total 5,009,668 59.88% 100.00%
--------------------------------------------------------------------------------
A Joint Special Meeting of Shareholders of the Schroder Long Duration
Investment-Grade Bond Fund was held February 2, 2017 for the purpose of
approving an amended and restated management contract between SIMNA and
Schroder Series Trust on behalf of the Schroder Long Duration Investment-Grade
Bond Fund, the motion was approved with the following voting results:
% OF OUTSTANDING
TOTAL SHARES VOTED SHARES VOTED % OF SHARES VOTED
--------------------------------------------------------------------------------
Affirmative 5,000,113 59.77% 99.81%
Against 0 0 0
Abstain/Broker Non Vote 9,555 0.11% 0.19%
--------------------------------------------------------------------------------
Total 5,009,668 59.88% 100.00%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
66
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--------------------------------------------------------------------------------
SHAREHOLDER VOTING RESULTS (UNAUDITED) -- (CONCLUDED)
A Joint Special Meeting of Shareholders of the Schroder North American Equity
Fund was held February 2, 2017 for the purpose of electing Trustees of the
Schroder Global Series Trust, the motion was approved with the following voting
results:
% OF OUTSTANDING
TOTAL SHARES VOTED SHARES VOTED % OF SHARES VOTED
--------------------------------------------------------------------------------
Affirmative 59,308,938 98.34% 100.00%
Against 0 0 0
Abstain 0 0 0
--------------------------------------------------------------------------------
Total 59,308,938 98.34% 100.00%
--------------------------------------------------------------------------------
A Joint Special Meeting of Shareholders of the Schroder Short Duration Bond
Fund was held February 2, 2017 for the purpose of electing Trustees of the
Schroder Series Trust, the motion was approved with the following voting
results:
% OF OUTSTANDING
TOTAL SHARES VOTED SHARES VOTED % OF SHARES VOTED
--------------------------------------------------------------------------------
Affirmative 2,507,894 99.07% 100.00%
Against 0 0 0
Abstain 0 0 0
--------------------------------------------------------------------------------
Total 2,507,894 99.07% 100.00%
--------------------------------------------------------------------------------
A Joint Special Meeting of Shareholders of the Schroder Short Duration Bond
Fund was held February 2, 2017 for the purpose of approving an amended and
restated management contract between SIMNA and Schroder Series Trust on behalf
of the Schroder Short Duration Bond Fund, the motion was approved with the
following voting results:
% OF OUTSTANDING
TOTAL SHARES VOTED SHARES VOTED % OF SHARES VOTED
--------------------------------------------------------------------------------
Affirmative 2,507,894 99.07% 100.00%
Against 0 0 0
Abstain/Broker Non Vote 0 0 0
--------------------------------------------------------------------------------
Total 2,507,894 99.07% 100.00%
--------------------------------------------------------------------------------
A Joint Special Meeting of Shareholders of the Schroder Total Return Fixed
Income Fund was held February 2, 2017 for the purpose of electing Trustees of
the Schroder Global Series Trust, the motion was approved with the following
voting results:
% OF OUTSTANDING
TOTAL SHARES VOTED SHARES VOTED % OF SHARES VOTED
--------------------------------------------------------------------------------
Affirmative 2,293,431 38.89% 100.00%
Against 0 0 0
Abstain 0 0 0
--------------------------------------------------------------------------------
Total 2,293,431 38.89% 100.00%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
67
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PRIVACY STATEMENT
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FACTS WHAT DOES SCHRODERS DO WITH YOUR PERSONAL INFORMATION?
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial companies choose how they share your personal
information. Federal law gives consumers the right to limit some
WHY? 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The types of personal information we collect and share depend on
the product or service you have with us. This information can
include:
o Social Security number and income
WHAT? o account balances and account transactions
o assets and investment experience
When you are NO LONGER our customer, we continue to share your
information as described in this notice.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
All financial companies need to share clients' personal information
to run their everyday business. In the section below, we list the
HOW? 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 CAN YOU LIMIT
SHARE? THIS SHARING?
------------------------------------------------------------------------------------------------------------------
FOR OUR EVERYDAY BUSINESS PURPOSES -- such as to process your transactions, Yes No
maintain your account(s), or respond to court orders and legal investigations
------------------------------------------------------------------------------------------------------------------
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 Yes No
transactions and experiences
------------------------------------------------------------------------------------------------------------------
FOR OUR AFFILIATES' EVERYDAY BUSINESS PURPOSES -- information about your No We Don't Share
creditworthiness
------------------------------------------------------------------------------------------------------------------
FOR NONAFFILIATES TO MARKET TO YOU No We Don't Share
------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
For Schroder Mutual Funds, call BFDS at (800) 464-3108.
QUESTIONS? For other inquiries, call Institutional Client Service
at (212) 641-3800 or email clientserviceny@us.schroders.com
--------------------------------------------------------------------------------
[LOGO OMITTED]
--------------------------------------------------------------------------------
PRIVACY STATEMENT
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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 To protect your personal information from
MY PERSONAL INFORMATION? 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 We collect your personal information, for
MY PERSONAL INFORMATION? example, when you
o open an account and provide account
information
o give us your contact information
o show your driver's license or government
issued ID
o enter into an investment advisory contract
o make a wire transfer
--------------------------------------------------------------------------------
WHY CAN'T I LIMIT ALL SHARING? Federal law gives you the right to limit only
o sharing for affiliates' everyday business
purposes--information about your
creditworthiness
o affiliates from using your information to
market to you
o 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.
o 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.
o 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.
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JOINT MARKETING A formal agreement between nonaffiliated
financial companies that together market
financial products or services to you.
o Schroders doesn't jointly market.
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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 Boston Financial Data Services, Inc.
SERVICING AGENT
CUSTODIAN JPMorgan Chase Bank
COUNSEL Morgan, Lewis & Bockius LLP
INDEPENDENT REGISTERED PUBLIC PricewaterhouseCoopers LLP
CCOUNTING FIRM
This report is transmitted to shareholders
only. It is not authorized 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 performance. 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
[LOGO OMITTED]
SCH-SA-001-0100
ITEM 2. CODE OF ETHICS.
Not applicable for semi-annual report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual report.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semi-annual report.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end management investment companies.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments is included as part of the Report to Shareholders filed
under Item 1 of this form.
Item 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end management investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable. Effective for closed-end management investment companies for
fiscal years ending on or after December 31, 2005
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND
AFFILIATED PURCHASERS.
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no changes to the procedures by which shareholders may
recommend nominees to the Registrant's Board of Trustees during the period
covered by this report.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The Registrant's principal executive and principal financial officers, or
persons performing similar functions, have concluded that the Registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act
(17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the
report, are effective based on the evaluation of these controls and procedures
required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules
13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There has been no change in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the second fiscal quarter of the period
covered by this report that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial reporting.
ITEMS 12. EXHIBITS.
(a)(1) Not applicable for semi-annual report.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the Registrant as required by Rule 30a-2(a)
under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are
filed herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this
filing as an Exhibit.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Schroder Global Series Trust
By (Signature and Title) /s/ Michael Beattie
----------------------------
Michael Beattie, President
Date: July 7, 2017
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Michael Beattie
----------------------------
Michael Beattie, President
Date: July 7, 2017
By (Signature and Title) /s/ Stephen Connors
----------------------------
Stephen Connors,
Treasurer, Controller & CFO
Date: July 7, 2017