schroder international selection fund · schroder international selection fund audited annual...

Schroder InternationalSelection FundAudited Annual Report

31 December 2017

Luxembourg

R.C.S Luxembourg B 8.202

Schroder International Selection FundSocit dInvestissement Capital Variable (SICAV)

Audited Annual Report31 December 2017

No subscriptions can be received on the basis of periodical reports. Subscriptions arevalid only if made on the basis of the current prospectus, the current Key InvestorsInformation Documents, accompanied by the last available audited annual report orunaudited semi-annual report if published thereafter. This report is based on the currentprospectus.

Audited annual and unaudited semi-annual reports, the current prospectus, KIID and theArticles of Incorporation of the Company are available, free of charge, at the Companysregistered office, 5, rue Hhenhof, L-1736 Senningerberg, Grand Duchy of Luxembourg.

Schroder International Selection Fund Audited Annual Report 31 December 2017

Table of contents

Schroder International Selection Fund . . . . . . . . . . . . . . . . . . . . . .9

Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

Directors Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Investment Managers Report . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . .19

Audit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .173

Statement of Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175

Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . . . . .275

Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .295

Distribution of Investments by Industry . . . . . . . . . . . . . . . . . . .315

Portfolio of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .335

Mainstream Equity FundsSchroder ISF Asian Opportunities . . . . . . . . . . . . . . . . . . . . . . . .335

Schroder ISF EURO Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .336

Schroder ISF European Large Cap . . . . . . . . . . . . . . . . . . . . . . .337

Schroder ISF Global Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .338

Schroder ISF Italian Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .339

Schroder ISF Japanese Equity . . . . . . . . . . . . . . . . . . . . . . . . . .340

Schroder ISF Swiss Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .341

Schroder ISF UK Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .341

Schroder ISF US Large Cap . . . . . . . . . . . . . . . . . . . . . . . . . . . .342

Specialist Equity FundsSchroder ISF Asia Pacific Cities Real Estate . . . . . . . . . . . . . . . .342

Schroder ISF Asia Pacific ex-Japan Equity * . . . . . . . . . . . . . . . . .343

Schroder ISF Asian Dividend Maximiser . . . . . . . . . . . . . . . . . . . .344

Schroder ISF Asian Equity Yield . . . . . . . . . . . . . . . . . . . . . . . . .345

Schroder ISF Asian Smaller Companies . . . . . . . . . . . . . . . . . . .346

Schroder ISF Asian Total Return . . . . . . . . . . . . . . . . . . . . . . . . .347

Schroder ISF BRIC (Brazil, Russia, India, China) . . . . . . . . . . . . .348

Schroder ISF China A * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .349

Schroder ISF China Opportunities . . . . . . . . . . . . . . . . . . . . . . . .349

Schroder ISF Emerging Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . .350

Schroder ISF Emerging Europe . . . . . . . . . . . . . . . . . . . . . . . . . .351

Schroder ISF Emerging Markets Equity Alpha * . . . . . . . . . . . . . .352

Schroder ISF Emerging Markets . . . . . . . . . . . . . . . . . . . . . . . . .353

Schroder ISF European Alpha Focus . . . . . . . . . . . . . . . . . . . . . .355

Schroder ISF European Dividend Maximiser . . . . . . . . . . . . . . . .355

Schroder ISF European Equity (Ex UK) . . . . . . . . . . . . . . . . . . . .356

Schroder ISF European Equity Yield . . . . . . . . . . . . . . . . . . . . . .357

* Please refer to the Directors Report for details of all corporate actions that occurred during the year under review.


Table of contents

Specialist Equity Funds (cont)Schroder ISF European Opportunities . . . . . . . . . . . . . . . . . . . . .358

Schroder ISF European Smaller Companies . . . . . . . . . . . . . . . .359

Schroder ISF European Special Situations . . . . . . . . . . . . . . . . . .360

Schroder ISF European Total Return . . . . . . . . . . . . . . . . . . . . . .361

Schroder ISF European Value . . . . . . . . . . . . . . . . . . . . . . . . . . .362

Schroder ISF Frontier Markets Equity . . . . . . . . . . . . . . . . . . . . .363

Schroder ISF Global Cities Real Estate . . . . . . . . . . . . . . . . . . . .364

Schroder ISF Global Climate Change Equity . . . . . . . . . . . . . . . .365

Schroder ISF Global Dividend Maximiser . . . . . . . . . . . . . . . . . . .366

Schroder ISF Global Emerging Market Opportunities . . . . . . . . . .367

Schroder ISF Global Emerging Markets Smaller Companies . . . . .368

Schroder ISF Global Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . .369

Schroder ISF Global Equity Yield . . . . . . . . . . . . . . . . . . . . . . . . .369

Schroder ISF Global Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .370

Schroder ISF Global Recovery . . . . . . . . . . . . . . . . . . . . . . . . . .371

Schroder ISF Global Smaller Companies . . . . . . . . . . . . . . . . . . .372

Schroder ISF Global Sustainable Growth * . . . . . . . . . . . . . . . . . .375

Schroder ISF Greater China . . . . . . . . . . . . . . . . . . . . . . . . . . . .376

Schroder ISF Hong Kong Equity . . . . . . . . . . . . . . . . . . . . . . . . .377

Schroder ISF Indian Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .378

Schroder ISF Indian Opportunities . . . . . . . . . . . . . . . . . . . . . . . .379

Schroder ISF Japanese Opportunities . . . . . . . . . . . . . . . . . . . . .379

Schroder ISF Japanese Smaller Companies . . . . . . . . . . . . . . . .380

Schroder ISF Korean Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .381

Schroder ISF Latin American . . . . . . . . . . . . . . . . . . . . . . . . . . .382

Schroder ISF Middle East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .383

Schroder ISF Swiss Equity Opportunities . . . . . . . . . . . . . . . . . . .384

Schroder ISF Swiss Small & Mid Cap Equity . . . . . . . . . . . . . . . .384

Schroder ISF Taiwanese Equity . . . . . . . . . . . . . . . . . . . . . . . . . .385

Schroder ISF UK Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . .385

Schroder ISF US Small & Mid Cap Equity . . . . . . . . . . . . . . . . . .386

Schroder ISF US Smaller Companies . . . . . . . . . . . . . . . . . . . . .387

Alpha Equity FundsSchroder ISF Global Equity Alpha . . . . . . . . . . . . . . . . . . . . . . . .388

Quantitative Equity FundsSchroder ISF QEP Global Active Value . . . . . . . . . . . . . . . . . . . .389

Schroder ISF QEP Global Blend . . . . . . . . . . . . . . . . . . . . . . . . .395

Schroder ISF QEP Global Core . . . . . . . . . . . . . . . . . . . . . . . . . .399

Schroder ISF QEP Global Emerging Markets . . . . . . . . . . . . . . . .405

Schroder ISF QEP Global ESG . . . . . . . . . . . . . . . . . . . . . . . . . .409

Schroder ISF QEP Global Quality . . . . . . . . . . . . . . . . . . . . . . . .413

Schroder ISF QEP Global Value Plus . . . . . . . . . . . . . . . . . . . . . .417



Table of contents

Asset Allocation FundsSchroder ISF Multi-Asset Strategies * . . . . . . . . . . . . . . . . . . . . . .420

Multi-Asset FundsSchroder ISF Emerging Multi-Asset Income * . . . . . . . . . . . . . . . .420

Schroder ISF Global Diversified Growth . . . . . . . . . . . . . . . . . . . .426

Schroder ISF Global Multi-Asset Balanced . . . . . . . . . . . . . . . . .428

Schroder ISF Global Multi-Asset Conservative . . . . . . . . . . . . . . .435

Schroder ISF Global Multi-Asset Flexible . . . . . . . . . . . . . . . . . . .437

Schroder ISF Global Multi-Asset Income . . . . . . . . . . . . . . . . . . .443

Schroder ISF Global Target Return . . . . . . . . . . . . . . . . . . . . . . .459

Schroder ISF Japan DGF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .461

Schroder ISF Multi-Asset PIR Italia * . . . . . . . . . . . . . . . . . . . . . . .462

Schroder ISF Multi-Asset Total Return . . . . . . . . . . . . . . . . . . . . .463

Schroder ISF Strategic Beta * . . . . . . . . . . . . . . . . . . . . . . . . . . .464

Schroder ISF Wealth Preservation . . . . . . . . . . . . . . . . . . . . . . . .464

Multi-Manager FundsSchroder ISF Multi-Manager Diversity . . . . . . . . . . . . . . . . . . . . .465

Absolute Return FundsSchroder ISF Asian Bond Absolute Return * . . . . . . . . . . . . . . . . .466

Schroder ISF Emerging Markets Debt Absolute Return . . . . . . . .468

Schroder ISF EURO Credit Absolute Return . . . . . . . . . . . . . . . .469

Schroder ISF European Alpha Absolute Return . . . . . . . . . . . . . .474

Schroder ISF European Equity Absolute Return . . . . . . . . . . . . . .474

Schroder ISF QEP Global Absolute . . . . . . . . . . . . . . . . . . . . . . .475

Mainstream Bond FundsSchroder ISF EURO Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . .478

Schroder ISF EURO Government Bond . . . . . . . . . . . . . . . . . . . .482

Schroder ISF EURO Short Term Bond . . . . . . . . . . . . . . . . . . . .483

Schroder ISF Global Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . .485

Schroder ISF Global Inflation Linked Bond . . . . . . . . . . . . . . . . . .493

Schroder ISF Hong Kong Dollar Bond . . . . . . . . . . . . . . . . . . . . .494

Schroder ISF US Dollar Bond . . . . . . . . . . . . . . . . . . . . . . . . . . .498

Specialist Bond FundsSchroder ISF Asian Convertible Bond . . . . . . . . . . . . . . . . . . . . .503

Schroder ISF Asian Local Currency Bond . . . . . . . . . . . . . . . . . .504

Schroder ISF Emerging Market Bond . . . . . . . . . . . . . . . . . . . . .506

Schroder ISF Emerging Market Corporate Bond . . . . . . . . . . . . .508

Schroder ISF EURO Corporate Bond . . . . . . . . . . . . . . . . . . . . .512

Schroder ISF EURO Credit Conviction . . . . . . . . . . . . . . . . . . . . .518

Schroder ISF EURO High Yield . . . . . . . . . . . . . . . . . . . . . . . . . .523

Schroder ISF Global Conservative Convertible Bond . . . . . . . . . .528

Schroder ISF Global Convertible Bond . . . . . . . . . . . . . . . . . . . .530



Table of contents

Specialist Bond Funds (cont)Schroder ISF Global Corporate Bond . . . . . . . . . . . . . . . . . . . . .532

Schroder ISF Global Credit Duration Hedged . . . . . . . . . . . . . . .539

Schroder ISF Global Credit Income . . . . . . . . . . . . . . . . . . . . . . .544

Schroder ISF Global Credit Value * . . . . . . . . . . . . . . . . . . . . . . . .552

Schroder ISF Global High Income Bond . . . . . . . . . . . . . . . . . . .553

Schroder ISF Global High Yield . . . . . . . . . . . . . . . . . . . . . . . . . .556

Schroder ISF Global Multi Credit . . . . . . . . . . . . . . . . . . . . . . . . .564

Schroder ISF Global Unconstrained Bond . . . . . . . . . . . . . . . . . .571

Schroder ISF RMB Fixed Income . . . . . . . . . . . . . . . . . . . . . . . .575

Schroder ISF Securitised Credit * . . . . . . . . . . . . . . . . . . . . . . . . .576

Schroder ISF Strategic Bond * . . . . . . . . . . . . . . . . . . . . . . . . . . .577

Schroder ISF Strategic Credit . . . . . . . . . . . . . . . . . . . . . . . . . . .583

Schroder ISF EURO Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . .588

Schroder ISF US Dollar Liquidity . . . . . . . . . . . . . . . . . . . . . . . . .590

Appendix I - Comparative Statement . . . . . . . . . . . . . . . . . . . . .591

Appendix II - Audited TER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .751

Appendix III - Global exposure and leverage (Unaudited) . . . . .755

Appendix IV - Securities Financing Transactions (Unaudited) . .759

Appendix V Remuneration Disclosures . . . . . . . . . . . . . . . . . .781

Appendix VI Unaudited Collateral Exposure . . . . . . . . . . . . . .782



Schroder International Selection Fund (the Company) organised as a "socit anonyme" is anopen-ended umbrella company incorporated under Luxembourg law, which enablesinvestors to choose from Sub-Funds (specific portfolios of assets and liabilities within theCompany having their own net asset value and represented by a separate class or classes ofshares) offering different investment objectives. The shares of each Sub-Fund are listed on theLuxembourg Stock Exchange. Prices are also available on Bloomberg and Reuters.

This report covers the year from 1 January 2017 to 31 December 2017. The financialstatements are prepared in accordance with Luxembourg regulations relating to undertakingsfor collective investment. The last day on which prices were calculated was 29 December2017, the last working day of the year and 28 December 2017 for Schroder ISF Japan DGFand Schroder ISF Korean Equity. At the date of this report, 116 Sub-Funds were available forinvestment. Please refer to the current prospectus for the investment objectives of the Sub-Funds as well as details of investment restrictions. The monthly factsheets for each Sub-Fundcan be obtained from the Companys registered office and are also available on the website ofSchroder Investment Management (Luxembourg) S.A. (http://www.schroders.lu).

Hereafter, names of the Funds will be preceded by Schroder ISF, e.g. Schroder ISF GlobalEquity Alpha.

Schroders is a FATCA compliant organisation. The FATCA classification of this entity and itsGIIN is as follows: FATCA entity classification: FFI; Sponsoring entity: Schroder InvestmentManagement (Luxembourg) S.A.; Sponsoring entity GIIN: 4RIMT7.00000.SP.442

The Company is subject to corporate governance based on:

1. Its obligations as defined by the UCITS Directive 2009/65/EC dated 13 July 2009, asimplemented in Luxembourg law which is available for inspection at the registered office of theCompany at 5, rue Hhenhof, 1736 Senningerberg, Grand Duchy of Luxembourg.

2. Its articles of incorporation which are available for inspection at the registered office of theCompany and at the Luxembourg corporate and trade register, Registre de Commerce et desSocits (RCSL).

3. Its obligations in respect of the management of the Company, for which the Company hasappointed Schroder Investment Management (Luxembourg) S.A. (the ManagementCompany), which is subject to the requirements of the Management Company Directive2010/43/EC, as implemented in Luxembourg law.

4. The Association of the Luxembourg Fund Industry (ALFI) code of conduct, the principlesof which the Company has voluntarily adopted.

Internal Control and Risk Management Systems

The Board of Directors is responsible for establishing and maintaining adequate internal controland risk management systems of the Company in relation to the financial reporting process.Such systems are designed to manage rather than eliminate the risk of error or fraud inachieving the Company's financial reporting objectives and can only provide reasonable andnot absolute assurance against material misstatement or loss.

The Board of Directors has contracted with the Management Company to put procedures inplace to ensure all relevant accounting records are properly maintained and are readilyavailable, including the production of annual and semi-annual reports. The annual and semi-annual reports of the Company are required to be approved by the Board of Directors of theCompany and filed with the Commission de Surveillance du Secteur Financier (CSSF) and, inthe case of annual reports, with the RCSL.

The annual statutory financial statements are required to be audited by independent auditorswho report to the Board of Directors on their findings.

The Board meets at least four times a year and ensures that the Company maintains highstandards of integrity and control in its operations and that it possesses adequate governanceand means of control as law and regulation demand.

Schroder International Selection Fund

The Company

Corporate Governance

http://www.pwc.lu


Richard Mountford 1

Global Head of ProductSchroder Investment Management Limited31, Gresham Street, London EC2V 7QAUnited Kingdom

Eric Bertrand 2

Head of Schroders GAIAShackleton ResidenceTaXbiex Seafront, XBX 1027 TaXbiexMalta

Mike ChampionHead of Product DevelopmentSchroder Investment Management Limited31, Gresham Street, London EC2V 7QAUnited Kingdom

Marie-Jeanne Chevremont-LorenziniIndependent Director12 rue de la Sapiniere, 8150 BridelGrand Duchy of Luxembourg

Daniel De Fernando GarciaIndependent DirectorSerano 1, 28001 MadridSpain

Bernard HermanIndependent Director11-13, rue de Fischbach, 3372 LeudelangeGrand Duchy of Luxembourg

Achim KuessnerCountry Head Germany, Austria & CEESchroder Investment Management GmbHTaunustor 1 (TaunusTurm), 60310 Frankfurt am MainGermany

Ketil Petersen 3

Country Head Nordic RegionSchroders Denmark Filial af Schroder Investment Management (Luxembourg) S.A.Store Strandstraede 21, 1255 Copenhagen KDenmark

Board of Directors

1 Richard Mountford was appointed Director and Chairman of the Board of Directors on 2 February 2017.2 Eric Bertrand was appointed Director of the Board of Directors on 9 March 2017.3 Ketil Petersen resigned from the Board of Directors on 7 April 2017.

Chairman

Directors


5, rue Hhenhof, 1736 Senningerberg, Grand Duchy of Luxembourg

Schroder Investment Management (Luxembourg) S.A.5, rue Hhenhof, 1736 Senningerberg, Grand Duchy of Luxembourg

J.P. Morgan Bank Luxembourg S.A.European Bank & Business Centre, 6, route de Trves, 2633 Senningerberg,Grand Duchy of Luxembourg

Elvinger Hoss Prussen, socit anonyme2, place Winston Churchill, 1340 Luxembourg, Grand Duchy of Luxembourg

PricewaterhouseCoopers, Socit cooprative2 rue Gerhard Mercator, 2182 Luxembourg, Grand Duchy of Luxembourg

Schroder Investment Management Limited31, Gresham Street, London EC2V 7QA, United KingdomSchroder ISF Asia Pacific Cities Real EstateSchroder ISF Asian Dividend MaximiserSchroder ISF BRIC (Brazil, Russia, India, China)Schroder ISF Emerging EuropeSchroder ISF Emerging MarketsSchroder ISF Emerging Markets Debt Absolute ReturnSchroder ISF Emerging Markets Equity Alpha*Schroder ISF Emerging Multi-Asset Income*Schroder ISF EURO BondSchroder ISF EURO Corporate BondSchroder ISF EURO Credit Absolute ReturnSchroder ISF EURO Credit ConvictionSchroder ISF EURO EquitySchroder ISF EURO Government BondSchroder ISF EURO High YieldSchroder ISF EURO LiquiditySchroder ISF EURO Short Term BondSchroder ISF European Alpha Absolute ReturnSchroder ISF European Alpha FocusSchroder ISF European Dividend MaximiserSchroder ISF European Equity (Ex UK)Schroder ISF European Equity Absolute ReturnSchroder ISF European Equity YieldSchroder ISF European Large CapSchroder ISF European OpportunitiesSchroder ISF European Smaller CompaniesSchroder ISF European Special SituationsSchroder ISF European Total ReturnSchroder ISF European ValueSchroder ISF Frontier Markets EquitySchroder ISF Global BondSchroder ISF Global Cities Real EstateSchroder ISF Global Climate Change EquitySchroder ISF Global Credit IncomeSchroder ISF Global Credit Value*Schroder ISF Global Diversified GrowthSchroder ISF Global Dividend MaximiserSchroder ISF Global Emerging Market OpportunitiesSchroder ISF Global Emerging Markets Smaller CompaniesSchroder ISF Global EnergySchroder ISF Global EquitySchroder ISF Global Equity AlphaSchroder ISF Global Equity YieldSchroder ISF Global GoldSchroder ISF Global Inflation Linked BondSchroder ISF Global Multi CreditSchroder ISF Global Multi-Asset FlexibleSchroder ISF Global Multi-Asset IncomeSchroder ISF Global RecoverySchroder ISF Global Smaller CompaniesSchroder ISF Global Sustainable Growth*Schroder ISF Global Unconstrained Bond

Administration


Registered Office

Management Company, DomiciliaryAgent, Principal Paying Agent,Registrar and Transfer Agent

Custodian and Fund Administrator

Principal Legal Adviser

Auditor

Investment Managers


Schroder Investment Management Limited (cont)31, Gresham Street, London EC2V 7QA, United KingdomSchroder ISF Italian EquitySchroder ISF Latin AmericanSchroder ISF Middle EastSchroder ISF Multi-Asset PIR Italia*Schroder ISF Multi-Asset Strategies*Schroder ISF Multi-Asset Total ReturnSchroder ISF Multi-Manager DiversitySchroder ISF QEP Global AbsoluteSchroder ISF QEP Global Active ValueSchroder ISF QEP Global BlendSchroder ISF QEP Global CoreSchroder ISF QEP Global Emerging MarketsSchroder ISF QEP Global ESGSchroder ISF QEP Global QualitySchroder ISF QEP Global Value PlusSchroder ISF Strategic Beta*Schroder ISF Strategic Bond*Schroder ISF Strategic CreditSchroder ISF UK EquitySchroder ISF UK OpportunitiesSchroder ISF Wealth Preservation

Schroder Investment Management Australia LimitedLevel 20 Angel Place, 123 Pitt Street, Sydney NSW 2000, Australia

Schroder ISF Global Target Return

Schroder Investment Management (Hong Kong) LimitedLevel 33, Two Pacific Place, 88 Queensway, Hong KongSchroder ISF Asia Pacific ex-Japan Equity*Schroder ISF China A*Schroder ISF China OpportunitiesSchroder ISF Emerging AsiaSchroder ISF Greater ChinaSchroder ISF Hong Kong Dollar BondSchroder ISF Hong Kong EquitySchroder ISF Japan DGFSchroder ISF RMB Fixed IncomeSchroder ISF Taiwanese Equity

Schroder Investment Management (Japan) Limited21st Floor Marunouchi Trust Tower Main, 1-8-3 Marunouchi, Chiyoda-Ku, Tokyo 100-0005,JapanSchroder ISF Japanese EquitySchroder ISF Japanese OpportunitiesSchroder ISF Japanese Smaller Companies

Schroder Investment Management North America Inc.7 Bryant Park, New York, New York 10018-3706, United States of AmericaSchroder ISF Emerging Market BondSchroder ISF Global Corporate BondSchroder ISF Global Credit Duration HedgedSchroder ISF Global High Income BondSchroder ISF Global High YieldSchroder ISF Securitised Credit*Schroder ISF US Dollar BondSchroder ISF US Dollar LiquiditySchroder ISF US Large CapSchroder ISF US Small & Mid Cap EquitySchroder ISF US Smaller Companies

Schroder Investment Management (Singapore) Limited138 Market Street #23-01, CapitaGreen, Singapore 048946, SingaporeSchroder ISF Asian Bond Absolute Return*Schroder ISF Asian Equity YieldSchroder ISF Asian Local Currency BondSchroder ISF Asian Opportunities

Administration (cont)


Investment Managers (cont)


Schroder Investment Management (Singapore) Limited (cont)Schroder ISF Asian Smaller CompaniesSchroder ISF Asian Total ReturnSchroder ISF Emerging Market Corporate BondSchroder ISF Indian EquitySchroder ISF Indian OpportunitiesSchroder ISF Korean Equity

Schroder Investment Management (Switzerland) AGCentral 2, 8021 Zurich, SwitzerlandSchroder ISF Asian Convertible BondSchroder ISF Global Conservative Convertible BondSchroder ISF Global Convertible BondSchroder ISF Global Multi-Asset BalancedSchroder ISF Global Multi-Asset ConservativeSchroder ISF Swiss EquitySchroder ISF Swiss Equity OpportunitiesSchroder ISF Swiss Small & Mid Cap Equity

Administration (cont)

Investment Managers (cont)

Introduction

The directors of the Company submit their report and the unaudited financial statements for the year ended 31 December 2017.

Activities during the year

On 31 December 2017, the total net assets of the Company were EUR 103,619,780,532 compared to EUR 90,435,536,972 on 31 December2016, representing an increase of 14.58%.

1. New Sub-FundsDuring the year under review, 6 new Sub-Funds were made available for investment within the Company:

18 January 2017 Schroder ISF Global Credit Value6 September 2017 Schroder ISF Securitised Credit6 December 2017 Schroder ISF China A11 December 2017 Schroder ISF Emerging Markets Equity Alpha13 December 2017 Schroder ISF Asia Pacific ex-Japan Equity

Schroder ISF Multi-Asset PIR Italia

2. New share classesIn addition to the 46 share classes launched in new Sub-Funds on launch dates, the following share classes were also made available during theyear under review:

1 March 2017 Schroder ISF QEP Global Absolute C Acc CHF Hedged22 March 2017 Schroder ISF European Alpha Focus E Acc, E & Z Acc GBP29 March 2017 Schroder ISF European Dividend Maximiser I Dis

Schroder ISF Global Dividend Maximiser I Dis5 April 2017 Schroder ISF QEP Global Emerging Markets C Acc EUR Hedged12 April 2017 Schroder ISF Global High Yield C Dis31 May 2017 Schroder ISF Global Multi Credit IZ Acc EUR Hedged

Schroder ISF US Small & Mid-Cap Equity IZ Acc EUR14 June 2017 Schroder ISF Japanese Equity C Acc USD3 July 2017 Schroder ISF Global Diversified Growth IA & IC Acc and IA Acc GBP Hedged

Schroder ISF QEP Global Core IA Dis19 July 2017 Schroder ISF European Alpha Absolute Return C Acc CHF Hedged2 August 2017 Schroder ISF Emerging Multi-Asset Income AX Dis AUD & SGD Hedged

Schroder ISF Global Multi Credit A Acc NOK & SEK Hedged9 August 2017 Schroder ISF EURO Credit Absolute Return A & C Acc CHF Hedged

Schroder ISF European Alpha Absolute Return C Dis & C Dis USD HedgedSchroder ISF QEP Global Core C Acc AUD Hedged

27 September 2017 Schroder ISF Global Credit Income C Acc EURSchroder ISF Securitised Credit E Acc

25 October 2017 Schroder ISF Global Credit Income C Acc EUR Hedged28 November 2017 Schroder ISF Asian Dividend Maximiser C Dis EUR Hedged

Schroder ISF Emerging Markets C Acc EUR HedgedSchroder ISF Emerging Market Bond C Acc SEK HedgedSchroder ISF Emerging Markets Debt Absolute Return C Acc SEK HedgedSchroder ISF Emerging Multi-Asset Income A Dis HKDSchroder ISF EURO Equity CN AccSchroder ISF Global Convertible Bond Z Acc and Z Acc & Z Dis EUR HedgedSchroder ISF Global Climate Change Equity Z AccSchroder ISF Global Dividend Maximiser CX DisSchroder ISF Japanese Smaller Companies A Acc EUR

30 November 2017 Schroder ISF Global Dividend Maximiser C Acc & C Dis EUR HedgedSchroder ISF Global Multi-Asset Balanced C Dis & C Acc SEK HedgedSchroder ISF Global High Yield C Acc & C Dis EUR and A Acc NOK HedgedSchroder ISF Global Multi-Asset Income C Acc SEK Hedged

4 December 2017 Schroder ISF Global Diversified Growth IB AccSchroder ISF Global Multi Credit C Acc SEK HedgedSchroder ISF Greater China C Acc EURSchroder ISF Japanese Equity Z Acc & DisSchroder ISF Strategic Bond C Dis EUR Hedged & C Acc SEK HedgedSchroder ISF UK Equity CN Acc EUR HedgedSchroder ISF US Large Cap CN Acc EUR HedgedSchroder ISF Securitised Credit A1 Acc

15 December 2017 Schroder ISF China Opportunities IZ Dis EUR HedgedSchroder ISF EURO High Yield AX Dis USD HedgedSchroder ISF Global Credit Income A Acc and A & C Acc CHF Hedged

Page 14 Schroder International Selection Fund Audited Annual Report 31 December 2017

Directors Report

Activities during the year (cont)15 December 2017 (cont) Schroder ISF Global High Yield I Acc CHF Hedged

Schroder ISF Global Multi Credit A Acc & C Acc CHF HedgedSchroder ISF Global Multi-Asset Flexible A Dis EUR Hedged

3. Sub-Fund liquidationDuring the year under review, one Sub-Fund was liquidated:28 February 2017 Schroder ISF Emerging Market Local Currency Bond

4. Classes liquidationsIn addition to the 16 share classes liquidated in liquidated Sub-Fund on liquidation date, the following share classes were also liquidated during theyear under review:16 March 2017 Schroder ISF Global Corporate Bond I Acc USD Duration Hedged4 July 2017 Schroder ISF QEP Global Emerging Markets C Acc EUR Hedged7 September 2017 Schroder ISF European Total Return Z Acc & Dis and Z Acc GBP Hedged29 September 2017 Schroder ISF QEP Global Quality C Dis SEK Hedged13 November 2017 Schroder ISF Global Bond I Acc CHF Hedged

5. Hard closureDuring the year under review, following share classes were hard closed:3 July 2017 Schroder ISF QEP Global Emerging Markets C Acc EUR Hedged3 October 2017 Schroder ISF QEP Global Active Value A Acc, B Acc, C Acc & I Acc EUR Hedged

Additionally the following class was hard closed to new investors:31 July 2017 Schroder ISF EURO Corporate Bond Duration Hedged

6. Sub-Fund name changeDuring the year under review, the following Sub-Funds changed their names:1 September 2017 Schroder ISF Global Tactical Asset Allocation changed its name to Schroder ISF Multi-Asset Strategies

Schroder ISF Strategic Beta 10 changed its name to Schroder ISF Strategic Beta2 November 2017 Schroder ISF Global Demographic Opportunities changed its name to Schroder ISF Global Sustainable Growth

Furthermore, the following changes took effect during the year:

1 January 2017Transfer agent fees reduction for Schroder ISF Emerging Asia IZ Acc class from 0.20% to 0.02%.Transfer agent fees reduction for Schroder ISF EURO Bond IZ Acc and IZ Dis classes from 0.05% to 0.02%.Transfer agent fees reduction for Schroder ISF EURO Credit Absolute Return IZ Acc class from 0.10% to 0.02%.Transfer agent fees reduction for Schroder ISF Global Climate Change Equity IZ Acc GBP class from 0.20% to 0.02%.Transfer agent fees reduction for Schroder ISF Global Equity Alpha IZ Acc class from 0.20% to 0.02%.Transfer agent fees reduction for Schroder ISF QEP Global Emerging Markets IZ Dis EUR class from 0.20% to 0.02%.Management Fees increase for Schroder ISF Asian Bond Absolute Return Z Acc, Z Dis, Z Acc EUR, Z Dis EUR, Z Dis HKD, Z Acc EUR Hedged, ZDis EUR Hedged, Z Dis GBP Hedged and Z Acc SGD Hedged classes from 0.6045% to 0.6250%.Management Fees increase for Schroder ISF Asian Local Currency Bond Z Acc, Z Dis, Z Acc EUR, Z Dis EUR Hedged and Z Acc SGD Hedgedclasses from 0.4720% to 0.50%.Management Fees decrease for Schroder ISF EURO Bond IZ Acc and IZ Dis classes from 0.50% to 0.375%.Schroder ISF Asian Bond Absolute Return A Dis, A1 Dis, Z Dis, A1 Dis EUR, Z Dis EUR, A1 Dis EUR Hedged, Z Dis EUR Hedged, A Dis HKD and ZDis HKD classes changed the distribution policies from fixed 4% per year paid monthly to monthly variable.Schroder ISF Emerging Multi-Asset Income A Dis, A1 Dis, C Dis, I Dis, A Dis SGD Hedged classes changed the distribution policies from monthlyvariable to fixed 5% per year paid monthly and A Dis AUD Hedged classes changed the distribution policies from monthly variable to fixed 5% peryear paid monthly plus currency premium.Schroder ISF Strategic Bond A Dis, J Dis classes changed the distribution policies from fixed 3% per year paid monthly to monthly variable and ADis EUR Hedged, A1 Dis EUR Hedged, B Dis EUR Hedged classes changed the distribution policies from fixed 3% per year paid quaterly toquarterly variable.

Page 15Schroder International Selection Fund Audited Annual Report 31 December 2017

Directors Report (cont)

Activities during the year (cont)

26 January 2017Schroder ISF Emerging Multi-Asset Income distribution policy changed from monthly variable to month fix at 5%.Schroder ISF Strategic Bond and Asian Bond Absolute Return distribution policy change from fixed to variable.

1 March 2017Management Fees decrease for Schroder ISF European Equity Absolute Return R Acc, R Acc USD Hedged and R Acc GBP Hedged classes from1% to 0.75%.Transfer agent fees reduction for Schroder ISF US Dollar Bond A Dis GBP Hedged class from 0.25% to 0.10%.

27 April 2017Schroder ISF Global Multi-Asset Income J Dis class changed from fixed distributions of 12% per annum to 5% per annum.

1 September 2017Management fees reduction for Schroder ISF Emerging Markets C Acc & C Dis, C Acc AUD, C Acc EUR from 1.00% to 0.75%Management fees reduction for Schroder ISF European Alpha Focus C Acc from 1.00% to 0.75%Management fees reduction for Schroder ISF European Dividend Maximiser C Acc & C Dis from 1.00% to 0.75%Management fees reduction for Schroder ISF European Equity Yield C Acc & C Dis from 1.00% to 0.75%Management fees reduction for Schroder ISF Global Dividend Maximiser C Acc & C Dis and C Dis GBP from 1.00% to 0.75%Management fees reduction for Schroder ISF Global Equity Yield C Acc & C Dis and C Acc EUR from 1.00% to 0.75%Management fees reduction for Schroder ISF Swiss Equity Opportunities C Acc from 1.00% to 0.75%Management fees reduction for Schroder ISF Global Equity C Acc & C Dis from 0.75% to 0.45%Management fees reduction for Schroder ISF Global Equity Alpha C Acc & C Dis and C Acc EUR from 1.00% to 0.65%Transfer agent fees reduction for Schroder ISF Global Equity C Acc & C Dis from 0.20% to 0.10%Transfer agent fees reduction for Schroder ISF Global Equity Alpha C Acc & C Dis and C Acc EUR from 0.20% to 0.10%Transfer agent fees reduction for Schroder ISF Global Demographic Opportunities C Acc and C Acc EUR Hedged from 0.20% to 0.10%Transfer agent fees reduction for Schroder ISF QEP Global Active Value C Acc & C Dis, C Acc EUR and C Acc EUR Hedged from 0.20% to 0.10%Transfer agent fees reduction for Schroder ISF QEP Global Blend C Acc and C Acc EUR from 0.20% to 0.10%Transfer agent fees reduction for Schroder ISF QEP Global Core C Acc & C Dis and C Acc AUD Hedged from 0.12% to 0.05%Transfer agent fees reduction for Schroder ISF QEP Global Quality C Acc & C Dis, C Acc EUR, C Acc NOK and C Acc & C Dis SEK Hedged from0.20% to 0.10%Transfer agent fees reduction for Schroder ISF QEP Global Value Plus C Acc, C Acc EUR and C Acc & C Dis GBP from 0.20% to 0.10%Management fees reduction for Schroder ISF Global Equity Alpha IZ Acc from 0.75% to 0.65%Schroder ISF RMB Fixed Income changed its policy to include flexibility to invest up to 30% in high yield.Schroder ISF Strategic Beta changed its target volatility from 10% to 8%

2 November 2017Management fees reduction for Schroder ISF Global Sustainable Growth C Acc and C Acc EUR Hedged from 1.00% to 0.65%Management fees reduction for Schroder ISF Global Sustainable Growth A Acc and A Acc & A Dis EUR Hedged from 1.50% to 1.30%Management fees reduction for Schroder ISF Global Sustainable Growth Z Acc EUR Hedged from 0.75% to 0.65%

1 December 2017C share classes minimum susbcription and holding amounts changed from USD 500,000 to USD 1,000.

The Board of DirectorsSchroder International Selection Fund31 December 2017

The information contained in this report is historical and not necessarily indicative of future performance.


Directors Report (cont)

Economic review

2017 was full of political noise but investors worst fears were generally not realised. The global economy continued its synchronised expansion andinflation largely remained benign. In the US, monetary policy continued to be tightened gradually while some other developed market central banksbegan the process of normalisation.

The key event in early 2017 was the inauguration of Donald Trump as the 45th president of the United States. Market focus turned to the legislativeagenda, and particularly the prospects for tax reforms. Towards the end of spring, Trumps efforts to repeal and replace the Affordable Care Act(ACA) were voted down. This raised questions over whether he would be able to push through his fiscal package. It was not until the end of theyear that House and Senate Republicans agreed the long-awaited tax reform bill. US companies will see their headline income tax rate plunge from35% to 21%. The Federal Reserve (Fed) raised interest rates three times during 2017 amid strong employment data, although inflation continued toundershoot targets. The Fed flagged further hikes for 2018, when Jay Powell is set to take over as chair.

In Europe, as the year began there were worries that 2017 could be the year populists took control of the monetary union, with general elections inmany major member states. The first hurdle was the Dutch general election, where the far right was defeated by moderates. France was seen asthe bigger risk but Emmanuel Macron finished first in the multi-party contest, before going on to convincingly defeating far-right candidate Marine LePen to become president. Meanwhile, the eurozones economic momentum continued to improve, with inflation picking up and unemploymentfalling. The European Central Bank (ECB) kept quantitative easing (QE) going, but tapered its purchases during the year, and announced a furthertapering and extension for 2018. Political uncertainty re-emerged in the autumn. The German election produced a stalemate, as anticipated, but thefirst effort at forming a coalition broke down.

In the UK, Prime Minister Theresa May called a snap election in order to strengthen her political base, but also extend her term in office. However,her party lost its majority in the House of Commons. Higher inflation, partly a result of weaker sterling, saw the Bank of England raise interest ratesfor the first time in a decade. Brexit remained the prime focus. The UK and European Union agreed on a joint progress report on citizens rights,Northern Ireland, and the divorce bill. This progress report suggested a softer stance on Brexit from the UK, which helped the pound to recoversome of its losses through the year.

In Japan, Prime Minister Shinzo Abe called and won a snap election in order to secure a new mandate for two important policy proposals. The firstwas to reinvest the proceeds from the 2019 increase in VAT, rather than reducing the public deficit. The second was to change Japans constitutionto allow its military to take a more active stance. This was in response to the growing threat from North Korea. The Bank of Japan did not changeits policies on QE or yield curve control, though it was able to reduce its monthly purchases.

Political risk came to the fore in emerging markets. In South Africa, President Zuma fired his respected finance minister Pravin Gordhan as part of alarger reshuffle that purged many of his critics. Corruption resurfaced in Brazil, with allegations against President Temer prompting fears ofimpeachment and an end to efforts to reform the stricken economy. In India, the introduction of the new Goods and Services Tax proved highlydisruptive, damaging economic growth which came in below 6% for a second consecutive quarter. The policy should ultimately prove beneficial, butit has been executed less efficiently than might have been hoped.

The 19th National Congress of the Communist Party of China cemented President Xi Jinpings position as one of the most powerful Chinese leadersin modern history. Chinese monetary policy was somewhat tight for most of 2017, though conducted more through regulation of the financialsystem rather than changes to policy rates, which have been stable. Elsewhere in emerging markets, most central banks enjoyed disinflation lastyear, providing scope for cuts, particularly in Brazil and Russia.

Equity market review

Against the backdrop of synchronised global growth, global equities posted strong positive returns for the year. The MSCI World index returned22.4% 1. Information technology was the best performing global sector, followed by other sectors that benefited most from the improved economicbackdrop, including industrials, consumer discretionary and materials. The laggards were energy, amid a subdued oil price for much of the year,and telecommunications.

At the regional level, US equities were strong, returning 21.1% 2, again led by the information technology sector. Eurozone stockmarkets were moremuted due to a stronger currency with the MSCI EMU index returning 12.5% 3. The UKs FTSE All-Shares returned 13.1% 4 in sterling with basicmaterials and information technology leading gains while utilities underperformed. Japans Topix registered a strong advance, returning 22.2% 5.

Emerging markets delivered robust returns and outperformed their developed market peers. In particular, the Asia ex Japan region saw very stronggains, with a return over 41.7% 6 for the year. The region is a key beneficiary of improving global growth and a more positive outlook for trade. Chinawas the best-performing regional market.


Investment Managers Report

1 FactSet, MSCI World TR Net in USD.2 FactSet, S&P 500 TR Net in USD.3 FactSet, MSCI EMU TR Net in EUR.4 FactSet, FTSE All-Share TR in GBP.5 FactSet, Topix TR in JPY.6 FactSet, MSCI AC Asia ex JP TR Net in USD.

Bond market review

US 10-year Treasuries ended 2017 yielding 2.41%, little changed from 2.43% at the end of 2016. The final months of 2017 were notable for aflattening of the US Treasury curve, amid growing momentum behind the tax reform bill. Yield curve flattening means that the difference betweenshort-dated and longer-dated US Treasury yields has narrowed. This reaction from the bond market seemed to reflect the expectation that highergrowth and inflation could precipitate faster rate hikes from the Fed.

European political risk at the start of the year caused yields to rise and prices to fall in France and Italy ahead of the French presidential election. Therisk of a Le Pen victory posed a threat to the survival of the monetary union, and therefore the Italian governments solvency, given the help it isreceiving from ECB QE. As the French electoral risk subsided, those two markets rebounded strongly, and ended the year as the two bestperforming in the region.

Investment grade bonds returned 5.2% 7 over the year but high yield debt was stronger, returning 7.6% 8. Insurance was the best performing sectorin both indices.

Outlook

Schroders economists have upgraded their global growth forecast for 2018 to 3.3% from a previous estimate of 3.0%. This marks a modestacceleration from 2017, which was also upgraded to 3.2% from 3%. If correct, this would make 2018 the strongest year for global growth since2011 when the world economy bounced back from the global financial crisis.

The global growth upgrade for 2018 is reflected across advanced and emerging economies. In the former, the US forecast for 2018 is lifted from2% to 2.5% and the eurozone projection from 2% to 2.3%. The US upgrade is driven by looser fiscal policy given the approval of tax cuts byCongress. Japan is forecast at 1.8% (previously 1.5%) and emerging market growth is raised to 4.9% from 4.8%. The latter incorporates a slightlystronger figure for China in 2018 at 6.4%.

Meanwhile, the economics team forecasts inflation at 2.3% in 2018 (revised up from 2.2%); an outcome reinforced by higher oil and commodityprices and reflected in the pick-up in producer price inflation around the world in recent months. This assumes a gradual pick-up in US core inflationback to 2% in 2018 after the surprising declines seen in the earlier part of 2017.

In terms of monetary policy, the outlook supports a further tightening of monetary policy by the Fed. With fiscal policy providing an extra boost togrowth, three rate hikes are anticipated this year. The Fed funds rate is forecast to end 2018 at 2.25%. One more rate rise is forecast in 2019,taking the policy rate to 2.5%.

Elsewhere, the economist team forecasts a tighter projection for the ECB in that QE is assumed to end in September 2018. In Japan, the currentpolicy of yield curve control looks set to continue.


Investment Managers Report (cont)

7 Bloomberg, BofAML Global Corporate index in local currency.8 Bloomberg, BofAML Global High Yield index in local currency.

The Company

The Company was incorporated in Luxembourg on 5 December 1968 as a socit anonyme. Pursuant to an Extraordinary General Meeting ofShareholders held on 31 January 1989, the form and name of the Company, as well as its establishment period, was changed to a socitdinvestissement capital variable (SICAV) established for an unlimited period under the name of Schroder International Selection Fund. Thecompany qualifies as an undertaking for collective investment (UCI) regulated by the provisions of Part I of the Luxembourg Law of 17 December2010, as amended, regarding undertaking for collective investment (the 2010 law).

Classes of Shares

At the date of this report, twenty two classes of shares are available within the Funds: A, A1, AX, B, C, CN*, CX, D, E, F, I, IA*, IB*, IC*, IZ, J, R, S,X, X1, Y and Z shares.All Funds offer A, B and C shares, apart from the following Funds:

Schroder ISF Asia Pacific ex-Japan Equity* (offers only A, C, I & IZ);Schroder ISF China A* (offers only A, C, E & I);Schroder ISF Emerging Markets Equity Alpha* (offers only A, C & I);Schroder ISF European Alpha Focus (offers only A, C, E, I & Z);Schroder ISF European Equity (ex UK) (offers only A, C & S);Schroder ISF Global Conservative Convertible Bond (offers only A, C, E, I & IZ);Schroder ISF Global Credit Value* (offers only C, E & I);Schroder ISF Global Gold (offers only A, A1, C & I shares);Schroder ISF Global Multi-Asset Conservative (offers only A, A1,C & I);Schroder ISF Global Sustainable Growth* (offers only A, C & Z shares);Schroder ISF Global Target Return (offers only A, C & I)Schroder ISF Hong Kong Dollar Bond (offers only A, A1, C & I shares);Schroder ISF Indian Opportunities (offers only A, A1,C, E & I);Schroder ISF Japan DGF (offers only C, I & X shares);Schroder ISF Japanese Opportunities (offers only A, A1, C & I);Schroder ISF Multi-Asset Strategies* (offers only C & I)Schroder ISF Multi-Asset Total Return (offers only A, C & I)Schroder ISF Multi-Manager Diversity (offers only A, C & S);Schroder ISF QEP Global Blend (offers only A, C, I & S);Schroder ISF QEP Global Core (offers only C, I, IA, X & X1 shares);Schroder ISF QEP Global Emerging Markets (offers only A, A1, C, I, IZ & Z);Schroder ISF QEP Global ESG (offers only A, C I, IZ & S);Schroder ISF QEP Global Value Plus (offers only A, C & I);Schroder ISF RMB Fixed Income (offers only A, C, E & I);Schroder ISF Securitised Credit* (offers only A, A1, C, E, I & IZ)Schroder ISF Strategic Beta* (offers only A, C & I)Schroder ISF UK Opportunities (offers only A, C & S);

Shares are generally issued as Accumulation shares. Distribution shares may be issued within any Fund at the Directors discretion. A list of availableDistribution shares may be obtained upon request at the Management Company.

In accordance with the provisions of the current prospectus, the Directors may also offer classes in multiple currency denominations. The respectiveInvestment Managers have the ability to hedge the shares of such classes in relation to the Fund currency or in relation to currencies in which therelevant Fund's underlying assets are denominated. Where hedging of this kind is undertaken, the respective Investment Managers may engage, forthe exclusive account of such share class, in currency forwards, currency futures, currency option transactions and swaps in order to preserve thevalue of the reference currency against the Fund currency. Where undertaken, the effects of this hedging will be reflected in the Net Asset Valueand, therefore, in the performance of such additional share class. Similarly, any expenses arising from such hedging transactions will be borne bythe class in relation to which they have been incurred. The classes of share available for each Fund are set out in detail in the current prospectus.The Directors may decide from time to time for some or all of the Bond Funds to issue duration hedged share classes. Duration hedged shareclasses utilise hedging strategies that seek to reduce the share class' sensitivity to changes in interest rate movements. There is no assurance thatthese hedging strategies will be successful. Where undertaken, the effects of this hedging will be reflected in the Net Asset Value and, therefore, inthe performance of the share class. Similarly, any expenses arising from such hedging transactions will be borne by the duration hedged shareclass. The performance of the duration hedged share classes may underperform other share classes in the Bond Funds depending on interest ratemovements. Duration hedged share classes can be issued in relation to any type of available share classes of Bond Funds.

The naming convention used for the share classes is as follows:A Acc for base currency share class;A Acc CCY for a multicurrency share class;A Acc CCY Hedged for a hedged share class.

Initial Charge

The Management Company and Distributors are entitled to the following initial charges, which can be partly or fully waived at the Directorsdiscretion.

* Please refer to the Directors Report for the details of all corporate actions that occurred during the year under review.


Notes to the Financial Statementsas at 31 December 2017

Initial Charge (cont)

A and AX Shares

Equity Funds Initial charge of up to 5.26315% of the Net Asset Value per Share

Multi-Asset Funds Initial charge of up to 5.26315% of the Net Asset Value per Share with the exception of:

up to 4.16667% of the Net Asset Value per Share of Schroder ISF Global Multi-Asset Balanced, Schroder ISFGlobal Multi-Asset Flexible, Schroder ISF Global Target Return, Schroder ISF Multi-Asset PIR Italia, Schroder ISFMulti-Asset Total Return and Schroder ISF Wealth Preservation

up to 3.09278% of the Net Asset Value per Share of Schroder ISF Global Multi-Asset Conservative and SchroderISF Strategic Beta

Multi-Manager Funds Initial charge of up to 4.16667% of the Net Asset Value per Share

Absolute Return Funds and Bond Funds Initial charge of up to 3.09278% of the Net Asset Value per Share

Liquidity Funds No initial charge

F and CN Shares


A1 Shares


Multi-Asset Funds Initial charge of up to 4.16667% of the Net Asset Value per Share with the exception of:

up to 3.09278% of the Net Asset Value per Share of Schroder ISF Global Multi-Asset Balanced, Schroder ISFGlobal Multi-Asset Flexible and Schroder ISF Wealth Preservation

up to 2.04081% of the Net Asset Value per Share of Schroder ISF Global Multi-Asset Conservative

Absolute Return Funds and Bond Funds Initial charge of up to 2.04081%of the Net Asset Value per Share


C, CX and E Shares Initial charge of up to 1.0101% of the Net Asset Value per Share


B, D, I, IA, IB, IC, IZ, J, R , S , X, X1, Y and Z Shares No initial charge

Distribution Charge

A, AX , C, CN, CX, E, F, I, IA, IB, IC, IZ, J, R , S , X, X1, Y and ZShares * No distribution charge

B Shares **

Equity Funds Distribution charge of 0.60% per annum of the net assets of Funds

Absolute Return Funds Distribution charge of 0.50% per annum of the net assets of Funds with the exception of:

0.30% per annum of the net assets of Schroder ISF EURO Credit Absolute Return and Schroder ISF QEP GlobalAbsolute

Bond Funds Distribution charge of 0.50% per annum of the net assets of Funds with the exception of:

0.10% per annum of the net assets of Schroder ISF EURO Short Term Bond

0.30% per annum of the net assets of Schroder ISF Global Multi Credit

Liquidity Funds No distribution charge

Multi-Asset Funds Distribution charge of 0.60% per annum of the net assets of Funds with the exception of:

0.50% per annum of the net assets of Fund Schroder ISF Wealth Preservation

D Shares *** Distribution charge of 1.00% per annum of the net assets of Funds

A1 Shares *** Distribution charge of 0.50% per annum of the net assets of Funds

Liquidity Funds No distribution charge


Notes to the Financial Statementsas at 31 December 2017 (cont)

* Please refer to the Directors Report for details of all corporate actions that occurred during the year under review.** Distribution charges in respect of B shares are payable quarterly.*** Distribution charges in respect of A1 and D shares are paid at such intervals, as may be agreed upon from time to time between the Company and those Distributors that are appointed specifically for the

purpose of distributing such shares.

Minimum Subscription Amount, Minimum Additional Subscription Amount and Minimum Holding Amount

In accordance with the provisions of the current prospectus, minimum amounts for subscription, additional subscription and holding are as follows:

A, A1, AX, B, C, CN, CX, D, F and Y Shares The minimum initial subscription, additional subscription and holding amount is EUR 1,000 or USD 1,000 or their near equivalent in anyother freely convertible currency. **

E Shares The minimum initial subscription and holding amount is EUR 500,000 or USD 500,000 or their near equivalent in any other freelyconvertible currency. The minimum additional subscription amount is EUR 250,000 or USD 250,000 or their near equivalent in any otherfreely convertible currency. **

E Shares will only be available, with prior agreement of the Management Company.

I and J Shares The minimum initial subscription and holding amount is EUR 5,000,000 or USD 5,000,000 or their near equivalent in any other freelyconvertible currency. The minimum additional subscription amount is EUR 2,500,000 or USD 2,500,000 or their near equivalent in anyother freely convertible currency. **

I shares will only be offered to investors who, at the time the relevant subscription order is received, are clients of Schroders with anagreement covering the charging structure relevant to the clients investments in such shares and who are Institutional Investors.J Shares will only be offered to and can only be acquired by Japanese Fund of Funds, which are Institutional Investors.

IA Shares The minimum initial subscription and holding amount is EUR 250,000,000 or USD 250,000,000 or their near equivalent in any other freelyconvertible currency. The minimum additional subscription amount is EUR 20,000,000 or USD 20,000,000 or their near equivalent in anyother freely convertible currency. **

IB Shares The minimum initial subscription and holding amount is EUR 300,000,000 or their near equivalent in any other freely convertible currency.The minimum additional subscription amount is EUR 20,000,000 or their near equivalent in any other freely convertible currency. **

IC Shares The minimum initial subscription and holding amount is EUR 350,000,000 or their near equivalent in any other freely convertible currency.The minimum additional subscription amount is EUR 20,000,000 or their near equivalent in any other freely convertible currency. **

IZ & Z Shares The minimum initial subscription and holding amount is EUR 100,000,000 or USD 100,000,000 or their near equivalent in any other freelyconvertible currency. The minimum additional subscription amount is EUR 20,000,000 or USD 20,000,000 or their near equivalent in anyother freely convertible currency. **

IZ Shares will only be offered to and can only be acquired by Institutional Investors, with prior agreement of the Management Company.Z Shares will be offered in limited circumstances to professional investors for distribution in certain countries and through certainDistributors, with the prior agreement of the Management Company.

X Shares The minimum initial subscription and holding amount is EUR 25,000,000 or their near equivalent in any other freely convertible currency.The minimum additional subscription amount is EUR 12,500,000 or their near equivalent in any other freely convertible currency. **

X shares will only be available, with prior agreement of the Management Company, to institutional investors, as may be defined from timeto time by the guidelines or recommendations issued by the Luxembourg supervisory authority.

X1 Shares The minimum initial subscription and holding amount is EUR 22,500,000 or their near equivalent in any other freely convertible currency.The minimum additional subscription amount is EUR 12,500,000 or their near equivalent in any other freely convertible currency. **

X1 shares will only be available, with prior agreement of the Management Company, to institutional investors, as may be defined fromtime to time by the guidelines or recommendations issued by the Luxembourg supervisory authority.

R and S Shares There are no minimum subscription or holding amounts.

Further details on specific features of the different classes of shares and the conditions under which initial and distribution fees are calculated can befound in the current prospectus.

Net Asset Value

Calculation of Net Asset Value per Share

The Net Asset Value per share of each class is calculated on each Dealing Day in the currency of the relevant class. It is calculated by dividing theNet Asset Value attributable to each class, being the proportionate value of its assets less its liabilities, by the number of shares of such class then inissue. The resulting sum is rounded to the nearest four decimal places*. Further details on rules that apply in valuing total assets can be found in thecurrent prospectus.

Valuation of the Assets of the Company

The value of securities, financial derivative instruments and assets is determined on the basis of the last available price on the stock exchange or anyother regulated market on which those securities or assets are traded or admitted for trading. Where such securities or other assets are quoted ordealt in on more than one stock exchange or any other regulated market, the Directors shall make regulations for the order of priority in which stockexchanges or other regulated markets shall be used for the provision of prices of securities or other assets.If a security is not traded on or admitted to any official stock exchange or any other regulated market or, in the case of securities so traded oradmitted, the last available price does not reflect their true value, the Directors are required to proceed on the basis of their expected sales price,which shall be valued with prudence and in good faith.

Liquid assets and money market instruments are usually valued on an amortised cost basis.

Financial derivative instruments, which are not listed on any official stock exchange or any other regulated market, are valued in accordance withmarket practice. The swaps are valued at their fair value based on the underlying securities (at close of business or intraday) as well as on thecharacteristics of the underlying commitments.




** These minima may be waived from time to time at the discretion of the Directors.

Net Asset Value (cont)

Valuation of the Assets of the Company (cont)

Units or shares in undertakings for collective investments are valued on the basis of their last available net asset value.

The value of any cash in hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses, cash dividends and interestdeclared or accrued as aforesaid and not yet received shall be deemed to be the full amount thereof, unless in any case the same is unlikely to bepaid or received in full, in which case the value thereof shall be arrived at after making such discount as the Company may consider appropriate insuch case to reflect the true value thereof.

Any assets or liabilities in currencies other than the base currencies of the Sub-Funds will be converted using the relevant spot rate quoted by abank or other responsible financial institution.

If any of the aforesaid valuation principles do not reflect the valuation method commonly used in specific markets or if any such valuation principlesdo not seem accurate for the purpose of determining the value of the Companys assets, the Directors may fix different valuation principles in goodfaith and in accordance with generally accepted valuation principles and procedures.The Directors are authorised to apply other appropriate valuation principles for the assets of the Sub-Funds and/or the assets of a given class if theaforesaid valuation methods appear impossible or inappropriate due to extraordinary circumstances or events.

As of 29 December 2017, fair valuation was applied to the following securities:

Security Name Sub-Fund

Antares Energy Ltd. Schroder ISF Global EnergyAnxin-China Schroder ISF QEP Global Emerging MarketsAsian Citrus Holdings Ltd. Schroder ISF QEP Global Active ValueAsian Citrus Holdings Ltd. Schroder ISF QEP Global Emerging MarketsCaja de Ahorros del Mediterraneo Schroder ISF QEP Global CoreChina Animal Healthcare Schroder ISF QEP Global Emerging MarketsChina Lumena New Materials Schroder ISF QEP Global Active ValueChina Lumena New Materials Schroder ISF QEP Global AbsoluteChina Lumena New Materials Schroder ISF QEP Global QualityChina Lumena New Materials Schroder ISF QEP Global Value PlusChina Lumena New Materials Schroder ISF QEP Global Emerging MarketsChina Lumena New Materials Schroder ISF QEP Global BlendChina Lumena New Materials Schroder ISF Global Multi-Asset IncomeChina Taifeng Beddings Holdings Ltd. Schroder ISF QEP Global Active ValueChina Taifeng Beddings Holdings Ltd. Schroder ISF QEP Global Value PlusChina Taifeng Beddings Holdings Ltd. Schroder ISF QEP Global Emerging MarketsJurong Technologies Industrial Schroder ISF QEP Global Active ValueLongtop Financial Technologies ADR Schroder ISF Hong Kong EquityOW bunker Schroder ISF European Smaller CompaniesOW bunker Schroder ISF Global Smaller CompaniesPeace Mark Schroder ISF European ValueSafeway Schroder ISF Global RecoverySNS Bank Schroder ISF QEP Global Active ValueSNS Bank Schroder ISF QEP Global AbsoluteSNS Bank Schroder ISF QEP Global Value PlusSNS Bank Schroder ISF QEP Global BlendSole Realisation Co. plc Schroder ISF UK EquityVitzrocell Co. Ltd. Schroder ISF Korean EquityYa Hsin Industrial Schroder ISF QEP Global Active Value

Fair Value Pricing

In accordance with the provisions of the current prospectus, fair value pricing may be implemented to protect the interests of the Companysshareholders against market timing practices. Accordingly, if a Fund is primarily invested in markets that are closed for business at the time the Fundis valued, the Directors may, during periods of market volatility and by derogation from the provisions above under Calculation of Net Asset Valueper share, cause the Fund Administrator to allow for the Net Asset Value per share to be adjusted to reflect more accurately the fair value of theFunds investments at the point of valuation.

The level of adjustment is based upon the movement in a chosen surrogate up until the point of valuation, provided that such movement exceedsthe threshold as determined by the Directors for the relevant Fund. The surrogate will usually be in the form of a futures index but might also be abasket of securities, which the Directors believe is strongly correlated to and representative of the performance of the Fund.Where an adjustment is made as per the foregoing, it is applied consistently to all classes of shares in the same Fund.

During the year under review, fair value pricing was applied to 18 Sub-Funds. The Directors, however, reserve the right to extend theimplementation of fair value pricing in respect of other Sub-Funds whenever they deem it appropriate.

The Sub-Funds in relation to which fair value pricing was applied during the year under review as well as details of the relevant reference indices,thresholds and surrogates are shown in the following table:



Fair Value Pricing (cont)

Fund Threshold Surrogate

Schroder ISF Global Climate Change Equity 0.50% CME S&P 500 Index FuturesSchroder ISF Global Dividend Maximiser 0.50% CME S&P 500 Index FuturesSchroder ISF Global Equity 0.50% CME S&P 500 Index FuturesSchroder ISF Global Equity Alpha 0.50% CME S&P 500 Index FuturesSchroder ISF Global Equity Yield 0.50% CME S&P 500 Index FuturesSchroder ISF Global Smaller Companies 0.50% CME S&P 500 Index Futures

Schroder ISF Global Sustainable Growth * 0.50% CME S&P 500 Index FuturesSchroder ISF Japanese Equity 0.50% CME Yen Denominated Nikkei 225 Index Future

Schroder ISF Japanese Opportunities 0.50% CME Yen Denominated Nikkei 225 Index FutureSchroder ISF Japanese Smaller Companies 0.50% CME Yen Denominated Nikkei 225 Index FutureSchroder ISF QEP Global Active Value 0.50% CME S&P 500 Index FuturesSchroder ISF QEP Global Blend 0.50% CME S&P 500 Index FuturesSchroder ISF QEP Global Core 0.50% CME S&P 500 Index FuturesSchroder ISF QEP Global ESG 0.50% CME S&P 500 Index FuturesSchroder ISF QEP Global Quality 0.50% CME S&P 500 Index FuturesSchroder ISF US Large Cap 0.50% CME S&P 500 Index FuturesSchroder ISF US Small & Mid-Cap Equity 0.50% CME S&P 500 Index FuturesSchroder ISF US Smaller Companies 0.50% CME S&P 500 Index Futures

On 29 December 2017, the last working date of the year under review, no Fund was adjusted.

Exchange Rates

The exchange rates used for the calculation of the combined total in Euro of the financial Statement as at 29 December 2017 are:1 EUR = 1.198689971 USD;1 EUR = 0.886211729 GBP;1 EUR = 1.170484796 CHF;1 EUR = 134.924543126 JPY;1 EUR = 9.366503498 HKD;1 EUR = 7.810663850 CNH.

Swing Pricing Adjustment

A Fund may suffer dilution of the Net Asset Value per Share due to investors buying or selling Shares in a Fund at a price that does not reflect thedealing and other costs that arise when security trades are undertaken by the Investment Manager to accommodate cash inflows or outflows.In order to counter this impact, a Swing Pricing mechanism may be adopted to protect the interests of Shareholders of the Fund. If on any ValuationDate, the aggregate net transactions in Shares of a Fund exceed a pre-determined threshold, as determined and reviewed for each Fund on aquarterly basis by the Management Company, the Net Asset Value per Share may be adjusted upwards or downwards to reflect net inflows and netoutflows respectively.

The net inflows and net outflows is determined by the Management Company based on the latest available information at the time of calculation ofthe Net Asset Value per Share. The Swing Pricing mechanism may be applied across all Sub-Funds. The extent of the price adjustment will be setby the Management Company to reflect dealing and other costs. Such adjustment may vary from Fund to Fund and will not exceed 2% of theoriginal Net Asset Value per Share.

The swing pricing mechanism has been applied to the Companys Sub-Funds since 12 January 2009.

On 29 December 2017, the last working day of the year under review, swing pricing adjustment was applied to Schroder ISF Global Energy,Schroder ISF Global Equity Yield, Schroder ISF Latin American and Schroder ISF US Smaller Companies. The official Net Asset Values per share ofthese Sub-Funds following the application of the swing pricing adjustment are shown in the following table. All other financial information stated inthis report is shown before any adjustments for swing pricing.

SchroderISF

GlobalEnergy

SchroderISF

GlobalEquityYield

SchroderISF

LatinAmerican

SchroderISF

US SmallerCompanies

USD USD USD USD

Net Asset Value per Share (including swing pricing adjustment)as at 29 December 2017A Acc 16.4012 195.9221 38.5997 153.6918A Acc (CHF) 21.5876 - - -




Swing Pricing Adjustment (cont)

SchroderISF

GlobalEnergy

SchroderISF

GlobalEquityYield

SchroderISF

LatinAmerican

SchroderISF

US SmallerCompanies

USD USD USD USD

A Acc (EUR Hedged) 10.9265 - - -A Acc (EUR) 13.6940 163.3961 31.9982 -A Acc (SGD) - - 51.5718 -A Dis - 127.3075 30.6987 147.9699A Dis (EUR) 12.5491 - - -A Dis (GBP) 11.0013 105.0225 22.6800 -A Dis (HKD) - 969.4017 - -A1 Acc 15.5982 185.9411 36.2506 143.3932A1 Acc (EUR) 12.9390 155.2774 30.1470 -A1 Dis - 123.0017 - -B Acc 15.3116 181.8355 34.4868 132.7927B Acc (EUR) - 151.7788 28.7390 -B Dis - - 29.3158 127.8247C Acc 17.6705 212.9537 43.5058 176.9011C Acc (CHF) 21.8574 - - -C Acc (EUR) 14.8903 177.6483 36.3339 -C Dis 16.2085 136.3972 31.8920 170.2321C Dis (GBP) 12.0978 - - -I Acc 20.3834 248.0468 51.9888 214.5645I Acc (EUR) - 206.9445 - -S Dis (GBP) 12.3891 - - -Z Acc (EUR) 15.0472 179.4378 - -Z Dis (GBP) 12.3302 - - -

Taxation

The Company is not subject to any taxes in Luxembourg on income or capital gains. The only tax to which the Company in Luxembourg is subjectis the taxe dabonnement to a rate of 0.05% per annum based on the net asset value of each Fund at the end of the relevant quarter, calculatedand paid quarterly. In respect of any Share Class or Fund which comprises only institutional Investors (within the meaning of Article 174 of the Law),the tax levied will be at the rate of 0.01% per annum.

Changes in the Funds

A list specifying the total purchases and sales for each Fund, which took place during the year under review, may be obtained free of charge uponrequest at the Companys registered office.

Transactions made for a Purpose other than Hedging

In accordance with the provisions of the current prospectus, the Company may, for a purpose other than hedging, purchase and sell futurescontracts, options on any kind of financial instruments and equity swaps provided that the Company will only enter into equity swap transactionswith highly rated financial institutions specialised in this type of transactions.

Securities Lending

There has been no securities lending activity on the Companys Sub-Funds since December 2012.

Disclosure of Transaction Costs

The transaction costs are broker commission fees and taxes related to the purchase and sale of transferable securities. The transaction costs areshown net of the corresponding elements of the swing pricing factors that were applied when net flows in a Fund exceeded 1% on any businessday during the year under review. Custodian transaction costs are not included in this table, please refer to the Custodian Fees shown in theStatement of Operations. Bond Sub-Funds will generally show the figure of zero as the broker commission fees are included in the spread, which isexcluded from the calculation pursuant to Annex I, Schedule B, Chapter V of Directive 2009/65/EC of the European Parliament.



Disclosure of Transaction Costs (cont)

The transactions costs for the year under review are as follows:

Sub-Funds Currency Transaction costs

Schroder ISF Asian Opportunities USD 3,235,434Schroder ISF EURO Equity EUR 9,500,064Schroder ISF European Large Cap EUR 653,823Schroder ISF Global Equity USD 60,206Schroder ISF Italian Equity EUR 271,051Schroder ISF Japanese Equity JPY 61,476,395Schroder ISF Swiss Equity CHF 55,805Schroder ISF UK Equity GBP 212,262Schroder ISF US Large Cap USD 625,598Schroder ISF Asia Pacific Cities Real Estate USD 69,604Schroder ISF Asia Pacific ex-Japan Equity * USD -Schroder ISF Asian Dividend Maximiser USD 182,036Schroder ISF Asian Equity Yield USD 1,305,801Schroder ISF Asian Smaller Companies USD 519,382Schroder ISF Asian Total Return USD 2,345,288Schroder ISF BRIC (Brazil, Russia, India, China) USD 1,139,815Schroder ISF China A * USD -Schroder ISF China Opportunities USD 1,939,215Schroder ISF Emerging Asia USD 3,183,811Schroder ISF Emerging Europe EUR 942,901Schroder ISF Emerging Markets USD 3,201,008Schroder ISF Emerging Markets Equity Alpha * USD -Schroder ISF European Alpha Focus EUR -Schroder ISF European Dividend Maximiser EUR 745,838Schroder ISF European Equity (Ex UK) EUR 95,308Schroder ISF European Equity Yield EUR 54,049Schroder ISF European Opportunities EUR 796,121Schroder ISF European Smaller Companies EUR 184,440Schroder ISF European Special Situations EUR 700,229Schroder ISF European Total Return EUR 40,906Schroder ISF European Value EUR -Schroder ISF Frontier Markets Equity USD 2,044,759Schroder ISF Global Cities Real Estate USD -Schroder ISF Global Climate Change Equity USD 264,831Schroder ISF Global Dividend Maximiser USD 4,492,718Schroder ISF Global Emerging Market Opportunities USD 1,220,599Schroder ISF Global Emerging Markets Smaller Companies USD 83,904Schroder ISF Global Energy USD 775,904Schroder ISF Global Equity Yield USD 346,361Schroder ISF Global Gold USD 149,857Schroder ISF Global Recovery USD 207,636Schroder ISF Global Smaller Companies USD 314,762Schroder ISF Global Sustainable Growth * USD 89,974Schroder ISF Greater China USD 1,513,237Schroder ISF Hong Kong Equity HKD 12,077,416Schroder ISF Indian Equity USD 1,224,489Schroder ISF Indian Opportunities USD 376,117Schroder ISF Japanese Opportunities JPY 28,996,624Schroder ISF Japanese Smaller Companies JPY 4,983,299Schroder ISF Korean Equity USD 293,208Schroder ISF Latin American USD 250,355Schroder ISF Middle East USD 134,147Schroder ISF Swiss Equity Opportunities CHF 12,771Schroder ISF Swiss Small & Mid Cap Equity CHF 150,189Schroder ISF Taiwanese Equity USD 894,710Schroder ISF UK Opportunities GBP 222,450Schroder ISF US Small & Mid Cap Equity USD 945,053Schroder ISF US Smaller Companies USD 190,052Schroder ISF Global Equity Alpha USD 614,427Schroder ISF QEP Global Active Value USD 3,119,272Schroder ISF QEP Global Blend USD 498,639Schroder ISF QEP Global Core USD 1,924,597Schroder ISF QEP Global Emerging Markets USD 1,038,829Schroder ISF QEP Global ESG USD 186,259Schroder ISF QEP Global Quality USD 1,305,517Schroder ISF QEP Global Value Plus USD 79,369Schroder ISF Multi-Asset Strategies * USD 14,699




Disclosure of Transaction Costs (cont)

Sub-Funds Currency Transaction costs

Schroder ISF Emerging Multi-Asset Income * USD -Schroder ISF Global Diversified Growth EUR 39,112Schroder ISF Global Multi-Asset Balanced EUR 213,369Schroder ISF Global Multi-Asset Conservative EUR 2,838Schroder ISF Global Multi-Asset Flexible USD 158,657Schroder ISF Global Multi-Asset Income USD 3,330,346Schroder ISF Global Target Return USD -Schroder ISF Japan DGF JPY 1,717,404Schroder ISF Multi-Asset PIR Italia * EUR -Schroder ISF Multi-Asset Total Return USD 1,643Schroder ISF Strategic Beta * USD 522Schroder ISF Wealth Preservation EUR 16,887Schroder ISF Multi-Manager Diversity GBP 124Schroder ISF Asian Bond Absolute Return * USD 16Schroder ISF Emerging Markets Debt Absolute Return USD 4,563Schroder ISF EURO Credit Absolute Return EUR -Schroder ISF European Alpha Absolute Return EUR 639,250Schroder ISF European Equity Absolute Return EUR 461,402Schroder ISF QEP Global Absolute USD -Schroder ISF EURO Bond EUR 84Schroder ISF EURO Government Bond EUR 127Schroder ISF EURO Short Term Bond EUR -Schroder ISF Global Bond USD 65Schroder ISF Global Inflation Linked Bond EUR 56,764Schroder ISF Hong Kong Dollar Bond HKD 70Schroder ISF US Dollar Bond USD -Schroder ISF Asian Convertible Bond USD -Schroder ISF Asian Local Currency Bond USD 13Schroder ISF Emerging Market Bond USD -Schroder ISF Emerging Market Corporate Bond USD -Schroder ISF Emerging Market Local Currency Bond * USD -Schroder ISF EURO Corporate Bond EUR 1Schroder ISF EURO Credit Conviction EUR -Schroder ISF EURO High Yield EUR -Schroder ISF Global Conservative Convertible Bond USD -Schroder ISF Global Convertible Bond USD 15Schroder ISF Global Corporate Bond USD 160Schroder ISF Global Credit Duration Hedged EUR 8Schroder ISF Global Credit Income USD -Schroder ISF Global Credit Value * USD -Schroder ISF Global High Income Bond USD -Schroder ISF Global High Yield USD 7,168Schroder ISF Global Multi Credit USD -Schroder ISF Global Unconstrained Bond USD 10Schroder ISF RMB Fixed Income RMB -Schroder ISF Securitised Credit * USD -Schroder ISF Strategic Bond * USD 133Schroder ISF Strategic Credit GBP 1Schroder ISF EURO Liquidity EUR -Schroder ISF US Dollar Liquidity USD -

Investing in Russian securities

Those Sub-Funds with an investment objective that allows investment in Russian securities may invest directly in Russian securities that are tradedon the Moscow Exchange. Securities traded on the Russian Trading Stock Exchange can be treated as investments in securities dealt in on aRegulated Market.

Investment Restriction

To ensure eligibility for the French Plan dEpargne en Actions (PEA), Schroder ISF EURO Equity, Schroder ISF European Dividend Maximiser,Schroder ISF European Alpha Focus, Schroder ISF European Large Cap, Schroder ISF UK Equity and Schroder ISF UK Opportunities will invest atleast 75% of their assets in equity securities issued by companies which have their head office in the European Union, or in an EEA state that hassigned a tax agreement with France, including a clause on combating fraud and tax avoidance.




Information for Residents of the Hong Kong SAR

Registration of Sub-Funds

On 31 December 2017, all the Sub-Funds of the Company, except for those indicated in the table below were registered for sale in Hong KongSAR.In relation to the Sub-Funds that were registered in Hong Kong SAR, only A, A1, C and D shares were available for retail investors.

Sub-Funds not registered for sale in Hong Kong SARSchroder ISF Asia Pacific ex-Japan Equity *Schroder ISF Asian Convertible BondSchroder ISF China A *Schroder ISF Emerging Market BondSchroder ISF Emerging Market Corporate BondSchroder ISF Emerging Markets Equity Alpha *Schroder ISF EURO Credit Absolute ReturnSchroder ISF EURO Credit ConvictionSchroder ISF EURO High YieldSchroder ISF European Alpha Absolute ReturnSchroder ISF European Alpha FocusSchroder ISF European Equity (ex UK)Schroder ISF European Equity Absolute ReturnSchroder ISF European Equity YieldSchroder ISF European OpportunitiesSchroder ISF European Special SituationsSchroder ISF European Total ReturnSchroder ISF Global Conservative Convertible BondSchroder ISF Global Convertible BondSchroder ISF Global Credit IncomeSchroder ISF Global Credit Value *Schroder ISF Global Diversified GrowthSchroder ISF Global Emerging Markets Smaller CompaniesSchroder ISF Global High Income BondSchroder ISF Global Multi CreditSchroder ISF Global Multi-Asset BalancedSchroder ISF Global Multi-Asset ConservativeSchroder ISF Global Multi-Asset FlexibleSchroder ISF Global RecoverySchroder ISF Global Target ReturnSchroder ISF Global Unconstrained BondSchroder ISF Indian OpportunitiesSchroder ISF Italian EquitySchroder ISF Japan DGFSchroder ISF Multi-Asset PIR Italia *Schroder ISF Multi-Asset Strategies *Schroder ISF Multi-Asset Total ReturnSchroder ISF Multi-Manager DiversitySchroder ISF QEP Global AbsoluteSchroder ISF QEP Global BlendSchroder ISF QEP Global CoreSchroder ISF QEP Global Emerging MarketsSchroder ISF QEP Global ESGSchroder ISF QEP Global Value PlusSchroder ISF RMB Fixed IncomeSchroder ISF Securitised Credit *Schroder ISF Strategic Beta *Schroder ISF Strategic CreditSchroder ISF Swiss EquitySchroder ISF Swiss Equity OpportunitiesSchroder ISF Swiss Small & Mid Cap EquitySchroder ISF UK OpportunitiesSchroder ISF Wealth Preservation

Soft Commission Arrangements

Pursuant to the requirements of the Hong Kong Securities and Futures Commission regulations, the following statement is made:Soft commission arrangements have been undertaken in respect of the Company. Services which are paid for through or by soft commission werein majority limited to the following areas:a) research, analysis or price information including computer or other information facilities;




Information for Residents of the Hong Kong SAR (cont)

Soft Commission Arrangements (cont)b) portfolio valuations;c) performance measurement.

Transactions with Connected Persons

The Company has entered into agreements and arrangements with Schroder Investment Management Limited and its affiliates, under which amanagement fee, performance fee and a transfer agency fee are payable. These agreements and arrangements have been entered into in theordinary course of business and on normal commercial terms. The details of the management fees and performance fees are set out in the Notes tothe Financial Statements.In addition, the Management Company is entitled to receive the customary charges for its services as administration agent, coordinator, domiciliaryagent, global distributor, principal paying agent and registrar and transfer agent. These fees accrue daily at an annual rate of up to 0.4% byreference to the Net Asset Value of the relevant Fund and are paid monthly in arrears.Further details on fees payable by the Company can be found in the current prospectus. No transactions of the Company were effected through abroker who is a connected person of the Management Company, the Investment Adviser, or the Directors of the Company.

Expense Subsidy

The administration fees, custodian fees, distribution fees, management fees and statutory fees are calculated and accrued daily by reference to theNet Asset Value of the Sub-Funds and are paid monthly. These fees were monitored to ensure the total expenses incurred were not deemed to besignificant relative to the Net Asset Value of the Sub-Funds (above threshold agreed by the Board of Directors).The following table shows the share classes whose TER was above the designated CAP as at 31st December 2017.

Sub-Fund and class TER Cap

Schroder ISF Emerging Markets Equity Alpha A Acc 2.02%Schroder ISF Emerging Markets Equity Alpha C Acc 1.47%Schroder ISF Emerging Markets Equity Alpha I Acc 0.23%

Schroder ISF European Alpha Focus E Acc * 0.55%

Schroder ISF European Alpha Focus E Acc (GBP) * 0.55%Schroder ISF Multi-Asset Total Return A Acc 1.40%Schroder ISF Multi-Asset Total Return C Acc 0.75%Schroder ISF Multi-Asset Total Return A Acc EUR Hedged 1.40%Schroder ISF Multi-Asset Total Return C Acc EUR Hedged 0.75%Schroder ISF QEP Global Value Plus A Acc 2.14%Schroder ISF QEP Global Value Plus A Acc (EUR) 2.14%Schroder ISF QEP Global Value Plus A Dis 2.14%Schroder ISF QEP Global Value Plus C Acc (EUR) 1.09%Schroder ISF QEP Global Value Plus I Acc 0.11%Schroder ISF QEP Global Value Plus I Acc (AUD) 0.11%Schroder ISF QEP Global Value Plus I Acc (EUR) 0.11%Schroder ISF QEP Global Value Plus I Acc (GBP) 0.11%Schroder ISF Strategic Beta I Acc * 0.10%Schroder ISF Strategic Beta I Acc GBP Hedged * 0.10%

For Schroder ISF Asian Opportunities X Acc, X1 Acc share classes, Schroder ISF Asian Smaller Companies X Acc share class, Schroder ISF GlobalClimate Change Equity IZ Acc (GBP) share class, Schroder ISF QEP Global Value Plus C Acc, C Acc (GBP), C Dis (GBP) share classes, SchroderISF US Dollar Liquidity A Acc, A1 Acc, B Acc share classes, the actual TERs were lower than the TER cap.

Directors Fee

Daniel de Fernando Garcia and Marie-Jeanne Chevremont-Lorenzini each received in remuneration the amount of EUR 16,667 per annum.Bernard Herman received in remuneration the amount of EUR 16,968 per annum.Eric Bertrand received in remuneration the amount of EUR 2,785 per annum.The remaining directors have waived their remuneration.

Management Fees

The Investment Managers are entitled to receive management fees for their services, which are calculated and accrued daily by reference to the NetAsset Value of the Sub-funds and are paid monthly. No management fees are payable out of the net assets for I and J share classes, however the




Management Fees (cont)Investors are charged directly by Schroders. The actual rates payable as at 31 December 2017, which vary from Fund to Fund and from share classto share class are set out in the following tables. Please refer to the Directors report for changes to the management fees that occurred during theyear under review:

Sub-Fund *A

AccA1

AccB

AccC

AccCNAcc

DAcc

EAcc

FAcc

IAAcc

IBAcc

ICAcc

IZAcc

RAcc

SAcc

XAcc

X1Acc

YAcc

ZAcc

% % % % % % % % % % % % % % % % % %

Mainstream Equity FundsSchroder ISF Asian Opportunities 1.50 1.50 1.50 0.75 - - - - - - - - - 0.375 0.60 0.50 - -Schroder ISF EURO Equity 1.50 1.50