New Schroders ETF Targets Value and Quality Within Strict ESG Framework

Jan 27, 2026

Minute Read

Schroders has listed a new actively managed global equity ETF on the London Stock Exchange.

By ETFWorld.co.uk

Tom Stephens, Head of ETFs, Schroders

The Schroder Global Equity Custom Active UCITS ETF (Accumulation) aims to outperform a specific climate-focused benchmark by concentrating on undervalued and financially robust companies.

The fund, with the ISIN IE000GML9HQ4, comes with a Total Expense Ratio (TER) of 0.28%. Its primary objective is to deliver capital growth and income above the performance of the Solactive ISS ESG Screened Paris Aligned Global Markets (Net TR) Index over three-to-five-year periods, after fees.

The Benchmark: A Paris-Aligned Starting Point

The fund’s performance will be measured against a stringent index. The Solactive ISS ESG Screened Paris Aligned Global Markets Index is explicitly designed to align with the Paris Agreement’s global warming target. It selects companies based on norms like the UN Global Compact and excludes those with significant involvement in controversial weapons or certain business activities.

Active Strategy: Anchored in Value and Quality

Unlike passive ETFs that track an index, this fund is actively managed. Its core investment philosophy is built on two pillars:

Value: The managers will analyse cash flows, dividends, and earnings to identify securities they believe are undervalued by the market.
Quality: Assessment will focus on a company’s profitability, stability, financial strength, structural growth, and governance.

The fund will invest at least two-thirds of its assets in a global portfolio of equities and equity-related securities, including depositary receipts and REITs. Exposure to emerging markets is capped at 30% of net assets. For liquidity management, it may hold up to one-third of its assets in short-dated government bonds, money market funds, or cash.

The fund is also structured to qualify as an “Equity Fund” for German tax purposes, requiring a minimum 50% allocation to equity securities.

Tom Stephens, Head of ETFs, Schroders, said:

“We are moving at pace to grow our active ETF offering, with this latest launch showcasing our ability to develop a range of exchange-traded products to meet client demand. The Schroder Global Equity Custom Active UCITS ETF marries the operational advantages of an ETF wrapper with the bespoke requirements of our clients.”

Costs and Tax Considerations for Investors

The disclosed 0.28% TER covers the annual management charge and other fund operating costs. Investors should also be aware of portfolio transaction costs, which are incurred from buying and selling assets within the fund and are borne by investors.

For UK investors, Schroders typically structures its offshore funds to seek “Reporting Fund” status with HMRC. This is crucial because it allows gains on disposal to be taxed as capital gains rather than income, which is generally more advantageous.

Market Context and Strategic Fit

The launch occurs amid Schroders’ analysis that global markets are at all-time highs but are showing healthy signs of dispersion, where fundamentals are driving individual stock performance rather than broad sector moves. Their research notes that Europe and emerging markets delivered roughly double the US return in 2025 (in USD terms), leading investors to reassess passive exposure to US-centric indices.

Furthermore, Schroders’ equity strategists caution that while AI-driven growth has supported valuations, “there are signs of speculative behaviour in some areas”. They argue that passive approaches to value investing often retain significant exposure to large technology names, whereas a truly active approach is required to manage this concentration risk effectively.